Europe

Council of EU approves new board gender quota law

The Council of the EU, made up of government ministers from the 27 EU member states, on Oct. 17 approved a new law designed to close the gender gap on company boards. At least 40% of non-executive director positions, or 33% of all director posts, must be occupied by the under-represented sex by 2026, the council said in a statement. Listed companies will need to disclose their board’s gender composition to their national authorities annually. EU member states will have to publish a list of the companies that meet the targets every year.

Council of EU, Parliament strike deal on emission targets for new cars

The Council of the EU and the European Parliament announced on Oct. 27 they had reached a provisional political agreement on stricter emission targets for new cars and vans. The co-legislators agreed to a 55% carbon dioxide emission reduction target for new cars and 50% for new vans by 2030 compared to 2021 levels. By 2035 all new cars and vans will be required to emit zero emissions, effectively banning combustion engine cars and vans. It is the first deal under the EU’s broad Fit for 55 climate package announced in July 2021, the Parliament said in a statement. It also said it had introduced a methodology for reporting on full life-cycle CO2 emissions of cars and vans sold on the EU market. The European Commission will present the methodology by 2025. It will also publish a biannual report from the end of 2025 on the EU’s progress toward zero-emission vehicles, the Parliament said.

Council of EU agrees to tougher rules for buildings’ energy performance

The Council of the EU said on Oct. 25 that it had come to an agreement to revise the Energy Performance of Buildings Directive, legislation designed to improve the energy performance of buildings in the EU. Under the revision, all new buildings would have to emit zero emissions by 2030. Those belonging to public bodies would need to be zero emission by 2028. Existing buildings would require construction work to become zero emission by 2050. Member states agreed to introduce minimum energy performance standards for existing buildings corresponding to the maximum amount of primary energy that buildings can use per square meter annually. The aim is to encourage renovations and gradually phase out the worst-performing buildings, the Council said.

European Commission updates SFDR disclosures for gas and nuclear

The European Commission on Oct. 31 updated disclosure requirements under the Sustainable Finance Disclosure Regulation, or SFDR, for natural gas and nuclear energy investments following the inclusion of gas and nuclear in the EU taxonomy, a classification system of sustainable activities. Under the amended regulation, financial market participants must disclose their portfolios’ exposure to nuclear and gas-related investments that comply with the taxonomy. The amendments have been sent to the Council of the EU and European Parliament, which have three months to approve the changes.

EU securities market regulator makes ESG disclosure strategic priority

The  European Securities and Markets Authority said on Oct. 27 that it was changing its strategic supervisory priorities to include ESG disclosures, amid the growing demand for ESG-related financial products. It said it plans to improve ESG disclosures among issuers and investment firms to tackle greenwashing. The regulator said it aims to increase scrutiny of ESG disclosures by creating supervisory capabilities to include sustainable finance in daily supervisory work. In its 2023 Annual Work Programme, published on Oct. 10, ESMA said it planned in 2023 to develop the remaining technical standards under the Sustainable Finance Disclosure Regulation and would work on addressing greenwashing.

U.K. financial regulator proposes new rules to tackle greenwashing

The U.K.’s Financial Conduct Authority on Oct. 25 proposed new requirements for sustainability-focused investment funds in an effort to clamp down on greenwashing. It said it was proposing three sustainability labels for investment products, including one for investment products that improve their sustainability over time. In addition, it would like to introduce restrictions on the use of terms such as ESG, green or sustainable for products that don’t qualify for the labels. It also proposed making consumer-facing disclosures easier to understand and more accessible, as well as improving disclosures for institutional and retail investors. The proposals are out for consultation until Jan. 25, 2023.

Asia-Pacific

Hong Kong stock exchange launches international carbon market

Hong Kong Exchanges and Clearing launched on Oct. 28 a voluntary international carbon trading market named Core Climate designed to drive capital to climate-related products in Hong Kong, mainland China, throughout Asia and beyond. Market participants will be able to source, hold, trade, settle and retire voluntary carbon credits through the platform. Carbon credits on the platform will come from internationally certified carbon projects from around the world, including carbon avoidance, reduction and removal projects, the exchange said. All projects listed on Core Climate are verified against international standards, such as the Verified Carbon Standard by Verra, it said.

Singapore and Australia sign green economy agreement

Singapore and Australian trade ministers on Oct. 18 signed an agreement to cooperate on cross-border trade and finance with an aim of reducing emissions. The agreement will focus in the first instance on trade and investment, standards, green and transition finance, carbon markets, clean energy, decarbonization, and technology as well as skills and partnerships, the Australian government said. Businesses, investors and other stakeholders will be encouraged to participate in implementing the agreement, the government said.

Taiwanese regulator tightens governance rules for securities firms

Taiwan’s financial regulator, the Financial Supervisory Commission, on Oct. 18 said it was planning to amend corporate governance rules for securities firms and futures commission merchants. Under the amendments, directors of both types of entities will be prohibited from serving on the boards of financial institutions to prevent conflicts of interest, the regulator said. Boards of directors will be responsible for choosing and supervising managers as well as ensuring their accountability, it said. Board chairpersons will be required to have relevant work experience at securities, futures, financial or insurance institutions, it said.

Africa

South Africa approves $8.5 billion package to phase out coal

The South African government on Oct. 20 approved an $8.5 billion package to phase out coal and to speed up its energy transition through a partnership with the governments of the UK, the U.S., France and Germany as well as with support from the EU. The plan was originally announced during COP26 in Glasgow, Scotland in 2021. Implementation of the package will take place between 2023 and 2027 and will include the decommissioning of the country’s retiring coal generation fleet and the strengthening of transmission gird infrastructure to help the shift to renewable energy. It will also help develop the electric car market and the green hydrogen sector, the South African government said.

Latin America and the Caribbean

Chile’s financial regulator sets guidelines for sustainability disclosure

Chile’s financial and supervisory regulator on Oct. 4 said it had published a guide on the implementation and supervision of sustainability standards to improve the quality of sustainability and corporate governance in companies’ annual reports. Under regulation issued in November 2021, companies must disclose in line with international standards set by the Sustainable Accounting Standards Board, the regulator said. The new guide is designed to clarify how companies should comply with the standards, it added. Companies must publish relevant, specific and complete information, it said. Reports must be clear and easy to understand and be consistent over time, it added. The guide also sets out how companies operating in multiple sectors must report and what entities need to do if a specific topic is not applicable to them, the regulator said.