RESOLVING ESG-RELATED DISPUTES
CD: To what extent has the focus of governments, regulators, investors and other stakeholders shifted toward greater corporate transparency and responsibility on environmental, social and governance (ESG) matters?
Bryden: Corporate transparency and reporting obligations have been one of the dominant UK and European Union (EU) regulatory trends over the last 10 years. The arguments for increased transparency have merit. Not only does this wider information on a corporate’s performance and risk profile allow investors, customers and other stakeholders to make informed decisions, it also promotes change and improvement – you cannot manage something you cannot measure. A wave of corporate regulation started with niche areas of reporting, such as energy efficiency and payment practices. In the last couple of years this has mushroomed into a staggeringly wide range of mandatory non-financial and environmental, social and governance (ESG) reporting obligations. These regulatory developments in part reflect and formalise longer standing stakeholder pressures around voluntary reporting and ESG accountability. The EU is very much at the forefront of mandatory reporting obligations as they lie at the heart of its Green Deal, which seeks to redeploy capital into more sustainable investments and businesses. Of particular note are the EU’s Sustainable Finance Disclosure Regulation (SFDR), Corporate Sustainability Reporting Directive (CSRD) and taxonomy regimes.
Oct-Dec 2023 issue
Travers Smith LLP