2 Sep, 2021

Sustainable Finance Regulatory Update: August 2021


As policymakers, regulators and market players return from their summer vacations, we are poised for an uptake in sustainability-related activity and policy developments this autumn. In the run up to NYC Climate Week taking place on 20-26 September, together with COP26 in Glasgow this November, here is an overview of the main ESG reporting updates over the past month. 

The Platform on Sustainable Finance published preliminary draft TSC for remaining 4 environmental objectives for the EU Taxonomy 

The draft report focused primarily on presenting a first set of priority economic activities and draft recommendations for associated substantial contribution and do no significant harm (DNSH) technical screening criteria in relation to the 4 non-climate environmental objectives covering water, circular economy, pollution prevention, and biodiversity & ecosystems. However, a small number of economic activities and corresponding draft recommendations for technical screening criteria related to the climate mitigation and adaptation objectives have also been included. Read more 

Call for feedback: The Platform will welcome stakeholder feedback through the present call for feedback, which runs from 3 August to 24 September 2021Respond to the call for feedback 

IPCC report: ‘Code red’ for human driven global heating, warns UN chief

On 9th Aug, Intergovernmental Panel on Climate Change (IPCC) published its sixth assessment report which highlights how human influence has warmed the climate at a rate that is unprecedented in at least the last 2,000 years. 

United Kingdom: FCA issues guiding principles for funds on compliance with ESG obligations 

The FCA has written a letter to the chairs of authorised fund managers on improving the quality and clarity of authorised ESG funds, setting out guiding principles on compliance with ESG obligations. Read more

Nasdaq receives SEC approval for board diversity disclosure proposal 

On 6th Aug, The US Securities and Exchange Commission (SEC) approved two diversity plans filed by Nasdaq, the Board Diversity Proposal and Board Recruiting Service Proposal, as originally filed in December and amended in February. 

The rule requires Nasdaq-listed companies to have, or explain why they do not have, at least two diverse directors, including (1) at least one director who self-identifies as female (regardless of gender designation at birth) and (2) at least one director who self-identifies as either an “Underrepresented Minority,” as defined in the Nasdaq rule, or as LGBTQ+. Read more 

SEC enhances access to financial disclosure data 

On 19th Aug, Securities and Exchange Commission (SEC) announced open data enhancements that provide public access to financial statements and other disclosures made by publicly traded companies on its Electronic Data Gathering, Analysis, and Retrieval system (EDGAR). 

With this move, SEC is releasing for the first time Application Programming Interfaces (APIs) that aggregate financial statement data, making corporate disclosures quicker and easier for developers and third-party services to use. APIs will allow developers to create web or mobile apps that directly serve retail investors. 

On 23rd Aug, CDSB Issued a new reporting guidance for water-related disclosures 

Titled “The CDSB Framework Application guidance for water-related disclosures” it has been produced to assist companies in the disclosure of water-related financial information in the mainstream report and supplement the CDSB Framework for reporting environmental and climate change information. 

Other News 

  • Australian Senate passes bill banning imports made using forced labour. Read more 
  • France officially promulgated and published the Climate and Resilience Law. Read more  
  • Hong Kong’s Securities and Future Commission issued Consultation conclusions on the Management and Disclosure of Climate – related risks by fund managers that will amend the Fund Manager Code of Conduct (FMCC). Read more 
  • Switzerland’s Federal Council decided on several key parameters advancing in its plan of mandating climate-related disclosures for public companies.  Read more 
  • Singapore Exchange Regulation seeking feedback on mandatory climate-related disclosures, ESG, and board diversity policies for listed companies. Read more 
  • Pan-Canadian Framework on Clean Growth and Climate Change: The Greenhouse Gas Pollution Pricing Act (GGPPA) establishes a carbon pollution pricing system — a regulatory trading system known as the Output-Based Pricing System (OBPS). Read more
  • OECD published recommendations for policy makers on “AI regulation in financial services”: The report can help policy makers identify opportunities and risks arising out of the use of these new technologies and inform policy makers regarding their implications.