Key news in this edition:
- US President Joe Biden signs new act that includes commitments to investing in clean energy;
- Financial regulator in Mongolia publishes guidance on sustainability reporting;
- UK’s Financial Conduct Authority (‘FCA’) seeks ESG experts for new committee.
JAPAN
Japanese Ministry of Economy, Trade and Industry publishes new draft guidelines to tackle human rights abuses
On 8 August 2022, the Japanese Ministry of Economy, Trade and Industry released its draft “Guidelines on Respect for Human Rights in Responsible Supply Chains”. The guidelines seek to incentivise businesses to design plans and policies for identifying, resolving and preventing possible human rights violations not only in their workplace, but also within their suppliers, clients, joint ventures and investment portfolios. The final version of the guidelines is expected to be released later this month.
india
Indian Lower House Passes an Amendment Bill to the Energy Conservation Act, 2001
On 8 August 2022, Lok Sabha, the lower house of India's bicameral Parliament, passed the Energy Conservation (Amendment) Bill, 2022, an amendment to the 2001 Indian Energy Conservation Act. The 2022 amendment contains additional regulations relating to the obligation of designated consumers to use non-fossil fuel sources of energy, and introduces a carbon credit trading scheme.
MONGOLIA
Financial Regulatory Commission of Mongolia publishes new guidance on sustainability reporting
On 10 August 2022, the Financial Regulatory Commission of Mongolia (‘FRC’) published new guidance on ESG and sustainability reporting for companies currently, or soon-to-be, listed on the Mongolian Stock Exchange (‘MSE’). The new guidance was developed in partnership with multiple Mongolian financial regulators and international organisations, including the MSE, the United Nations Development Programme, and the Mongolian Sustainable Finance Association, a membership-based non-governmental organisation focusing on sustainability in the finance sector. The guidance lists 30 ESG indicators that the FRC encourages companies to disclose in reporting, including data on waste, greenhouse gas emissions, supply chain management, community engagement, and compliance. It also highlights the importance of maintaining, and reporting on, senior management’s commitment to sustainability.
Us
US President Joe Biden signs the Inflation Reduction Act
On 16 August 2022, US President Joe Biden signed the Inflation Reduction Act, which the US Congress passed on 12 August 2022. Alongside implementing measures to combat inflation and reduce prescription drug prices, the act outlines the US administration’s commitment to investing in clean energy manufacturing. The Act further outlines a series of incentives, to encourage individuals to purchase and use clean energy sources. For example, the Act includes consumer tax credits, which aim to reduce prices on clean energy and energy efficient sources, such as heat pump water heaters. Furthermore, it outlines grants and tax credits for clean commercial vehicles and fuels, with the aim of reducing emissions from the transportation sector.
Uk
FCA calls for external experts to join new ESG Advisory Committee
On 23 August 2022, the Financial Conduct Authority (‘FCA’) announced that it was searching for external experts, who have experience in ESG issues in the financial sector, to join a new ESG Advisory Committee. The Committee will provide advice to the FCA’s board on relevant emerging ESG issues or topics, and provide insight into how the FCA should shape its ESG strategy. Additionally, committee members will advise on the type and manner of oversight needed on ESG issues, in relation to both the FCA’s own operations and in its role as a regulator. Successful applicants will be appointed to the Committee by the regulator’s board, and the first Committee meeting is expected to occur in the fourth quarter of the 2022 financial year.
THAILAND
The Bank of Thailand and the Thai Bankers’ Association (‘TBA’) release joint statement on the TBA’s ESG Declaration
On 29 August 2022, the Bank of Thailand (‘BOT’) and the Thai Bankers’ Association (‘TBA’) released a joint statement to announce the TBA’s ESG Declaration; a roadmap for Thailand’s banking industry to adopt the United Nations Principles for Responsible Banking. The TBA’s ESG Declaration outlines six action priorities for Thailand’s banking sector to focus on, in order to achieve its commitment to the Paris Agreement and the United Nations Sustainable Development Goals. These priorities revolve around encouraging businesses to consider ESG factors in governance, strategy, risk management, financial products, communication and disclosure.
