Speaking Sustainability

The High Court of England and Wales (the “High Court”) recently ruled¹ that the U.K. government’s Net Zero Strategy (NZS) breached the detail and reporting requirements of the Climate Change Act 2008 (“CCA 2008”). In this post, Akin provides readers with the background to the NZS and the judicial review process, and then turns to a discussion regarding the content and significance of the proceedings themselves.

As we noted previously, against the backdrop of the European Green Deal and related sustainable finance initiatives, environmental, social and governance (ESG) factors are increasingly being incorporated into loan and high-yield documentation. As a result, the concept of a “sustainability coordinator” has emerged in the leveraged finance space, and the European Loan Market Association (LMA) recently published introductory guidance to this relatively new and evolving role (available here).

Almost a year ago, we reflected on the outcome of the 26th meeting of the Conference of the Parties to the U.N. Framework Convention on Climate Change (UNFCCC), or “COP 26” (see our article on five takeaways from COP 26 here). COP 26 brought 120 world leaders together to address climate change and possible solutions to limit rising temperatures to 1.5^oC from pre-industrial levels. The result: (i) commitments from national leaders to communicate clear plans to achieve this goal the following year (at the 27th meeting of the UNFCCC (COP 27)), and (ii) a commitment by developed countries to “fully deliver” on a pledge of $100 billion annually in climate finance to developing countries most affected by the climate crisis. This pledge was originally promised by 2020; at COP 26, nations vowed to urgently deliver in order to maintain trust between countries.

The Commodity Futures Trading Commission (CFTC) is joining other federal agencies in the move toward a whole-of-government approach to the mitigation of climate-related financial risk. The CFTC has taken steps this summer—including convening on Voluntary Carbon Markets and a Request for Information (RFI), which has an upcoming deadline for comments on October 7 (extended from the original August 8 deadline)—indicating that the commission is taking a hard look at carbon credits and is actively considering oversight of voluntary carbon markets. 

In view of the upcoming July 29 deadline to the International Sustainability Standards Board’s (ISSB) consultation period for its proposed sustainability disclosure standards, Akin Gump would like to remind readers of the background and content of the ISSB and the disclosure regime it aims to put in place.

Legislation to “prevent corporate greenwashing” by requiring major companies doing business in California to publicly disclose their scope 1, 2 and 3 greenhouse gas (GHG) emissions has cleared two critical committees.