In recent years, the notion of sustainability, Corporate Social Responsibility (CSR) and ESG (Environmental, Social and Governance) have received increased attention in the business communities and society as a whole.
Corporate Social Responsibility (CSR) refers to expectations for businesses to assume responsibility for their impact on people, the environment and the communities and societies in which they operate. Environmental, Social and Governance (ESG) refers to the three pillars in measuring sustainability and societal impact, and is a term often used by investors to evaluate corporate behaviour and to screen potential investments based on criteria beyond the direct economic return on investments.
Given the importance, attention to and rapid development of CSR and ESG, the applicable regulations take several different forms. On the international level there are overarching conventions on sustainability (such as the Paris Agreement), as well as more detailed conventions with direct effects for businesses operating convention states. Individual states regularly also impose new legislation concerning business responsibilities towards the environment and our society.
Within the business community as such there is also an ongoing trend for investors, banks / financiers and companies to include voluntary frameworks for responsible business practice as part of their operations – and to also incorporate such frameworks as contractual requirements towards their counterparties. All these regulations includes various requirements for companies to consider and report on issues material to their business and stakeholders and take other measures in support of sustainability.
Wikborg Rein regularly advice our clients on legal aspects and new regulations related to sustainability and this is a strategic focus for us going forwards. If you would like our assistance, please contact our legal experts. We are happy to help you.
The European Green Deal (EGD)
Within the European Union the introduction of the European Green Deal is an important framework for sustainability work within the union.
The European Green Deal (EGD) was presented by the European Commission in December 2019 as EU's growth strategy to transform the EU into a modern, resource-efficient and competitive economy where there are no net emissions of greenhouse gasses by 2050, economic growth is decoupled from resource use and no person or place is left behind (just transition).
The EGD sets out ambitions within several areas with the aim to decarbonise the energy sector, develop clean transport, transition to a resource efficient industry and circular economy, restore biodiversity and develop a fair, healthy and environmentally friendly food system.
The EGD is a political tool setting out ambitions for each country's reduction in carbon emission, but it also sets out a number of policy areas where new legislation is adopted or under development, in order to reach such ambitions.
The EGD will have material effect also on Norwegian economy. The EU is Norway's most important trade partner, Norway takes part in the EU Emissions Trading System, and Norway has similar ambitions for reduction in carbon emissions through the Paris agreement. Further, most of the legislation proposed by the EU under the EGD will also be implemented in Norway through the EEA agreement.
EU’s strategy will strengthen the foundations for sustainable investment. Increased opportunities will be provided for investors and companies by making it easier for them to identify sustainable investments and ensuring that they are credible, such as the EU taxonomy.
The shipping industry is a major source of greenhouse gas emissions in Europe. The European Commission has announced that it will aim to extend the EU's Emission Trading System (EU ETS) to the shipping sector, but there is an ongoing debate about this approach and how it aligns with the measures implemented by the International Maritime Organisation in the short and medium term.
Today, the production and use of energy account for more than 75% of EU’s greenhouse gas emissions. Relevant energy legislation will be reviewed and where necessary revised by June 2021.
Building and renovating
The construction, use and renovation of buildings require significant amounts of energy and resources. Strict enforcement of rules on energy performance as well as climate-proofing buildings are some of the measures suggested under the Green Deal.
Growing scientific evidence indicates that further action is needed to tackle ocean challenges including climate change and the rapid loss of marine biodiversity. A consultation is ongoing in the EU to examine its role, priorities and policy areas for EU's contribution towards healthy, clean, secure, safe and sustainably managed oceans.