ESG

The battle over the SEC’s climate disclosure rule has entered a new phase, and the winds are shifting—this time, away from the aggressive push for federal mandates. On February 11, Acting SEC Chair Mark Uyeda signaled a significant change by requesting that a federal appeals court delay oral arguments in the ongoing lawsuit against the rule. This request is just the latest in a series of developments that point to a deepening uncertainty about the future of the rule, which mandates that companies disclose climate-related risks to investors.

Hong Kong’s financial ecosystem is getting a major sustainability makeover. The Green and Sustainable Finance Cross-Agency Steering Group (let’s call it the Steering Group for short) has set its sights on ambitious goals for 2025, and today, we’re getting a peek into the game plan.

28 ESG evaluation and data providers have now formally endorsed the "Code of Conduct for ESG Evaluation and Data Providers" as of December 31, 2024. This voluntary code, introduced by the Japanese Financial Services Agency (FSA) on December 15, 2022, is part of a broader effort to standardize and improve the transparency of ESG data and evaluation practices across the industry.

Environmental, Social, and Governance (ESG) has been generating immense pressure on organizations across various industries and around the globe in recent years. Corporate investors are now making capital investment decisions based on a company’s ESG commitments, metrics, and ratings. Legislators and regulators worldwide are introducing regulations that focus on both the broad scope of ESG and its specific aspects (e.g., modern slavery, carbon emissions). Potential employees are choosing workplaces aligned with their values, not just their benefits. Similarly, customers are favoring products and services that reflect their principles. ESG has captured the attention of every level of an organization, from the boardroom to the operational frontlines.

Today, two heavyweights in the world of professional standards, the International Auditing and Assurance Standards Board (IAASB) and the International Ethics Standards Board for Accountants (IESBA), rolled out a game-changer for sustainability reporting and assurance. The duo announced the launch of two new standards—IAASB’s ISSA 5000 and IESBA’s IESSA—aimed squarely at making sustainability reporting more trustworthy, ethical, and transparent.

Germany has thrown its hat into the sustainability ring—though not quite in the way Brussels might have hoped. Just weeks before a pivotal federal election, and amid the collapse of its coalition government, Berlin is calling for a major rethink of the EU’s Corporate Sustainability Reporting Directive (CSRD). The proposals aim to give smaller companies a two-year reprieve from sustainability reporting requirements and eliminate sector-specific obligations entirely.

The European Banking Authority (EBA) has stepped up its efforts to help financial institutions navigate the complexities of Environmental, Social, and Governance (ESG) risks with the release of its draft Guidelines on ESG scenario analysis. These guidelines, now open for public consultation, offer a roadmap for institutions to adopt forward-looking approaches and test their resilience against a backdrop of increasingly volatile environmental and social challenges.