Global ESG Insights - November 2024

Global

COP 29 outcomes

The COP 29 climate change conference took place between 11 and 24 November 2024. Key outcomes include the approval of the New Collective Quantified Goal on Climate Finance, aiming to triple climate finance from developed to developing countries to $300 billion annually by 2035, and increase total climate finance to $1.3 trillion annually. The conference also finalized rules for trading mechanisms under Article 6 of the Paris Agreement, facilitating voluntary cooperation in reducing greenhouse gas emissions.

For more information, view our briefing on the final negotiations, along with a daily roundup of all COP 29 discussions here.

IFRS publishes guide on sustainability risks and opportunities

On November 19, the International Financial Reporting Standards (IFRS) Foundation released a guide to help companies identify and disclose material information about sustainability-related risks and opportunities. This guide supports the implementation of ISSB Standards, emphasizing integrated thinking and the concept of dependencies and impacts. It aligns with IFRS S1 and helps companies make materiality judgments, enhancing transparency for investors. The guide also provides considerations for aligning ISSB Standards with other reporting frameworks.

Azerbaijan’s central bank unveils global green taxonomy roadmap

On November 14, the Central Bank of Azerbaijan released its global green taxonomy roadmap to align international taxonomies and boost financial capital for the transition in line with the Paris Agreement. Partnering with United Nations and global development groups, the roadmap aims to enhance cross-border compatibility of sustainable finance taxonomies. Key focuses include:

• core taxonomy activities for emerging markets and developing economies
• standardizing taxonomy principles
• developing guidelines for financing transition activities based on the G20 transition finance framework

ICMA publishes Guidance Handbook

In November, the International Capital Market Association (ICMA) published a revised version of its Guidance Handbook. The document provides Q&As on the interpretation of the Green Bond Principles, Social Bond Principles, Sustainability Bond Guidelines, Sustainability-Linked Bond Principles and the Climate Transition Finance Handbook. The updated version includes three new questions on sustainability-linked bonds (SLBs):

• how to treat SLBs in the context of sustainable finance disclosure and labelling regimes?
• should an SLB match updated corporate-level sustainability strategy targets and disclosures?
• what should be the pre-requisites when it comes to KPI selection to be able to claim and/or assess SLBP alignment?

Cross-Border

Singapore/China/EU: Taxonomy integration

On November 14, it was confirmed that the Multi-Jurisdiction Common Ground Taxonomy (M-CGT) would now include Singapore, China and the EU. M-CGT will also include 110 economic activities across eight sectors that could be eligible for green financing. While the M-CGT is not legally binding, green bonds and funds that align with the M-CGT criteria can be considered by cross-border investors.

Singapore/China: Green finance initiatives announced

On November 11, the Monetary Authority of Singapore (MAS) announced new green finance and capital markets initiatives to enhance financial cooperation with China. Key initiatives include expanding the Common Ground Taxonomy to integrate the Singapore-Asia Taxonomy, facilitating cross-border green loans and bonds, and piloting an "over-the-counter" bond market framework.

Asia

Hong Kong: Air Pollution Control (Amendment) Bill 2024

On November 15, the Air Pollution Control (Amendment) Bill 2024 was gazetted. It aims to combat unlicensed specified process (SP) operations and implement updated Air Quality Objectives (AQOs). It introduces a closure notification mechanism for unlicensed SPs, revises definitions to include sea-based cement works, and updates AQOs to align with international standards. A six-month transition period for SP licenses and a 36-month period for designated projects are provided.

China: Consultation on Sustainability Disclosure Guidelines

On November 6, the Shanghai Stock Exchange (SSE) released draft guidelines for the preparation of sustainability reports by listed companies, aiming to standardize disclosure and improve quality. Public consultation on the guidelines closed on November 21, 2024.

Europe

EU: Draft Notice on EU Taxonomy Legislation FAQs

On November 29, the European Commission released a draft notice providing FAQs on the interpretation and implementation of the EU Taxonomy. The FAQs offer technical clarifications on the technical screening criteria, disclosure obligations, the “do no significant harm” principle, interoperability with European Standards for Sustainability Reporting, and third-party verification frequency. The Notice complements previous guidance on the Taxonomy Regulation.

EU: Packaging and Packaging Waste Regulation

On November 27, the European Parliament approved the Packaging and Packaging Waste Regulation (PPWR). PPWR aims to enhance packaging circularity and tackle waste levels across the EU, mandating affected companies to focus on design changes and material selections to achieve specific recycling performance standards. It will apply to all types of packaging and packaging waste, regardless of the material or origin, affecting both EU and non-EU companies. The European Council must now approve the Regulation.

EU: CLP Regulation

On November 20, the Classification, Labelling and Packaging of Substances and Mixtures Regulation (CLP Regulation) was published in the Official Journal. The CLP Regulation aims to provide more clarity on labeling issues, such as readability and digital labeling. Specifically, the CLP Regulation introduces:

• better and faster processes for all actors to inform on hazards of chemicals placed in the EU market
• improved communication of chemical hazards through simpler and clarified labeling and advertising requirements
• specific rules for refillable chemical products, such as home care chemicals

EU: Ambient Air Quality Directive

On November 20, the Ambient Air Quality Directive was published in the Official Journal. The new rules will contribute to the EU's objective to achieve zero pollution by 2050 and aim to help prevent premature deaths due to air pollution. EU citizens will be able to seek compensation for damage to their health in cases where EU air quality rules are not respected. Member States must transpose most of the provisions of the Directive into national law by December 12, 2026.

EU: Forced Labour Products Regulation

On November 19, the European Council adopted the Forced Labour Products Regulation. This Regulation prohibits the placing and making available on the Union market, or export from the Union market of any product made using forced labor. It establishes a framework for legal action and mandates the creation of a database to identify forced labor risk areas. Member State authorities will investigate and share information on violations. The regulation will apply three years after its publication in the Official Journal.

EU: Regulation on an EU certification for carbon removals

On November 19, the European Council adopted a Regulation establishing an EU certification framework for carbon removal. This framework covers:

• permanent carbon removals storing carbon for centuries
• carbon storage in long-lasting products for at least 35 years
• carbon farming enhancing sequestration in forests and soils

An EU-wide registry will be established four years after the Regulation’s entry into force to ensure transparency and traceability.

EU: ESG Ratings Regulation

On November 19, the European Council adopted the Regulation on ESG rating activities. The regulation mandates that ESG rating providers be authorized and supervised by the European Securities and Markets Authority, comply with transparency requirements, and prevent conflicts of interest. Providers outside the EU must obtain endorsement or recognition to operate within the Union. The Regulation will be published in the EU’s Official Journal and will apply 18 months after its entry into force.

EU: Revised Product Liability Directive

On November 18, the Revised Product Liability Directive (PLD) was published in the Official Journal. The new PLD provides a framework for compensation to individuals harmed by unsafe tangible and intangible products. Specifically, the PLD:

• extends the definition of "product" to digital manufacturing files and software
• makes the right to compensation easier by ensuring that an injured person who claims compensation before a national court can request access to relevant evidence
• ensures that consumers are compensated for damages caused by a product manufactured outside of the EU and that the company importing the product, or the EU-based representative of the foreign manufacturer can be held liable for damages

EU: Deforestation-free Products Regulation delayed

On November 14, the European Parliament voted to delay the Deforestation-free Products Regulation application by one year, extending deadlines to December 2025 for large companies and June 2026 for smaller enterprises. Additionally, a new “no risk” category for deforestation has been introduced. The EU Council and Parliament must now negotiate these amendments. Recent guidance on the Deforestation-free Products Regulation clarifies key concepts and due diligence requirements but does not reflect the proposed delay.

EU: European Parliament passes decision on unfinished legislative business

On November 13, the European Parliament announced it will continue work on 120 legislative files in the new legislature. This decision will prevent the legislation from lapsing. Key ESG proposals include:

• Artificial Intelligence Liability Directive
• End-of-Life Vehicles Regulation
• Green Claims Directive
• Surface and Groundwater Pollution Directive
• Waste Framework Directive
• Soil Monitoring Directive
• “One substance, one assessment” chemicals package

EU: European Commission Issues FAQs on Sustainability Reporting

On November 13, the European Commission released FAQs to clarify sustainability reporting requirements under the Corporate Sustainability Reporting Directive (CSRD) and the Sustainable Finance Disclosure Regulation (SFDR). The FAQs provide detailed guidance on reporting requirements, assurance processes, and key intangible resources. They also address third-country undertakings and confirm that non-material indicators reported under CSRD do not contribute to SFDR principal adverse impacts.

EU: Platform Workers Directive

On November 11, the Platform Workers Directive was published in the Official Journal. It ensures that platform workers receive the appropriate legal employment status. The Directive sets minimum rights, enhances transparency in algorithmic decision-making, and mandates platform operators to provide information to national authorities. It will be enforced from December 1, 2024, with Member States required to comply by December 2, 2026.

EU: Regulation on Single European Sky Implementation

On November 11, the Regulation on Single European Sky Implementation was published in the Official Journal. This Regulation aims to enhance air traffic safety, support sustainable air transport development, and improve air traffic management across Europe. It establishes a pan-European network with integrated airspace and advanced management systems. The regulation will be in force from December 1, 2024, with specific articles applying from 2026.

EU: Proposal to Consolidate EU ESG Reporting Requirements

On November 8, the European Commission President announced plans to combine the CSRD, EU Taxonomy Regulation, and CSDDD into a single omnibus law, to be published in 2025. This aims to reduce regulatory burdens by eliminating redundant and overlapping requirements. The initiative aligns with the Budapest Declaration's call for a "simplification revolution" and seeks to cut reporting requirements by at least 25% in the first half of 2025. The focus will be on maintaining the law's content while streamlining compliance processes.

For more information, view our briefing.

EU: Marketing of Construction Products Regulation

On November 5, the European Council adopted the Marketing of Construction Products Regulation. This Regulation empowers the European Commission to set mandatory environmental sustainability requirements for public procurement. It aims to remove obstacles to the circulation of construction products within the Internal Market and is part of the Circular Economy Action Plan under the European Green Deal.

EU: Urban Waste-water Directive

On November 5, the European Council adopted the Urban wastewater Directive. The revised Directive extends the scope to agglomerations of 1,000 population equivalents and above, requiring collecting systems and secondary treatment by 2035. By 2039, nitrogen and phosphorus removal will be mandatory for large plants, with quaternary treatment (the treatment to remove micropollutants from water to ensure it is safe for reuse) for micropollutants by 2045. Producers of pharmaceuticals and cosmetics will cover 80% of quaternary treatment costs.

EU: Regulation on European Environmental Economic Accounts

On November 5, the European Council adopted the Regulation on European Environmental Economic Accounts. The Regulation will introduce three new environmental economic accounts modules: forest accounts, ecosystem accounts, and environmental subsidies and similar transfers accounts. Member States will be required to report on these data points starting in 2025 and 2026.

Middle East

Saudi Arabia: RVCMC Launches Voluntary Carbon Market Platform

On November 13, the Regional Voluntary Carbon Market Company (RVCMC) launched its exchange platform. This platform aims to scale up high-quality carbon credits, supporting Saudi Arabia’s efforts to achieve net zero by 2060.

Jordan: New Electricity Law

On November 9, Jordan’s Cabinet approved a new permanent electricity law. This new framework aims to attract investment in electricity storage and green hydrogen projects as part of the Kingdom’s Economic Modernization Vision. Key points include allowing investors to build and operate autonomous power generation and storage stations under public-private partnerships, encouraging self-production and distribution of electricity independent of the national grid, and authorizing licensed entities to establish and operate power storage stations for the first time.

UAE: Pledge to Cut Emissions by 47% by 2035

On November 7, the United Arab Emirates (UAE) committed to reducing its emissions by 47% from 2019 levels by 2035, as part of its updated Nationally Determined Contributions. The plan includes transitioning from fossil fuels to civil nuclear energy, increasing solar capacity, and adopting waste-to-energy technologies.

UK

UK: Response published on Scope 3 GHG emissions reporting consultation

On November 21, the Government published a response on a consultation on Scope 3 greenhouse gas (GHG) emissions reporting in the UK, including the Streamlined Energy and Carbon Reporting (SECR) framework. Key findings highlight the high costs associated with data collection and verification, particularly for small and medium-sized enterprises. Opinions on the Streamlined Energy and Carbon Reporting SECR framework were mixed, with suggestions for digitalization and policy streamlining to enhance its effectiveness.

UK: Update on Deposit Return Scheme

On November 20, the Department for Environment, Food and Rural Affairs updated its policy on drinks container deposit return schemes (DRS). The government committed to:

• laying regulations for England and Northern Ireland in November 2024
• appointing deposit management organizations in April 2025
• launching the scheme in England, Scotland, and Northern Ireland in October 2027

The statement also notes a delay in Wales, with the Welsh Government planning its own DRS.

UK: Principles for Voluntary Carbon and Nature Market Integrity published

On November 15, the UK Department for Energy Security and Net Zero released principles for voluntary carbon and nature market integrity. Key points include minimizing emissions before using carbon credits, using only verified credits, disclosing credit use in sustainability reports, following best practices for transition planning, making accurate green claims, and supporting high integrity market growth. A consultation on implementation will start in early 2025.

UK: Legislation to restrict new coal mining licenses

On November 14, the Government announced legislation to ban new coal mining licenses, reinforcing its commitment to clean energy. This move aims to phase out coal, and transition to renewable energy sources. The ban will aim to support the UK's climate goals, create new jobs in clean energy sectors, and enhance air quality. Limited exceptions will be made for safety or restoration purposes.

UK: Consultation response on the future regulatory regime for ESG ratings provider

On November 14, the Government published their response on the future regulatory regime for ESG ratings providers. The legislation is expected to be introduced in 2025, with a suggested 4-year process. Once published, it will require providers to be authorized by the Financial Conduct Authority (FCA) and meet specific conditions. The proposal excludes some providers already regulated by the FCA. Draft regulations were also published, which are open for consultation until January 14, 2025.

UK: Green Taxonomy consultation

On November 14, a consultation on the UK Green Taxonomy was published. It aims to support the transition to a net zero, climate-resilient economy by mobilizing private capital. It explores the potential of a UK Green Taxonomy to prevent greenwashing and channel investments into sustainable activities. The consultation seeks feedback on the taxonomy’s design, use cases, and integration with existing sustainable finance policies. It emphasizes the importance of international interoperability, regular updates, and robust governance to ensure the taxonomy’s effectiveness in promoting sustainable growth and environmental objectives. Responses are invited until February 6, 2025.

UK: EHRC publishes guidance for Employers on Preventing Workplace Sexual Harassment

On November 12, the Equality and Human Rights Commission (EHRC) published new guidance for employers on preventing sexual harassment at work. This includes a checklist, action plan, and monitoring logs, originally designed for the hospitality sector but adaptable for other workplaces. The guidance, outlines steps for communication, creating a safe work environment, and implementing policies to address and prevent harassment.

UK: New emission reduction target announced

On November 12, the Government announced at COP29 that the UK aims to cut emissions by 81% by 2035, updating the previous target of 78%. Further to this, the Government also confirmed their commitment to maintaining £11.6bn in climate finance until March 2026, a target originally set by the previous Government.

UK: Finance Bill 2025

On November 7, the Finance Bill 2025 was published. Amongst other things, the Bill aims to enhance environmental tax measures and support sustainable practices. It includes provisions on environmental tax rates announced in the Autumn 2024 Budget. Key provisions cover the climate change levy, landfill tax, plastic packaging tax, and aggregates levy. Additionally, the Bill allows for the introduction of the carbon border adjustment mechanism (CBAM), set to start January 1, 2027.

UK: Government response to the Product Safety Review

On November 5, the government published its response to the Product Safety Review. It confirmed the Government would prioritize the sale of safe goods online and address cross-sector hazards. Key points include:

• developing a responsive regime for emerging hazards
• stronger responsibilities for online marketplaces
• voluntary digital labeling to reduce business costs
• enhanced leadership and coordination by the Office of Product Safety and Standards
• central repository for product safety data

The government plans to use the Product Regulation and Metrology Bill to enforce these measures. Future legislation may address hazards like button batteries and lithium-ion batteries. The response also considers aligning UK measures with evolving EU product safety laws. Further consultations and secondary legislation are anticipated.

US

US: National Strategy to Prevent Plastic Pollution

On November 21, the National Strategy to Prevent Plastic Pollution was published. It aims to protect communities from plastic pollution through domestic and international actions. The strategy focuses on reducing single-use plastics, enhancing transparency, and promoting circular economies. It aligns with the U.S. commitment to reduce plastic pollution and is part of the wider effort to build a circular economy.

US: DOE publishes report on Sustainable Aviation Fuel

On November 13, the U.S. Department of Energy (DOE) released a report on Sustainable Aviation Fuel. It details strategies to boost sustainable aviation fuel (SAF) production. The report highlights the potential of SAF to decarbonize aviation and outlines steps for the U.S. to lead in SAF production by 2030. Key findings include the need for accelerated deployment of current technologies, significant investments, and international policy coordination. The report also addresses cost barriers and the importance of long-term offtake agreements to stimulate investment and demand.

US: EPA Finalizes Rule to Reduce Methane Emissions

On November 12, the Environment Protection Agency (EPA) announced a final rule to cut methane emissions from the oil and gas sector. This rule forms part of the Methane Emissions Reduction Program and introduces a Waste Emissions Charge on large emitters. Companies that report emissions of over 25,000 metric tons of CO2 equivalent per year, beginning with calendar year (CY) 2024, must pay $900 per metric ton of excess methane in CY 2024, increasing to $1,200 for CY 2025, and $1,500 for CY 2026. Facilities in compliance with the recently finalized Clean Air Act standards for oil and gas operations would be exempt from the charge after certain criteria set by Congress are met. The EPA expects that over time, fewer facilities will face the charge as they reduce their emissions and become eligible for this regulatory compliance exemption.

Co-authored by Nathan Handoll (ESG Researcher in Knowledge).

Further reading and listening

Commercially Connected - November 2024 | Eversheds Sutherland

COP29: Final Negotiations | Eversheds Sutherland

Global Employment and Labor Law Update | November 2024 | Eversheds Sutherland

COP29: Nature and Biodiversity, Indigenous People, Gender Equality, Oceans and Coastal Zones | Eversheds Sutherland

COP29 - Urbanization, Transport and Tourism | Eversheds Sutherland

COP29: Food, Agriculture and Water | Eversheds Sutherland

COP29: Human Capital / Children and Youth / Health /Education | Eversheds Sutherland

COP29: Energy, Peace, Relief and Recovery | Eversheds Sutherland

COP29: Science, Technology, Innovation and Digitalization | Eversheds Sutherland

COP29: Finance, Investment and Trade | Eversheds Sutherland

COP29: World Climate Action Summit – Day 2 | Eversheds Sutherland

Innovate. Protect. Thrive: IP strategies for the AI-ESG era | Legal Telescope - AI & ESG | Eversheds Sutherland

COP29: World Climate Action Summit – Day 1 | Eversheds Sutherland

Clean claims or dirty lies? The battle against corporate washing | Legal Telescope - AI & ESG | Eversheds Sutherland

UK modern slavery: influential report urges changes to corporate accountability

EU: Proposal to consolidate ESG reporting requirements | Eversheds Sutherland