Key highlights from July 2024 in the sustainability space.
1- Update on US Climate Reporting Rules
Back in October 2023, we had reported that California had adopted first-in-the-US corporate climate disclosure bills. This month, Governor Newsom introduced amendments to delay the compliance deadlines with the bills by two years, deeming compliance with them ‘infeasible’ but confirming that the state remains committed to implementing the regime. California is not alone in its commitment to sustainability related disclosure requirements, with a report published by Fitch on the 9th of July revealing that Washington, New York, Illinois and Minnesota are also going ahead with similar disclosure requirements. The progression of these laws and regulations at state level reveals that thousands of companies operating in the US will - eventually - be required to provide climate-related reporting, even in the potential absence of effective climate reporting rules from the Securities and Exchange Commission.
2- Activity around ESRS
New material around the European Sustainability Reporting Standards (ESRS) were published this month and should prove particularly useful for companies preparing to disclose under the CSRD in 2025. First, on the 10th of July, the Global Reporting Initiative (GRI) published a Q&A document on the meaning of the ESRS for existing users of the GRI Standards. Then, on the 25th of July, EFRAG released a study analysing early practices of companies preparing to disclose under the ESRS, highlighting the opportunities and challenges faced by these entities. Shortly thereafter, on the 26th of July, EFRAG issued new explanations of the ESRS as part of its Compilation of Explanations.
3- Turning point for ESG in the UK as Labour gains power
On the 4th of July, the general election in the UK saw a Labour government gain power for the first time in 14 years, shepherding in a new era for sustainability in the UK. The elections are expected to have significant consequences for ESG in the UK, as the Labour government differs significantly from the preceding Conservative governments on multiple policy outlooks relating to this front. Indeed, the new government has demonstrated a sustained commitment to the energy transition agenda and net-zero policy, highlighting these issues as a key priority during their election campaign. The government is also expected to undertake significant action in relation to Diversity, Equality and Inclusion. The prominence of these issues in the new government’s agenda is promising for the future of ESG in the UK.
4- New Zealand finalises groundbreaking trade deal to eliminate tariffs on sustainable goods
On the 2nd of July, New Zealand concluded a pioneering trade deal with Costa Rica, Iceland and Switzerland that will see tariffs removed from hundreds of sustainable and eco-friendly products, according to Trade and Agriculture Minister Todd McClay. The Agreement on Climate Change, Trade and Sustainability (ACCTS) sets an example for multilateral action on climate change, demonstrating how sustainability-enhancing initiatives can simultaneously boost states’ economies.
- Content prepared with the help of Defne Fresko Tasci.