Sustainability Blog #15

Legislation and regulation

On 8 November, the European Financial Reporting Advisory Group (EFRAG) released a draft voluntary European Sustainability Reporting Standard (ESRS) for small and medium-sized enterprises. The paper was prepared by the EFRAG Secretariat for a public discussion at the meeting of EFRAG’s Sustainability Reporting Board (SRB). It includes a call for micro-, small, and medium-sized enterprises to play a pivotal role in fostering a sustainable and inclusive economy. The focus is on elevating their approach to managing sustainability challenges, including issues like pollution and workforce health and safety, which are among their everyday concerns. By addressing these concerns, businesses can pave the way for competitive expansion and fortify their resilience in the short, medium, and long term. Moreover, the standard aims to fulfil the data requirements of lenders, credit providers, and investors, offering valuable insights that can help businesses secure financial support. Furthermore, it serves as a resource to meet the sustainability information needs of larger corporations, enabling suppliers to respond to the data requirements of their business partners.

On 22 November, the European Parliament (EP) adopted its position on new rules on packaging, aimed at tackling constantly growing waste and boosting reuse and recycling. The EP’s stance on the proposed revision of the Packaging and Packaging Waste Directive was passed with 426 votes in favour, 125 against, and 74 abstentions. With the Parliament’s position now adopted, negotiations can start with the EU member states to finalise the legislation in so-called trilogue talks also involving the European Commission. The Parliament aims to reduce the amount of plastic packaging in Europe by 5%, 10%, and 15% by 2030, 2035, and 2040, respectively. Specific measures, such as prohibiting lightweight plastic carrier bags (except when necessary for hygiene or to prevent food waste) and imposing strict limits on single-use formats like miniature hotel toiletries, are proposed to reduce plastic packaging.

News & Publications

The United Nations Environment Programme (UNEP) has published an interesting report called the Global Climate Litigation Report: 2023 Status Review. The report provides an overview of the current state of climate change litigation and an update on global climate change litigation trends, following previous UNEP reports published in 2017 and 2020. It serves as an essential resource to understand the current state of global climate litigation, including descriptions of the key issues that courts have encountered in such cases. The report emphasizes the importance of an environmental rule of law in combating the triple planetary crisis of climate change, biodiversity loss, and pollution. You can find the report here.

The European Commission has announced the launch of its pilot auction under the European Hydrogen Bank. This initiative is designed to foster the growth of the renewable hydrogen market, a crucial component of the strategy to reduce carbon emissions in heavy industry and transportation. The launch of the Hydrogen Bank auctions marks a step in the EU’s efforts to build a market for renewable hydrogen, stimulate investments in production capacity, and bring production to scale.

The Bank for International Settlements (BIS) has published a working paper on Greenhouse Gas Emissions and Bank Lending. The paper investigates the effect of firms’ greenhouse gas (GHG) emissions on bank loans, which may, in turn, have a direct effect on their investment decisions. You can find the paper here.