Key highlights from March 2022 in the sustainability space.
EU Strategy for Sustainable and Circular Textiles. The European Commission shared its EU Strategy for Sustainable and Circular Textiles. Acknowledging that the consumption of textiles in the UE accounts for the 4th highest negative impact on the environment and on climate change, the EU Commission points to fast fashion as the main culprit as the main source of overproduction and overconsumption. Noting that key stakeholders « are already focusing on increasing the sustainability and circularity of this sector », the Commission could only find that « the transition is slow and the environmental and climate footprint of the sector remains high. »
Notably, the proposed framework includes the introduction of mandatory Ecodesign requirements, waste prevention measures, improved transparency around products’ sustainability characteristics, or the further regulation of green claims .
The Strategy implements commitments made under the European Green Deal, the new Circular Economy Action Plan and the Industrial Strategy, and aims to create a greener, more competitive, more modern and more resilient sector. Simultaneously, the Commission simultaneously launched an initiative to define Transition Pathways for the Textiles Ecosystem, which will kick off in the coming months.
SEC climate disclosure rules. While ESG reporting has seen an uptick in recent years, many public companies have never assessed their climate-related risks and incorporated them into their enterprise risk management strategies, let alone reported on them. On March 21, the SEC proposed new rules to enhance and standardize climate-related disclosures for investors.
Starting as early as FY 2023, registrants will be required to disclose information about climate-related risks that are reasonably likely to have a material impact on its business, results of operations, or financial condition, as well as their greenhouse gas emissions. The Proposal is considering phased-in dates for complying with the rules, to provide additional time for smaller registrants. Indeed compliance deadlines would go from FY 2023 for large accelerated filers to 2025 for smaller reporting companies. SRCs would further be exempt from reporting on their Scope 3 GHG emissions. Comments are expected before May 20, 2022.
New EU-US Privacy framework. Data privacy and security belong to sustainable business conduct and, as such, deserve to be covered here. On March 25, 2022, the European Commission and the United States announced that they have agreed on a new Trans-Atlantic Data Privacy Framework. After nearly two years of uncertainty, this deal will rebuild transatlantic data data protection. The announced beneficiaries of the framework are the citizens on both sides of the Atlantic, with heightened personal data protection, closely followed by businesses. Indeed, data flows facilitated by the deal underpin “more than $1 trillion in cross-border commerce every year” states a fact sheet issued by the White House. Further details are expected from ongoing cooperation between the European Commission and US government as to how this agreement will materialize.