Horizon - ESG Regulatory News and Trends

Welcome to Horizon, DLA Piper’s regular bulletin reporting on late-breaking legislative and policy developments in ESG. Our aim is to scan the litigation, enforcement, and regulatory horizon to help inform business decisions.

In this issue

Click each topic to jump to that section.

Disclosures
Voluntary reporting
Greenwashing
Climate Change: Regulatory
Climate Change: Litigation
Supply chain
Business and human rights
ESG investment
ESG calendar – key reporting deadlines, coming events

DISCLOSURES

Newsom signs SB 219, affirming the reporting date for annual climate-related disclosure requirements. California Governor Gavin Newsom has signed SB 219, which makes certain clarifications and amendments to SB 253, the landmark legislation imposing annual climate-related disclosure requirements on US public and private companies that do business in California and meet certain annual revenue thresholds. As some sources are noting, given the vastness of the California economy – it is the fifth largest in the world – most large businesses in the US may need to comply with SB 219. The California Air Resource Board has until July 1, 2025 (rather than January 1, 2025) to finish its rulemaking and adopt regulations for reporting entities’ annual disclosures of Scope 1-3 emissions.

Infringement procedures against EU member states over failure to transpose CSRD. The European Commission (EC) is opening infringement procedures against 17 EU member states for failing to meet the July 6 deadline to transpose the Corporate Sustainability Reporting Directive (CSRD) into their national laws. The EC wrote to the 17 countries – Belgium, Czechia, Germany, Estonia, Greece, Spain, Cyprus, Latvia, Luxembourg, Malta, the Netherlands, Austria, Poland, Portugal, Romania, Slovenia, and Finland – on September 30 to warn them about their noncompliance. The EC stated, “In the absence of transposition of these new rules, it will not be possible to achieve the necessary level of harmonisation of sustainability reporting in the EU and investors will not be in a position to take into account the sustainability performance of companies when making investment decisions.” The 17 member states now have two months from the date of the warning to respond. If they fail to comply, the EC could refer their cases to the Court of Justice of the European Union. On the same day, the Commission also opened infringement procedures against 26 member states for failing to implement provisions of the Renewable Energy Directive that would accelerate permitting procedures for renewable energy projects. Find out more about the CSRD here.

Canada to mandate climate disclosures for large companies and deliver a sustainable investment taxonomy. Canada will mandate climate-related financial disclosures for large, federally incorporated private companies, the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, announced on October 9. Freeland simultaneously announced the government’s plan to deliver “Made in Canada” sustainable investment guidelines – a taxonomy identifying green and transition investments that will set out robust, transparent, voluntary guidelines for investors. A key principle of the developing taxonomy, the government said, is that it be compatible with other major science-based taxonomies and frameworks globally. The climate-related financial disclosures will be mandated through amendments to the Canada Business Corporations Act. The substance of these disclosure requirements and the size of federal corporations subject to them has yet to be determined. These disclosures are intended to the government stated, “will help investors better understand how large businesses are thinking about and managing risks related to climate change, ensuring that capital allocation aligns with the realities of a net-zero economy.” The government is also hoping to encourage smaller businesses to release climate disclosures on a voluntary basis. The coming disclosure mandate and the sustainable taxonomy were announced October 9 during the Principles for Responsible Investment conference in Toronto. Find out more about these disclosures by contacting Amy Pressman or Stephanie Wright.

Mexico adding sustainability information to reporting standards. Starting in 2025, all companies that prepare financial statements under Mexican Financial Reporting Standards (Mexican GAAP) must include sustainability information in their financial statement notes. In May this year, the Mexican Council of Financial Reporting and Sustainability Standards published the first two Sustainability Reporting Standards (NIS, for its acronym in Spanish). These standards guide companies in measuring their environmental and social impacts. NIS A-1 outlines the Conceptual Framework, while NIS B-1 sets forth Basic Sustainability Indicators (BSI). There are 30 BSI in total: 21 quantitative (16 environmental, four social, one governance) and nine qualitative (two on human capital, seven on governance). The NIS does not apply to legal entities that use US GAAP or IFRS rather than Mexican GAAP – which is permitted under Mexican tax laws. Instead, such entities would need to comply with relevant sustainability standards associated with those frameworks, such as IFRS S1 and IFRS S2. Find out more about the new requirements by contacting Jorge Benejam, Mariana de Maria y Campos, and Aldo Ramírez.

Singapore pushes back Scope 3 reporting deadline for smaller issuers. SGX RegCo, the regulator of the Singapore Exchange, is easing Scope 3 emissions reporting requirements for smaller listed companies. In April, Singapore’s government announced mandatory climate-related reporting requirements for SGX-listed and large non-listed companies starting with FY2025 and aligned with the standards issued by the IFRS Foundation’s International Sustainability Standards Board. Now, SGX RegCo says, its public consultation has found that, while there is broad support among all issuers for mandatory reporting, small issuers are concerned about “the evolving measurement and reporting methodologies for Scope 3 GHG emissions,” which are not final yet, and about their ability to be ready in time. SGX RegCo said it will “review issuers’ experience and readiness before establishing the implementation roadmap for reporting Scope 3 GHG emissions.” Large issuers will be prioritized, it stated, with the expectation that they will begin Scope 3 reporting in 2026.

Hong Kong moves closer to full adoption of global sustainability reporting standards. Advancing Hong Kong’s full adoption of the IFRS Global Sustainability Reporting Standards, the Hong Kong Institute of Certified Public Accountants (HKICPA) announced on September 25 that it has proposed to fully converge its new standards, HKFRS S1 and HKFRS S2, with the International Financial Reporting Standards Foundation’s IFRS S1 and IFRS S2. The Hong Kong Stock Exchange has already adopted similar standards that cover its listed issuers; the new HKICPA standards, notably, would go beyond this, applying to all companies subject to Hong Kong regulatory jurisdiction, including those not listed on the HKEX. The government of Hong Kong, like that of Australia, is aiming for full alignment with the ISSB standards, which will become effective in August 2025.

VOLUNTARY REPORTING FRAMEWORKS

European Auditing Oversight Bodies issue non-binding guideline on CSRD’s Limited Assurance standard. In accordance with the EU’s Corporate Sustainability Reporting Directive, the Committee of European Auditing Oversight Bodies (CEAOB) has published non-binding guidelines on limited assurance on sustainability reporting. The objective of the guidelines, CEAOB says, is to help those preparing a sustainability report to provide information that is “free from material misstatement(s).” The CEAOB emphasizes that the guidelines are temporary and voluntary, do not override existing national rules, and “do not constitute a standard” – the Committee decided to issue them as a stopgap measure until the European Commission adopts a final assurance standard. See our alert to find out more about the CSRD.

Hong Kong: Voluntary code of conduct for ESG raters, data providers. Hong Kong has officially adopted a voluntary code of conduct for ESG raters and data providers. The Hong Kong Code of Conduct for ESG Ratings and Data Products Providers, published on October 22, sets out a principle-based approach that “aims to foster a trusted, efficient and transparent market,” introducing clear standards and clarifying how providers can interact with wider market participants. Hong Kong’s Securities and Futures Commission worked with the International Capital Markets Association (ICMA) to develop the code. Similar voluntary codes in some other jurisdictions, notably, have at times failed to satisfy regulators. In the UK, for instance, a voluntary code is being superseded by mandatory rules.

IFRS publishes guide to using its climate reporting standards. The IFRS Foundation has announced the publication of Voluntarily applying ISSB Standards—A guide for preparers, developed to help companies voluntarily apply the International Sustainability Standards Board’s climate and sustainability-related disclosure standards and report to investors on their advances. Globally, more than 20 jurisdictions – representing more than 55 percent of global GDP, more than 40 percent of global market capitalization, and more than half of global GHG emissions – have decided to use the ISSB standards or are working to introduce the standards into their own reporting frameworks. A recent feature article in Forbes states that “the IFRS standards are rapidly becoming the de facto obligations for corporate sustainability reporting, with respect to climate disclosures” and goes to note that the greatest impact of the IFRS Foundation’s work is its “practical, applicable guidelines that are rooted in financial reporting.”

GREENWASHING

Investment management firm to pay $4M to settle SEC greenwashing charges. On October 21, the SEC announced that investment advisory firm WisdomTree Asset Management Inc. has agreed to pay $4 million to settle charges that it misleadingly marketed three exchange-traded funds as having an ESG investment strategy. Those funds, WisdomTree said in prospectuses, would not invest in companies that did business involving such products as fossil fuels and tobacco. But in fact, the SEC stated, the funds did invest in such companies, including those involved in coal mining, natural gas extraction, and retail tobacco sales, nor did WisdomTree have any procedures or policies that could exclude such companies. The SEC’s order found that the firm violated the antifraud provisions of the Investment Advisers Act of 1940 and the Investment Company Act of 1940 and the compliance rule in the Investment Advisers Act. WisdomTree consented to the order without admitting or denying the SEC’s findings. The action against the company is being seen as the latest sign that, while the SEC has disbanded its Climate Task Force, it will continue to pursue greenwashing offenders. As the agency put it, “The expertise developed by the task force now resides across the Division.” Find out more about this development by contacting Era Anagnosti.

Greenwashing on the decline, report finds. As regulatory and stakeholder scrutiny has ramped up, the number of companies linked to greenwashing allegations has declined, according to an October report by ESG data science company RepRisk. Overall, the number of companies associated with greenwashing risk in the year ending June 2024, RepRisk found, declined by 12 percent, indicating a significant shift in corporate behavior. This is the first such decline noted in six years. The banking and financial services sector, the report also found, is undergoing a similar shift: while the 2023 RepRisk report saw a 70 percent increase in greenwashing risk in the sector, the 2024 report found a reversal, with a 20 percent decrease globally across the sector. However, the report continued, overall the number of more severe incidents actually rose – RepRisk found a 30 percent increase in “high-severity cases,” a determination based on an incident’s consequences and the degree to which it is systematic and intentional. Interestingly, it also found a slight rise, 6 percent, in greenwashing cases in the US, which the report ascribes to the growing politicization, in the US, of ESG issues.

Italy investigating Shein website provider on greenwashing claims. Italy's Autorità Garante della Concorrenza e del Mercato (AGCM), the country's competition and market regulator, is investigating Infinite Styles Services Co. Limited, a Dublin-based company that operates the web platform and app for the fast-fashion retailer Shein, over environmental claims on Shein's website. The AGCM charges that statements on Shein's website "convey an image of production and commercial sustainability of its garments through generic, vague, confusing and/or misleading environmental claims." The AGCM pointed to Shein’s descriptions of its evoluSHEIN by Design collection, which the website says is “purposefully designed, with responsibly sourced & rescued materials,” stating that descriptions of the products as “sustainable” could mislead consumers about the volume of “green” materials used in manufacturing; nor does the site inform consumers that evoluSHEIN garments are not recyclable. Further, the AGCM said, Shein’s website appears to emphasize a commitment to decarbonization, which, the regulator notes, seems to be contradicted by Shein’s sustainability reports for 2022 and 2023. Shein has self-reported that its absolute emissions grew from 9.17 million metric tons of CO2 equivalent in 2022 to 16.68 million metric tons in 2023.

CLIMATE CHANGE: REGULATORY

New environmental laws in California. In addition to signing SB 219 amending SB 253, the landmark legislation requiring businesses to provide climate-related disclosures, California Governor Gavin Newsom has signed a number of environmental bills into law. Among them are:

• SB 707, the Responsible Textile Recovery Act of 2024, requiring manufacturers and distributors to participate in an extended producer responsibility program for recycling apparel and certain textile products. See our alert.
• AB 347, adding comprehensive registration, certification, and enforcement provisions to California’s existing and forthcoming restrictions on the use of PFAS in covered products: juvenile products, textile articles, and food packaging. Find out more about this law in our alert, and see our PFAS and Emerging Contaminants page.
• AB 660, standardizing food package date labeling with the goal of reducing food waste. Food labels will say either “best if used by” to indicate peak product freshness or “use by” to indicate when a food product is no longer safe to eat. In addition, retailers may no longer use “sell by” stickers; these labels, which can confuse shoppers, are used by retail outlets to show when stock needs to be rotated.

Newsom, however, vetoed another environmental measure, AB 2513, which would have required that natural gas stoves sold to Californians bear health warning labels. In his veto message, Newsom said, “I am concerned that this bill codifies highly prescriptive labeling content that could only be changed by a future statutory amendment.”

Federal law will exempt semiconductor facilities from environmental reviews. On October 2, 2024, President Joe Biden signed into law the Building Chips in America Act, legislation that will exempt semiconductor manufacturing facilities that receive funding under the CHIPS and Science Act from federal environmental review. The measure is not without controversy. Proponents of the legislation hope that it will streamline the construction process and speed the development of the US semiconductor industry. Opponents, however, expressed concerns about environmental impacts.

EPA announces final rule on managing and recycling HFCs. In late September 2024, the EPA announced that it has finalized a rule to promote better management, recycling, and reuse of hydrofluorocarbons (HFCs) under the American Innovation and Manufacturing (AIM) Act. The rule, which is part of the AIM Act’s goal of drastically cutting climate-warming emissions, creates a new reclamation program for HFCs while imposing new requirements to reduce HFC emissions. Separately, the agency also issued an advanced notice of proposed rulemaking requesting input on the technical training or certifications that should be required of refrigeration and cooling equipment installers, technicians, and servicers.

US Customs and airlines embrace new recycling strategy. International airlines, with a boost from a new policy of US Customs and Border Protection (CBP), are now participating in a new program enabling them to recycle single-use aluminum, paper, and plastic products used during international flights arriving in the US. This, according to CBP, aligns with CBP's Green Trade Strategy, which governs the agency's efforts to advance environmental sustainability, climate resilience, and green innovation. The new program will allow international airlines to recycle these materials once appropriate safeguarding measures have been implemented, thus protecting American agriculture against foreign pests and pathogens while promoting the sustainability of the airline industry. With more than 120 million international passengers arriving in the United States annually, it is estimated that incoming passengers will generate over 67 million pounds of recyclables on international flights.

Washington state: Next tranche of Safer Products Program regulations for reducing PFAS in consumer products. The Washington State Department of Ecology has shared a preliminary draft rule that would impose comprehensive restrictions and reporting requirements on manufacturers of 12 consumer product categories containing perfluoroalkyl and polyfluoroalkyl substances, also known as PFAS. The draft rule aims to impose statewide reporting requirements for products such as footwear and travel gear, while imposing stronger restrictions on other products such as certain apparel categories and cleaning products. Our alert tells you more.

ESG on the ballot in Washington state. Washington state voters will respond to several ballot initiatives concerning environmental matters. Garnering the most attention is an initiative asking whether voters wish to repeal the state’s landmark 2021 climate law, the Climate Commitment Act. That law, and its cap-and-invest program, require businesses that emit at least 25,000 metric tons of CO2, or the equivalent in other GHGs including methane, to pay for the right to do so by buying allowances. The number of available allowances falls every year, in theory prompting companies to find ways to cut emissions. Opponents of the Act says it has raised energy costs in the state; proponents say repeal would not lower energy costs and would result in the loss of billions of dollars in state revenue.

Competition law and sustainability: Navigating global uncertainty. Central banks, insurers, investment funds, and industrial companies are significantly changing their business models to account for climate change and its economic consequences. Collaboration through trade associations and joint industry initiatives may promote sustainability and accelerate decarbonization, but it may also violate antitrust rules. DLA Piper’s October 2, 2024 webinar, “Competition law and sustainability: Navigating global uncertainty,” explored these issues and discussed practical strategies for managing the risks. Find the webinar materials here.

CLIMATE CHANGE: LITIGATION

Supreme Court lets three EPA air-quality standards remain, for now. The Supreme Court has declined to hear emergency applications seeking to block three Biden Administration environmental regulations – one addressing methane emissions from oil and gas drilling; another addressing mercury emissions from coal-fired power plants; and a third addressing GHG emissions from power plants burning fossil fuels. Petitions for the first two were rejected on October 4 without comment and with no noted dissents. The denial order for the third was issued October 16 with a statement suggesting a few justices may think the regulation should be struck down. Industry groups and attorneys general from Republican-led states have been seeking to overturn the three rules, arguing that the EPA has overstepped its authority and has set standards for industry that are costly and unattainable. The EPA holds that the rules fall squarely within its regulatory ambit, that the standards are attainable, and that the benefits to human health and the environment outweigh compliance costs.

• The mercury rule updates regulations governing emissions of mercury and other substances, aiming to reduce such emissions from coal-fired power plants by up to 70 percent by 2038. The vast majority of such plants already are capable of meeting the standards in the rule, the EPA says, adding that it mostly affects a small group of plants which emit a disproportionate share of pollution.
• The methane rule, finalized in March this year, addresses emissions from existing oil and gas wells across the country, including smaller wells. The latter account for 6 percent of US oil and gas production but release as much as half of well site emissions.
• The power plant rule requires coal-fired power plants that operate past 2039, as well as new natural gas-fired power plants, to cut their CO2 emissions by 90 percent.

Notably, the failure of these emergency applications does not end the lawsuits – cases involving each of the rules are still moving through a federal appeals court.

Fraud in the voluntary carbon-credit market: SDNY brings charges against 2 executives. Early this month, the US Attorney for the Southern District of New York announced charges against two former executives of carbon-credit project developer CQC Impact Investors – Kenneth Newcombe, former CEO and majority shareholder of CQC, and the former head of the company’s carbon and sustainability accounting team, Tridip Goswami – who are charged with falsifying data to fraudulently obtain carbon credits for a CQC project. The charges arise from CQC’s Clean Cookstove Project, which provides small, energy-efficient cookstoves to households in parts of the world that traditionally use carbon-emitting three-stone fires. CQC then converts the avoided emissions into carbon credits, which it sells to those looking to offset their emissions. CQC says it deploys thousands of clean cookstoves in Africa and Southeast Asia every day. When the project encountered obstacles, prosecutors said, Newcombe and Goswami started fabricating data “to make it appear as if certain of the Cookstove Projects were far more successful in reducing carbon emissions than was actually the case.” They were able to issue millions more carbon offset credits than CQC was entitled to receive. The US Attorney says they also used that fraudulent data to deceive an investor, who put more than $100 million into the firm. The SEC found that CQC violated federal securities laws which prohibit fraudulent conduct in the offer or sale of securities, when the company offered its equity to institutional investors by falsely representing material information about its carbon credit business, including erroneous historical results and unfounded financial projections, which fraudulent offering culminated in the sale of $250 million of CQC’s equity. The SEC did not impose a fine, noting the company’s cooperation with the investigation and its remedial efforts, including hiring a new leadership team and putting in place internal compliance processes and policies that, the company has said, will “ensure its future activities meet the highest ethical standards.” The Commodity Futures Trading Commission filed a civil action against the firm and its executives. The company has settled with the CFTC, paying a $1 million fine – interestingly, this was the CFTC’s first-ever enforcement action involving fraud in the voluntary carbon-credit market. Find out more about this development by contacting Era Anagnosti.

Texas seeks to dismiss challenge to its anti-ESG law. Two Texas officials are asking the District Court for the Western District of Texas to dismiss a lawsuit challenging the constitutionality of SB 13, a 2021 law that requires the state to divest any investments from financial firms that are allegedly boycotting fossil fuels. The suit, brought by the American Sustainable Business Council in August, says SB 13 has harmed its corporate and individual members, who represent more than 200,000 Texas businesses, and “should be declared unconstitutional and unenforceable because it impermissibly infringes rights of free speech and association” in violation of the First and Fourteenth Amendments. In calling on the court to dismiss the case, Texas Comptroller Glenn Hegar and Attorney General Ken Paxton said sovereign immunity bars the claims made against them and that the Council lacks standing to bring the case; Hagar also called the case “frivolous.” To date, Texas has blacklisted 19 financial firms under SB 13 for purposes of contracts and divestment. The case is American Sustainable Business Council v. Hegar et al.

Missouri drops appeal over its anti-ESG law. In August, the US District Court for the Western District of Missouri struck down a Missouri law which required clients of financial firms to provide written consent before the firm could invest the client’s money in funds that considered ESG factors. The court found that the state law constituted “compelled speech” and was “unconstitutionally vague” in violation of the First Amendment. At the time, Missouri Secretary of State Jay Ashcroft vowed to take the case to the Eighth Circuit Court of Appeals. Early this month, however, Missouri decided to abandon that appeal. The state will pay $500,000 in legal fees to the Securities Industry and Financial Markets Association, which had challenged the law. Observers are noting that while this outcome puts an end to the particular Missouri law, it serves a larger political purpose: the Eighth Circuit will not have the opportunity to opine on the legality of such rules, keeping alive the movement to encode anti-ESG measures in state laws.

Report says New York City could charge oil companies with reckless endangerment. A report by the consumer advocacy group Public Citizen and the criminal justice reform group Fair and Just Prosecution argues that New York City could bring criminal charges of reckless endangerment against major fossil fuel companies and their executives for knowingly contributing to the climate crisis – and in recent days, a few New York state and city officials have agreed. The 50-page report first discusses the elements of the crimes of reckless endangerment in the second and first degrees and describes possible classes of defendants, then goes on to lay out the prosecution’s case and consider possible legal questions that could arise during trial. Among the New York political figures who agree with the report is New York State Assembly Member Emily Gallagher, who stated, “These companies are endangering my constituents, and I believe New York prosecutors should act accordingly." Public Citizen’s climate counsel, Clara Vondrich, commented that while the report builds an argument for bringing such litigation in New York, its approach could be relevant for many jurisdictions that have reckless endangerment statutes on the books. See the executive summary of the report here.

SUPPLY CHAIN

EC approves delaying compliance with Deforestation Regulation – European Parliament yet to approve. The Council of the European Union(EC) announced on October 16 that it has approved postponement of due diligence requirements under the Regulation on Deforestation-Free Products (EUDR) by one year. For the delay to become effective, the European Parliament also needs to approve, which at this writing has not taken place. Compliance with the Regulation is slated to begin December 30, 2024. Under the change, large companies would have until December 30, 2025 to comply; SMEs would have until June 30, 2026. Governments and companies around the world had pushed for such a delay, arguing that the regulation would penalize their exports and harm small businesses and farmers. The EC’s statement in early October that it was considering this delay was met with sharp criticism from environmental leaders and civil society groups worldwide, who all pointed to the urgent need to curb deforestation. Early this month, the EC published additional guidance for producers, trading organizations, and partner countries to help them prepare to implement the EUDR. Deforestation is second only to fossil fuels as a source of carbon emissions. Also see our alert, European Union Deforestation Regulation: What US companies should know.

BUSINESS AND HUMAN RIGHTS

Scope of UFLPA entity list expands with addition of steelmaker, aspartame manufacturer. Two more Chinese companies have been added to the Uyghur Forced Labor Prevention Act (UFLPA) entity list over allegations of human rights abuses in China's Xinjiang region. The companies are state-owned Baowu Group Xinjiang Bayi Iron and Steel, the first steelmaker to be added to the entity list, and Changzhou Guanghui Food Ingredients, the first aspartame manufacturer to make the list. The UFLPA, enacted in 2021 and coming into effect in 2022, creates a rebuttable presumption that goods manufactured wholly or in part in the Xinjiang Region of China, or by certain designated entities, were made with forced labor and are therefore prohibited from entering the US. Since the UFLPA went into effect, CBP has inspected 9,791 shipments, valued at $3.56 billion, for UFLPA violations, and has denied entry to 3,976. Find out about DLA Piper’s extensive experience helping companies with UFLPA compliance and investigations by contacting Christine Daya or Nicholas Klein.

Draft of new EU forced labor regulation is published. The first draft of the English version of the new EU regulation banning products made with forced labor has been published. While some final linguistic revisions are being made to the text, and the European Council is yet to approve, the regulation’s most significant aspects are now clear. Its baseline: a ban on “(i) products made with forced labour from the EU market, and (ii) the export from the EU market of any product made using forced labour.” Among other requirements, it will direct the European Commission to “create a public database with information on forced-labour risks in different regions and industries.” Goods originating in designated “high-risk” areas, the European parliament has stated, will face additional scrutiny. Of note, the regulation will place the burden of proof not on businesses but on national enforcers and the European Commission. Observers are noting that the forced labor regulation, in concert with the Corporate Sustainability Due Diligence Directive, the EU Deforestation Regulation, and the two interrelated directives addressing greenwashing, will add to the bloc’s set of powerful, synergistic tools to address environmental issues not just in supply chains but in business practices. The forced labor regulation will go into effect three years after it is adopted – that is, the earliest it could enter into force is late 2027.

ESG INVESTMENT

CFTC approves final guidance on voluntary carbon credit derivative contracts. Citing its “unique mission” at the “global nexus between financial markets and decarbonization efforts,” the Commodities Future Trading Commission (CFTC) has approved final guidance on the listing for trading of voluntary carbon credit (VCC) derivative contracts by CFTC-listed designated contract markets (DCMs). While the guidance is nonbinding, the CFTC intends it to help standardize VCC derivative contracts generally while promoting transparency and trust in the VCC market. The guidance outlines factors for DCMs to consider regarding certain provisions of the Commodity Exchange Act as well as certain requirements under the CFTC’s Part 40 Regulations relating to the submission of new derivative contracts. Find out more by contacting Andrew Westgate.

Financial futures: Disruption in global financial services – a DLA Piper report. Social, technological, regulatory, and environmental considerations now dominate the agendas of financial institutions, which are having to engage with a multitude of issues, among them how to harness the huge opportunities provided by sustainable finance while managing the threats of greenwashing and environmental litigation, which have reached the top of risk dashboards. DLA Piper has commissioned a global survey of approximately 800 major decision-makers in financial services organizations across EMEA, APAC, and North America to explore the impact these changes are having on the sector. Read our report, Financial futures: Disruption in global financial services, here.

Navigating clean energy tax credits in climate tech venture lending. Changes to the tax code have made it easier to monetize renewable energy tax credits, attracting interest from emerging growth companies looking to bolster their balance sheets amid the slowdown in venture capital funding. Our alert explores the intersection of innovative tax credit transactions and the venture lending market, highlighting key issues for venture lenders to consider.

ESG CALENDAR – KEY REPORTING DEADLINES, COMING EVENTS

Deadlines

• US: California Transparency in Supply Chains Act – annually based on the company’s internal annual publication deadline
• Canada: Bill S-211, Fighting Against Forced Labor and Child Labor in Supply Chains Act – annually on May 31
• Mexico: Mexican Sustainability Reporting Standards (NIS A-1 and B-1). The standards will substantively apply from January 1, 2025, onwards.
• EU: Taxonomy Regulation
  • NFRD obliged companies – financial years starting on or from January 1, 2024 (with reports due in 2025/2026)
  • Large undertakings and parents of large groups – financial years starting on or from January 1, 2025 (with reports due in 2026)
• EU: Corporate Sustainability Reporting Directive (CSRD)
  • Large EU Public Interest entities (NFRD obliged) – January 1, 2024 (with reports due in 2025) and then annually
  • Large EU undertakings and parents of large EU groups – January 1, 2025 (with reports due in 2026) and then annually
  • Small and medium-sized enterprises (SMEs) – January 1, 2026 (with reports due in 2027) and then annually
  • Non-EU parent companies – January 1, 2028 (with reports due in 2029) and then annually
  • 2029 for all other companies that fall within the scope of the CSRD.
• EU: Deforestation Regulation – the regulations will substantively apply from December 30, 2024 onwards. On October 16, 2024, the European Council of the European Union agreed to postpone the regulations application by 12 months, and if the European Parliament agrees, these regulations will apply:
  • Large EU operators and traders – December 30, 2024
  • Micro and small enterprises – June 30, 2026
• EU: Corporate Sustainability Due Diligence Directive (CSDDD)
  • 2027 for companies with 5,000+ employees and €1.5 billion
  • 2028 for companies with 3,000+ employees and €900 million net turnover and
  • 2029 for all other companies that fall within the scope of the CSDDD.
• UK: Modern Slavery Act, Transparency in Supply Chains Act – annually. Companies should publish their statement as soon as possible after their financial year end, which is expected to be, at most, within six months of the organization’s financial year end. Companies may wish to publish these statements at the same time as they publish other annual accounts.
• Germany: Act on Corporate Due Diligence Obligations in Supply Chains
  • Phase 1 – June 1, 2024
  • Phase 2 – annually on January 1, 2025
• Switzerland: Due Diligence and Transparency in Relation to Minerals and Metals from Conflict-Affected Areas and Child Labor – annually on June 30
• Norway: Transparency Act – annually on June 30
• Australia: Modern Slavery Act
  • If the business reporting date is based on calendar year (ie, January 1 to December 31), then the reporting deadline is annually on June 30
  • If the business reporting date is based on Australian financial year (ie, July 1 to June 30), then the reporting deadline is annually on December 31
  • If the business reporting date is based on Foreign Financial Year – including United Kingdom and Japan (ie, April 1 to March 31) – then the reporting deadline is annually on September 30
• Australia: Climate-Related Financial Disclosures
  • Group 1: January 1, 2025 is start date for first year’s report, due January 1, 2026
  • Group 2: July 1, 2026 is start date for first year’s report, due July 1, 2027
  • Group 3: July 1, 2027 is start date for first year’s report, due July 1, 2028
  • Singapore: both SGRX-listed and large non-listed companies must file annual climate-related disclosures, starting with FY 2025. Requirements for smaller issuers are being revised.

Coming events

• Register here for Making Sustainability Sustainable: laying the foundations for future success, taking place in London on November 26, a full-day DLA Piper seminar exploring sustainable practices and strategies for the Consumer Goods, Food, and Retail sector.
• The United Nations Biodiversity Conference (COP16) is taking place through November 1, 2024 in Cali, Colombia.
• The 2024 United Nations Climate Change Conference (COP 29) will be held November 11 – 22, 2024 in Baku, Azerbaijan.
• 16th session of the UN Convention to Combat Desertification takes places December 2 – 13, 2024 in Riyadh, Saudi Arabia.
• The 13th United Nations Forum on Business and Human Rights will be held November 25 – 27, 2024, both hybrid and in-person in Geneva, Switzerland.
• The 2025 UN Ocean Conference will be held June 9 – 13, 2025 in Nice, France.
• The 2025 United Nations Climate Change Conference (COP30) will be held November 10 – 21, 2025 in Belém, Brazil.