Value Chain Sustainability Laws

Japan is on the path to join the increasing number of countries that are adopting mandatory reporting standards based on those of the IFRS’ International Sustainability Standards Board (ISSB). The Sustainability Standards Board of Japan (“SSBJ”) approved three exposure drafts of reporting standards on March 21, 2024.

Last year, California enacted two major pieces of climate legisation, SB 253 and SB 261 (See https://mcalan.com/momentous-california-climate-accountability-laws-await-governors-signature.)  However, in January Governor Newsome’s proposed 2024-2025 budget did not include funding for their enforcement. That led to consternation and questioning by many environmentalists of the Governor’s commitment to those laws and indeed to the cause of halting climate change.

SEC Puts Its Own Climate-Related Disclosure Rules on Hold By Allen Campbell, JD, MBA On March 6, 2024, the US Securities and Exchange Commission amended its controversial rules that will require registrants to provide climate-related information in their registration statements and annual reports (the “Final Rules”). But less than a month later, on Thursday, April 4, 2024, the SEC said…

CSDDD, the world’s most consequential piece of sustainability legislation, appears to be proceeding to enactment. This is happening even though the legislative process seemed to have stalled out in February, after being subjected to contentious lobbying. If enacted, it will be the pre-eminent example what I call Value Chain Sustainability, in that it will impose several ESG obligations, notably (i)…

Businesses need to collaborate to understand and cope with “The Expanding Universe of ESG”. I coined that phrase several years ago to denote the many ways that sustainability/ESG has expanded – conceptually, geographically, legally, and so on. The trend is clear, with no end in sight.

The term “value chain” has expanded in recent years as part of the expanding attention and scope of sustainability and ESG. It now includes activities and uses that are not directly under a company’s ownership or control. Accordingly, the scope of a company’s responsibility is increasing. This is, of course, challenging for management, and controversial.

There is substantial business support for Value Chain Sustainability (VCS) laws, such as the European Union’s draft Corporate Sustainability Due Diligence Directive (CSDDD). In recent weeks big companies have come together to call upon their governments to adopt and/or strengthen such legislation.

This is another blog post in our series on Value Chain Sustainability. In a Nutshell: The new Corporate Sustainability Reporting Directive (CSRD) of the European Union will mandate in-scope companies to disclose “opportunities related to sustainability matters”. This is questionable public policy for many reasons and should be reconsidered. 

Game Changer: The European Union Corporate Sustainability Reporting Directive (CSRD) This is another blog post in our series on Value Chain Sustainability. In a Nutshell: The Corporate Sustainability Reporting Directive (CSRD) will require nearly 50,000 EU companies -- and about 11,000 non-EU companies -- to report on ESG matters. Beginning in 2024, companies will have to report, if material, on…