A set of mandatory environmental, social, and governance (ESG) reporting standards, the European Sustainability Reporting Standards (ESRS), are set to enter into force in the European Union (EU) at the end of this year. These standards require mandatory ESG reporting for certain companies that do business in the EU. This summary provides an overview of who is subject to the CSRD and when, summarizes key information covered under this initial set of standards, highlights technical guidance from the entity that created the standards, and discusses planned future development of additional standards.
Continue Reading European Union Advances Mandatory ESG Reporting Standards

The Greenhouse Gas (GHG) Protocol Corporate Standard and related guidance are widely accepted as leading sources for companies to use in quantifying and reporting their GHG emissions. Companies report GHG emissions for a number of reasons (both legally mandated and voluntary) and in a number of contexts. Accurate accounting and reporting is critical because inaccuracies in emissions reporting can potentially expose the reporting entity to several types of legal liability, as evidenced by the recent proliferation of lawsuits alleging “greenwashing” claims and increasing regulatory scrutiny in this area.Continue Reading Updates to the GHG Protocol Corporate Standard and Guidance: What to Expect

President Biden issued his first veto today. Biden’s veto returns to Congress a joint resolution that attempts to nullify a recent rule from the Department of Labor regarding consideration of Environmental, Social, and Governance (ESG) factors when investing in retirement accounts. This rule went into effect on January 30, 2023, and allows for retirement plan fiduciaries to consider ESG factors when selecting investments and exercising shareholder rights. Some have said ESG investing is controversial because it allows for retirement plan fiduciaries to consider factors such as climate change and equity instead of focusing solely on maximizing financial returns; while others have argued that past measures prohibiting the consideration of ESG factors are equally problematic.Continue Reading President Biden’s First Veto is on Congress’ Disapproval of ESG Investing Rule

On November 28, 2022, the Council of the European Union formally adopted the Corporate Sustainability Reporting Directive (CSRD), following the European Parliament’s formal adoption of the directive earlier last month. The CSRD is a broad environmental, social, and governance reporting framework that will impose uniform, mandatory reporting requirements on many companies with European operations, including companies not based in Europe.
Continue Reading European Union Adopts Corporate Sustainability Reporting Directive With Impacts Beyond Europe

We have written extensively on the US Securities and Exchange Commission (SEC) proposal to require that public companies disclose climate-related information and other environment, social, and corporate governance (ESG) trends. However, the European Union (EU) is at the vanguard of emerging requirements focused on climate-related information and broader ESG-aligned information.Continue Reading Emerging EU ESG Requirements: Transatlantic Implications for Multinational Companies

On September 22, 2021, the Division of Corporation Finance (Division) of the Securities and Exchange Commission (SEC) issued a sample comment letter to highlight its increased focus on climate change-related disclosures or the absence of such disclosures in issuer filings under the Securities Act and the Exchange Act. This sample comment letter follows a recent increase in climate-related comments the Division has issued during the disclosure review process, and many of the sample comments appear to be derived from actual comment letters issued in 2021. The sample is consistent with the SEC’s 2010 Guidance Regarding Disclosure Related to Climate Change, which does not mandate specific, line item climate change-related disclosures, but instead takes a principles-based approach.
Continue Reading SEC Issues Sample Climate Change Comment Letter

In a recent post, we discussed the various risks, trending issues, and emerging concerns arising from environmental, social, and corporate governance factors (“ESG”). As noted previously, neglecting ESG considerations can result in a number of risks to a company, including risks associated with the reputational, financial, and legal impacts of handling ESG issues poorly. We also observed how managing ESG issues well can enhance corporate value and performance, and create competitive advantages for companies. Given these emerging risks and opportunities, it is perhaps unsurprising that ESG has begun to play a larger role in the M&A context in recent years.
Continue Reading ESG Considerations in M&A

As noted previously in the October 2020 edition of Baseload, the capital markets have seen explosive growth in the issuance of ESG debt in recent years. The advantages to utilities have been generally twofold: (1) provide access to a larger investor base than would otherwise be available (i.e. those investors with ESG-focused criteria) and (2) provide evidence of good corporate citizenship regarding certain of the issuer’s projects.
Continue Reading ESG Frameworks: Taking Green Bonds and Social Bonds Off the Shelf

Environmental, social and corporate governance (ESG) – like climate change and environmental justice – has been a hot topic of discussion in the early days of the Biden administration. Illustrating the interconnectedness of the trending issues, climate change and environmental justice are pillars of ESG.
Continue Reading Environmental, Social and Corporate Governance: What are the Risks, Really?