Global ESG Reporting Regulations

Global regulators continue to release new reporting requirements around environmental, social, and governance (ESG) and sustainability factors. This web of evolving and overlapping requirements involves carbon emissions and sustainability efforts, climate-related financial risk, investment transparency, and human capital and workers’ rights—a daunting landscape for multinational companies to navigate.

Companies around the world turn to Morgan Lewis to assess their reporting-readiness under local, national, and international ESG and sustainability reporting requirements, with a focus on the key reporting frameworks under:

• US Securities and Exchange Commission (SEC)
• US Department of Labor (DOL)
• Task Force on Climate-related Financial Disclosures (TCFD)
• EU Corporate Sustainability Reporting Directive (CSRD)
• Sustainability Accounting Standards Board (SASB)
• Global Reporting Initiative Standards (GRI Standards)
• European Sustainability Reporting Standards (ESRS)
• International Sustainability Standards Board (ISSB)
• EU Sustainable Finance Disclosure Regulation (SFDR)
• Abu Dhabi Global Market (ADGM)
• Securities and Exchange Board of India (SEBI)
• China’s Guidelines for Establishing the Green Financial System
• Hong Kong’s Green and Sustainable Finance Cross-Agency Steering Group
• Japan’s Financial Services Agency

HOW WE CAN HELP

• United States. On a state level, legislators and state attorneys general continue to develop new regulations around investments that consider ESG factors, climate change initiatives and disclosures, and policies related to diversity, equity, and inclusion (DEI)—which is magnified at the federal level. We advise public companies bracing to drastically increase their emissions reporting under proposed new disclosure rules, asset managers on the updated Names Rule amendments related to ESG and sustainability, and a wide range of companies on human capital disclosures under a politically charged diversity landscape.
• Europe. We counsel international corporations on the general landscape of EU and UK ESG regulations (in force and proposed) and help them understand and prepare for those laws. Following EU legislative acts directed at the financial sector including the EU’s SFDR—on which we counsel asset managers in particular—the most recent wave of sustainability legislative efforts was aimed at corporates. We can assist large corporates—whether Europe-based or active in Europe—that under CSRD will have to report on sustainability matters in line with ESRS. We also can help multinational corporations in the EU that may become subject to corporate sustainability due diligence obligations, anti-greenwashing regulations, and industry-specific sustainability laws. In the UK we counsel corporates and financial services firms on UK climate-related, energy and carbon reporting, and other sustainability-related requirements.
• Middle East. The Middle East, led by the UAE, has implemented sustainability-related regulations that aim to accelerate the growth of a sustainable finance ecosystem and channel capital into activities that advance the region’s greenhouse gas emission reduction goals. We guide companies in determining if they meet the mandatory ESG disclosure requirements and how to include that information in their annual accounts.
• Asia. The regulatory landscape across Asian nations is taking shape as Japan, Singapore, India, China, and Hong Kong have all released some form of standards for ESG-related investments, new reporting requirements, and greenwashing. We advise companies on the changing reporting structure as this important region sharpens its focus on ESG-related reporting.