December 5, 2023

The Climate Report: Fourth Quarter 2023

Amandine Delsaux, Daniella Einik, José Estandía, Kevin Holewinski, Sushma Jobanputra, Chris Papanicolaou, Armelle Sandrin-Deforge, Holly Sara, Sheila Shadmand, Jane Borthwick Story, Roberto Torres

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REGULATORY ISSUES & UPDATES

Mandatory Climate Change Reporting Requirements Under the New European ESRS E1

The implementation of the European Sustainability Reporting Standards poses risks for reporting companies, in particular with respect to climate-related disclosures.

Transitioning Into the European Carbon Border Adjustment Mechanism

In its mission to be climate-neutral by 2050, the EU has launched a landmark tool to prevent "carbon leakage" and create a level playing field between EU producers and non-EU producers.

Environmental Reviews Under NEPA to Include More Thorough Consideration of Climate Change Risks

Several recent proposals impacting implementation of the National Environmental Policy Act demonstrate a renewed focus on considering climate change in federal decision-making.

EU Commission Consultations on SFDR

The consultations focus on potential shortcomings of the Sustainable Finance Disclosures Regulation, including legal certainty, the usability of the regulation, and its ability to stop greenwashing.

Green Taxonomy Developments in Latin America and the Caribbean

Following the actions of Colombia and Mexico, other Latin American and Caribbean countries are in the process of developing their own green taxonomies.

Landmark Climate Bills Enacted in California

The California legislature recently passed landmark climate bills that surpass the emissions disclosure requirements of any other existing state law.

LITIGATION ISSUES & UPDATES

In Keeping With Global Trend, Youths Continue to Advance Climate Litigation in the United States in 2023

A first-of-its-kind U.S. state court judgment illustrates the willingness of courts—at least in certain circumstances—to curb state action based on environmental rights in state constitutions.

U.S. EPA Announces New Climate-Focused Enforcement Strategy

The strategy will focus enforcement on increasing oversight of oil and gas facilities, landfills, and the production and consumption of hydrofluorocarbons.

Pennsylvania Court Strikes Down Participation in the Regional Greenhouse Gas Initiative

A recent Pennsylvania Commonwealth Court decision makes clear that Pennsylvania will need to undertake legislative action in order to join the multistate effort to reduce greenhouse gas emissions.

TRANSACTIONAL ISSUES & UPDATES

U.S. Treasury Publishes Principles for Net-Zero Financing and Investment by Financial Institutions

For the first time, a major U.S. government agency has provided guidance to the financial sector regarding the development and implementation of net-zero transition plans.

Final Disclosure Recommendations From the Taskforce on Nature-related Financial Disclosures

The recommendations are expected to raise the profile of nature-related issues, making it easier for investors to identify companies that align with their values vis-à-vis the natural world.

Brazilian Sustainability Initiatives

Both private and governmental entities in Brazil are exploring the ESG market by employing new financial instruments, rules, and regulations to advance sustainable practices.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.