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Clifford Chance

Clifford Chance


Talking Tech

Sustainability: recent ESG developments

February 2023

15 February 2023

Environmental, Social and Governance ("ESG") factors have fast risen to the top of the board agenda across all sectors, with increasing awareness that a failure to address these matters can be detrimental both financially and reputationally. Investor pressure, internal governance and the proliferation of regulatory requirements and voluntary standards across the globe makes this a complex area to manage.

This newsletter is intended to assist banks, financial investors and corporates in keeping up to date with ESG developments.

Further details of these and previous developments can also be found on our Green and Sustainable Finance Topic Guide on the Clifford Chance Financial Markets Toolkit and further related resources can be found on our Clifford Chance ESG page.



European Union

(26 January 2023) The ESAs submitted their opinions on EFRAG's draft European Sustainability Reporting Standards (ESRS Set 1). The draft ESRS Set 1 was developed and submitted to the European Commission in November 2022. | EBA press release | EBA Opinion | EIOPA press release | EIOPA Opinion | ESMA press release | ESMA Opinion

(23 January 2023) The European Securities and Markets Authority held an open hearing for its consultation paper on ESG or sustainability-related terms in funds’ names on 23 January 2023. The consultation period ends on 20 February 2023. The hearing addressed the rationale for the initiative and discussed various aspects, including the proposed threshold mechanism for the proportion of investments for funds' names using ESG or sustainability-related terms.


(31 January 2023) The Financial Services and Markets Authority published a Communication (in French) on the entry into force of Commission Delegated Regulation (EU) 2022/1288 of 6 April 2022 supplementing the SFDR with regulatory technical standards. The Communication takes the form of Q&As and covers, for example, the content and presentation of the information relating to the promotion of environmental or social characteristics and objectives for sustainable investments in precontractual documents, on websites and in periodic reports.

(15 December 2022) The Federal Parliament of Belgium published an Act (in French, in Dutch) which requires that companies of a certain size will have to set up internal reporting channels and persons who use these channels to report a range of violations of certain EU and national matters, will be protected against retaliation. The scope of the legislation is broader than the minimum standards imposed by the EU Whistleblowing Directive and will come into effect from 15 February 2023.


(19 January 2022) With effect from 1 March 2023, companies with a minimum of 1,000 employees must publish on their website and transmit to the Labour inspectorate the gender representation gap among senior executives and on their governing bodies.

United Kingdom

(12 January 2023) Various organisations responded to the FCA consultation on Sustainability Disclosure Requirements and investment labels. The consultation closed for comments on 25 January 2023. | AFME response | AIMA ACC response (Members only) | BVCA response | FCA Practitioner PanelICGN response | ICMA response | Investment Association | ISDA response | ISLA response | Managed Funds responsePRI response | PIMFA response | Treasury Select Committee response and Letter | UK Finance response |  UK Shareholders' Association/ShareSoc response



(31 January 2023) The OECD published a report, Improving the Landscape for Sustainable Infrastructure Financing, examining how to promote sustainable infrastructure investment along with the data needs required for investors to be sufficiently equipped to make investment decisions.

(17 January 2023) The World Economic Forum announced a new initiative, Giving to Amplify Earth Action (GAEA) to fund and grow new and existing public, private and philanthropic partnerships to reach the $3trn annual financing needed to reach net zero, reverse biodiversity loss and restore biodiversity by 2050.

(13 January 2023) The OECD opened a public consultation on a draft update to the OECD Guidelines for Multinational Enterprises and their Implementation Procedures. The Guidelines set out recommendations from governments to businesses for ensuring responsible business conduct in all areas where business interacts with society, including human rights, labour rights, environment, bribery, consumer interests, as well as disclosure, science and technology, competition, and taxation The update, which is being managed by the OECD Working Party on Responsible Business Conduct, is designed to advance the uptake and promotion of the Guidelines and to ensure that they remain fit for purpose.

(12 January 2023) The United Nations Global Compact and Accenture published a report on sustainability drawing on insights from more than 2,600 CEOs from 128 countries and 18 industries. The CEOs forewarn about the impact of converging setbacks for business and society, from faltering multilateralism and socioeconomic instability to supply-chain interruptions and the immediate effects of climate change. | Press release

European Union

(25 January 2023) The European Commission with the financial supervisor national authorities of Croatia, Malta, Poland, and Romania, launched a new Technical Support Instrument multi-country project, which will provide technical support on supervisory capacity enhancement in Sustainable Finance.

(20 January 2023) Frank Elderson, Member of the Executive Board of the European Central Bank, spoke at a virtual meeting hosted by the European Financial Services Round Table. His introductory remarks described the progress banks had made in managing climate-related and environmental risks in the financial sector. 

(19 January 2023) The European Securities and Markets Authority published the advice it received from its Securities and Markets Stakeholder Group advising the European Supervisory Authorities to formulate a clear definition of greenwashing (ESG-washing), and also noting that ‘green-bleaching’ is problematic—where financial market participants choose not to claim ESG features of their products in order to avoid extra regulation and potential legal risks. Progress reports on the ESA's finding are due in May 2023 and the final reports due in May 2024. Other organisations also responded to the ESA Call for Evidence on greenwashing. | AFME response | AIMA response (Members only)| Dutch Federation of Pension Funds response | EBF response | EFAMA response | ESBG response | ICMA response | Insurance EuropeISDA response | PRI response

(17 January 2023)  The European Commission President, Ursula von der Leyen, in a speech at the World Economic Forum, announced that a new Green Deal Industrial Plan aligned with the EU’s 2050 climate targets is in development. The Plan will cover changes to regulation and financing the transition seeking to enhance the competitiveness of Europe's net-zero industry and support the fast transition to climate neutrality.


(9 January 2023) Marie-Anne Barbat-Layani, Chair of the Autorité des marches financiers (AMF) presented the AMF’s action and supervisory priorities for 2023 including the improvement of the regulatory framework for sustainable finance, continuing the fight against greenwashing, regulating the promotion of social networks and accelerating the mandatory authorisation for non-registered digital asset service providers.

Hong Kong

(12 January 2023) The Hong Kong Monetary Authority (HKMA) issued a circular on Basel Committee on Banking Supervision responses to a number of frequently asked questions. The HKMA intend to incorporate the responses into its supervisory framework and expect authorised institutions to take note of them when considering how to incorporate climate-related financial risks in their interpretation and application of the existing Basel framework.


(22 December 2022) The Banca d'Italia published a paper 'ESG disclosure: regulatory framework and challenges for Italian banks' highlighting how the disclosure of relevant climate information plays a key role for both financial and non-financial stakeholders.


(24 January 2023) The Luxembourg insurance sector supervisory authority, the Commissariat aux Assurances issued an Information Note (23/2) (in French) on the implementation of climate change risk scenarios in their Own Risk and Solvency Assessment (ORSA).


(24 January 2023) The Swiss Financial Market Supervisory Authority published new guidance which draws attention to relevant developments in the area of climate-related financial risk management and reiterates that supervised institutions establish an adequate framework for managing climate risks that is adapted to the respective risk profile of the institution.


(10 January 2023) The Securities and Exchange Commission, Thailand launched Guidelines on Management and Disclosure of Climate-related Risk by Asset Managers to assist institutional investors with managing their investments responsibly when taking into consideration climate-related risks and opportunities.

United Kingdom

(30 January 2023) The Financial Reporting Council published an updated ESG Statement of Intent: What's Next, summarising the initiatives that they have undertaken internationally and in the UK since 2021 to support its stakeholders in comparable ESG reporting and disclosure.

(19 January 2023) The Bank Underground, a blog published by the Bank of England, shared their views on the prices of ESG assets and the extent they are driven by the sentiment of market participants, as opposed to economic fundamentals.

(13 January 2023) The Department for Business, Energy & Industrial Strategy published the final report, Mission Zero: Independent Review of Net-Zero. The report makes 129 recommendations and states that more advantage should be taken of the benefits of a green economy e.g. developing sustainable government financing structures. Investors and industry experts in different fields were consulted and a public call for evidence received over 1800 responses. | Press release

United States of America

(19 January 2023) The Biden-⁠Harris Administration released a national strategy to put nature on the nation’s balance sheet. The National Strategy to Develop Statistics for Environmental-Economic Decisions is a multi-year effort to understand nature’s critical contributions to the U.S. economy and to guide policy and business decisions moving forward.



(23 January 2023) AFME, EPIF, FIA and ISDA have published a briefing note entitled 'Corporate Sustainability Due Diligence: An effective approach for financial institutions' which highlights the serious challenges that would be faced by financial institutions if CS3D obligations are applied beyond their upstream supply chain to their relationships with corporate clients or trading counterparties in their downstream value chain,  and extended to downstream financial services. 

(18 January 2023) The Principles of Responsible Investment released its second report, 'The thematic ESG approach in US municipal bonds'. This report frames key issues when investors use municipal bonds to finance projects tied to specific environmental or social outcomes.

(17-19 January 2023) The International Sustainability Standards Board published meeting papers setting out a series of guidance and reliefs including the proposed requirements for the disclosure of information about climate resilience, climate-related metrics (Scope 1 and Scope 2 GHG emissions) and climate-related targets.

(10 January 2023) The Principles of Responsible Investment issued a statement supporting the progress by the IFRS Foundation and IOSCO to develop a globally shared baseline for reporting on sustainability-related financial information and will continue to engage with the ISSB on their work for capacity building which was announced at COP27.

(9 January 2023) The Inevitable Policy Response, a consortium commissioned by the Principles for Responsible Investment, launched an integrated nature and climate scenario, FPS + Nature, for use by investors to help respond to the climate and nature emergency.

European Union

(9 November 2022) The Financial Data Exchange Templates (FinDatEx) published the European ESG Template (EET) Version 1.1.1 to reflect the upcoming publication in the Official Journal of the EU of the Delegated Regulation amending the Sustainable Finance Disclosure Regulation regulatory technical standards. EET V1.1.1 will co-exist with V1.0 and V1.1 until 30 April 2023 after which only EET V1.1.1 is expected to be used. | Press release


(10 January 2023) The International Capital Markets Association and the China Central Depository & Clearing Co Ltd published a white paper on ESG practices in China, detailing ESG development trends in the region with relevant case studies.

Hong Kong

(10 January 2023) The Hong Kong Exchanges and Clearing Limited published a research report on the growth of global carbon markets and opportunities for Hong Kong and discusses the potential role for Hong Kong in China's carbon market through the provision of a well-developed platform in line with international practices for carbon spot and derivatives trading.

United Kingdom

(16 January 2023) The Chancery Lane Project (TCLP) published a climate-linked contractual discretions clause to add to their suite of climate clauses along with guidance on how to use. | Press release.



(19 January 2023) Initiative Lieferkettengesetz, an alliance of 130 development, environmental, human rights and trade union organisations, published an open letter to MEP Axel Voss with proposed revisions to the Corporate Sustainability Due Diligence (CS3D). The letter argues that the CS3D should apply to a corporate entity's entire value chain, that the CS3D should function in a pre-emptive manner by preventing human rights-, environmental- and climate-related harms before they occur and that it should provide those impacted by such harms to claim compensation in EU civil courts.  

(18 January 2023) The Science Based Targets initiative launched new reporting guidance to support investors in identifying the overlaps and complementary nature of the SBTi Financial Institutions framework and the Task Force on Climate-related Financial Disclosures recommendations. | Press release

(18 January 2023) The Observatory Against Greenwashing, a coalition of environmental and consumer groups, launched an alternative to the European Commission's taxonomy list which came into force on 1 January 2023. The 'science based taxonomy' provides 'rigorous criteria', which financial institutions can use to properly assess what is green and what is not, duplicating the Commission's criteria where it is robust and departing from them when they are scientifically weak or unevidenced. 

(16 January 2023) The World Wildlife Fund launched a free biodiversity risk tool to help companies and investors understand the risks they face from biodiversity loss. | Press release

(19 December 2022) The Climate Bonds Initiative published 'Scaling Credible Transition Finance – ASEAN The Transition Plan' outlining that companies in the ASEAN market should publish clear transition plans and concluding with recommendations in the form of a checklist to help entitles to define robust plans for reaching net zero.

(9 December 2022) The World Business Council for Sustainable Development published Roadmaps to Nature Positive Guidelines to accelerate business accountability, ambition and action for a nature-positive future. The business guidance and checklist of actions is to assist in aligning strategies with the shared goal of a nature-positive planet by 2030.

United States of America

(10 January 2023) Majority Action published 'Fulfilling the Promise 2023: How Climate Action 100+ Investor-Signatories Can Mitigate Systemic Climate Risk' analysing that while some Climate Action 100+ (CA 100+) investor-signatories demonstrated new levels of proxy voting leadership, the majority of investor-signatories analysed failed to use their voting power to hold companies to the standards for decarbonization targets, performance, and governance set by Climate Action 100+ Net Zero Company Benchmark.