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The EU's Platform on Sustainable Finance ("PSF") – an expert group established to advise the European Commission – recently published a helpful draft report on so-called "minimum safeguards" ("MS") under sustainable finance legislation.
The EU continues to beat a path to a more sustainable future. Nothing too new there, perhaps, but it is increasingly determined to bring the rest of the world along with it. It first proposed a directive on corporate sustainability reporting ("CSRD") in February 2021, which when proposed caused a stir for the significant expansion of non-financial information obligations on non-listed corporates.
On 15 March 2022, the UK's new Economic Crime (Transparency and Enforcement) Act (the "ECA") received Royal Assent. The legislation contained a number of important provisions, including the introduction of a new 'Register of Overseas Entities' and reforms to unexplained wealth orders.
The Queen's speech delivered on 10 May 2022 announced the intention of strengthening the protection and support for victims of human trafficking and modern slavery as well as increasing the accountability of organisations in driving out modern slavery from their supply chains through the implementation of a Modern Slavery Bill (the "MSA Bill").
ESG and sustainability issues continue to be a priority for policy makers and regulators globally. The impact of the Ukraine conflict on energy policy and the recent publication of the IPCC's (Intergovernmental Panel on Climate Change) "state of the union" report on the slender window we have to take action in order to meet our climate targets both highlight the scale of the global challenge we face on climate issues.
On 15 March 2022, the UK's new Economic Crime (Transparency and Enforcement) Act (the "ECA") received Royal Assent. The legislation contains a number of important provisions, including the introduction of a new 'Register of Overseas Entities' and reforms to unexplained wealth orders.
The European Commission recently unveiled its long-awaited proposal for a directive on corporate sustainability due diligence, which is designed to tackle human rights and environmental impacts across value chains (the "CSDD").
Early on the morning of 24 February 2022, the Russian military invaded Ukraine. The full scope of the Russian military operation continues to remain unclear.
Early on the morning of 24 February 2022, the Russian military launched a broad military offensive targeting Ukraine. The full scope of the Russian military operation is not immediately clear.
During the build-up of Russian military forces on the borders of Ukraine over the course of recent months, the UK and other countries have issued firm statements that any further incursion by Russia into Ukraine would result in additional economic sanctions on Russian entities and individuals. Today, following Russia's recognition of the Luhansk and Donetsk regions of Ukraine as independent (and the corresponding movement of Russian forces into these regions), a number of new sanctions and other restrictions have been imposed – with further measures likely to follow depending on Russia's actions over the coming days and weeks.
The Business and Human Rights Resource Centre recently produced a report calling into question the quality and utility of the now ubiquitous social audit reporting (Social Audit Liability: Hard Law Strategies to Redress Weak Social Assurances) (the "Report").
The UK's Corporate Justice Coalition ("CJC"), an organisation made up of various UK and international Civil Society Organisations ("CSOs") including Anti-Slavery International, Friends of the Earth and Business Human Rights Resource Centre has recently recommended the implementation of a potentially wide-reaching corporate "failure to prevent" regime targeting negative human rights and environmental impacts. Such a regime would track similar EU proposals relating to the diligence of 'value chains' for ESG failings and malpractice.
In recent weeks, rumours have started to circulate that President Biden's administration is set to depart from the US government's current approach to the use of sanctions. While the administration's review of US sanctions policy remains ongoing, details of a new softer approach, which is expected to be formally outlined when the review is published at the end of the summer, were described by a number of current and former administration officials in a series of high-level meetings held in the US Congress.
On 16 March 2021, the UK Government published a delayed integrated review of security, defence, development and foreign policy, setting out in general terms the UK's approach to national security and international policy over the next five years (the "Integrated Review").
The evidence outlined by the UK Government includes allegations of forced sterilisation, extra-judicial detention and forced labour. The proposals are intended to "send a clear message that these violations of human rights are unacceptable, and to safeguard UK businesses and public bodies from any involvement or linkage with them".
The EU passed a Regulation on Conflict Minerals ("the Regulation") back in 2017 and its requirements will finally begin to apply to importers of covered minerals as of 1 January 2021. Conflict minerals – usually "the 3Ts" (tantalum, tin, and tungsten) and gold ("3TG") are crucial in the components of many consumer electronic products and have applications in aerospace, automotive, medical and other sectors.
On 22 September 2020, the UK Government published its response to the Transparency in Supply Chains Consultation.
Respect for the human rights of workers in businesses across all jurisdictions and supply chains is now recognised as a core part of corporate compliance and accountability. Yet despite advances in this area, including the introduction of ground-breaking legislation such as the UK's Modern Slavery Act, recent allegations of poor working conditions in Leicester's clothing factories highlight that modern slavery remains a real risk to both UK and overseas workers.
On 6 July 2020, the UK Government enacted the Global Human Rights Sanctions Regulations 2020 ("Sanction Regulations"), which is secondary legislation made under the Sanctions and Anti-Money Laundering Act 2018 ("SAMLA"). This marks the first time that the UK has independently sanctioned people or organisations for human rights violations and abuses under a UK-only regime. Although limited in scope at this stage, there are already calls to increase the number of individuals and organisations who are targeted by the new 'Magnitsky' style sanctions regime.