<p>Filter Knowledge</p>

A regular briefing for the alternative asset management industry. 

On 5 April 2023, the Commission launched a consultation on its draft of the long-awaited technical screening criteria ("TSC") for the four remaining Taxonomy objectives, sometimes known as "TAXO4"¹.  The TAXO4 TSC were initially intended to be in place by 1 January 2023, a year after the TSC for the first two environmental objectives, but have been significantly delayed. Therefore, the draft's publication finally provides a fuller picture of the Taxonomy and gives those with ambition to align to the remaining environmental objectives an idea of the scale of that task.

In 2020, the UK outlined its roadmap to implementing the recommendations of the Taskforce on Climate-related Financial Disclosures ("TCFD"). With the first wave of premium listed companies already having prepared reports, the second wave will see standard listed companies, the largest asset managers and very large companies issuing TCFD reports or TCFD-aligned reports under the Companies Act this year. Smaller asset managers with over £5bn of assets under management will already be thinking about how to make their first firm-level reports next year.

The European Commission (Commission) has issued further guidance on the interpretation of the Sustainable Finance Disclosure Regulation (SFDR).  This is in the form of responses to questions put to it in September 2022 by the European Supervisory Authorities (ESAs).  The responses include guidance on the definition of sustainable investment, disclosures around the reduction of carbon emissions and principal adverse impact disclosures.

In this week's Alternative Insights, we are looking forward to the key themes for 2023, following an event we held in London on Wednesday and the launch of our new annual Insights publication.

Entering the policy debate behind other antitrust regulators, the CMA has signalled that it will give firms more latitude to pursue green collaborations – but the devil will be in detail.

The EU's Directive on Corporate Sustainability Reporting ("CSRD") was published in its final form in mid December 2022, giving organisations in its scope certainty about when the significantly expanded reporting requirements will apply to them.

Our ESG timeline sets out recent and expected UK and EU legal and regulatory developments relating to ESG and wider sustainable business topics. The timeline can be filtered according to your business type or the relevant ESG theme.

To improve is to change; to be perfect is to change often.

As legislators and regulators increase their focus on human rights and good governance, the UN Principles for Responsible Investment ("UNPRI"), an international organisation that works to promote the incorporation of environmental, social and governance (ESG) factors into investment decision-making, announced at the end of last year the creation of a new collaborative stewardship initiative, Advance.

On 18 November 2022, the European Securities and Markets Authority (ESMA) published a consultation on the text of proposed draft guidelines relating to the use of ESG or sustainability related terms in funds' names (the Draft Guidelines).

As COP27 drew to a close on the afternoon of Friday 18 November, following two weeks of the conference in Sharm el-Sheikh, the first drafts of the COP27 agreement were published, but getting the deal finalised looked to be a difficult task.

With COP27 starting earlier this week, all eyes remain on what progress governments and international organisations are able to make to meet climate critical finance targets. Climate finance is a major issue at COP27, as it has been since developed countries initially agreed to mobilise $100 billion per year at COP15 in 2009 by 2020 (later extended to 2025). However, this annual target has never been met.

Having previously been expected earlier this year, the FCA has now published its consultation paper on the proposed new sustainability disclosure requirements (SDR) regime and a set of consumer-friendly sustainability labels. This is, in effect, the UK's answer to the EU Sustainable Finance Disclosure Regulation (EU SFDR), although the proposed UK regime goes further in terms of having formal product labels and is bolstered by rules already in force that require many firms to report climate-related risks and opportunities in accordance with the TCFD guidelines (covered in our 2022 New Year Briefing).

In this video series, our cross-disciplinary team of market-leading experts unpack some of the key ESG issues that corporates and counsel alike will need to be aware of when developing their own sustainability strategies. 

In July 2022, the FCA published its review of the climate-related disclosures of premium listed commercial companies, for the first time since the rule mandating such disclosures was introduced for a wider range of listed issuers on 1 January 2022.

Our ESG timeline archive sets out past UK and EU legal and regulatory developments relating to ESG and wider sustainable business topics from January 2021 onwards. As with the main timeline, the timeline archive can be filtered according to your business type or the relevant ESG theme.

Welcome to the third episode in our Spotlight on ESG video series.