ESG Regulations: Global Update March 2024
As ESG regulations rapidly develop, FTI Consulting is providing a quick summary of need to know updates across the globe.
Climate Disclosure
Due Diligence
Forced Labor
As ESG regulations rapidly develop, FTI Consulting is providing a quick summary of need-to-know updates from around the globe. This month we cover the United States’ final climate disclosure rules, movement on corporate sustainability due diligence and forced labor legislation in the EU, as well as ISSB-based climate reporting standards in Singapore and Canada.
1. Securities Exchange Commission (SEC) Adopts Climate-Related Disclosure Rules for Investors
What do I need to know?
- The SEC has officially adopted rules aimed at providing comparable and reliable disclosures on the financial impacts of climate change on public companies and how the companies manage those risks.
- Now, public companies are mandated to disclose costs incurred due to severe weather events, renewable energy credits, and the impact of climate-related factors on financial estimates and assumptions.
- Large accelerated filers and accelerated filers will be required to disclose material Scope 1 and 2 emissions, as well as assurance reports.
What’s next:
- The rules will come into effect 60 days after the adopting release is published in the Federal Register.
- The compliance dates will be phased in for registrants, with the date determined by the registrant’s filer status.
2. EU vote on Corporate Sustainability Due Diligence Directive (CSDDD)
What do I need to know?
- The CSDDD has received supporting votes from both the EU Committee of Permanent Representatives European Parliament’s Legal Affairs Committee after significant debate over the past few weeks.
- In the final Directive, the employee threshold rose from 500 to 1000 and the turnover threshold from €150 million to €450 million, meaning that the law will impact a third of the companies that it initially covered.
What’s next?
- The European Parliament plenary vote on the preliminary agreement is set to take place in Strasbourg on April 24, 2024.
3. Provisional Agreement from EU Parliament and Council on Forced Labor
What do I need to know?
- The European Parliament and Council came to a provisional agreement on rules that would prohibit products made with forced labor from the EU market, as well as establish a framework for enforcement, investigation, and cooperation across countries.
- If a product is suspected of using forced labor, goods will be held until the investigation is complete, only to be allowed back once forced labor is removed from the supply chain.
What’s next?
- Once the law is published in the Official Journal, it will come into effect the following day. From there, EU countries will have 3 years to start implementing the rules.
4. Singapore mandates Climate Reporting
What do I need to know?
- The Parliament of Singapore announced the phasing in of mandatory climate-related reporting requirements in line with the International Sustainability Standards Board (ISSB), which will eventually require listed and large non-listed companies to disclose Scope 1, 2 and 3 emissions.
What’s next?
- The new reporting rules will be phased into implementation, starting with listed companies, in 2025. In 2027, the rules will extend to non-listed companies with at least $1 billion in revenue and $500 million in assets.
5. Canada proposes standards for Climate Reporting
What do I need to know?
- The Canadian Sustainability Standards Board (CSSB) proposed new standards for companies to report sustainability and climate-related information, aligning ISSB standards with some ‘Canada-specific modifications’.
What’s next?
- The CSSB is now conducting a consultation for the proposed standards, and the Canadian Securities Administrators have said they would consider mandating the final CSSB standards.
Contact us: For further information on how your business can better navigate emerging ESG regulations, please contact Ben Herskowitz, Senior Managing Director, U.S. at [email protected]
The views expressed in this article are those of the author(s) and not necessarily the views of FTI Consulting, its management, its subsidiaries, its affiliates, or its other professionals.
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