ESG

Contact: Kelly Thomson

ESG

PRA outlines climate adaptation strategy in new report

The Prudential Regulation Authority (PRA) has submitted a climate change adaptation report to the Department for Environment, Food & Rural Affairs (DEFRA) as part of the UK Government’s climate adaptation policy, addressing the risks climate change poses to its operations and objectives. Since becoming the first prudential regulator to publish comprehensive supervisory expectations in 2019, the PRA has undertaken several initiatives, including a Climate Biennial Exploratory Scenario exercise in 2021. The PRA highlights the need for banks and insurers to manage climate-related risks, aligning with the Bank of England’s broader climate strategy. The PRA plans to update the public with a consultation paper in 2025 and will continue working to enhance the UK financial sector's resilience to systemic climate risks.

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RPC contribute to new Transparency International report on ESG governance

RPC have contributed to landmark new research published by Transparency International UK's Business Integrity Programme, 'ESG Governance and Risk Management – Coordinating Anti-Corruption and Sustainability in Practice'. The guidance draws on the insights of 46 ethics & compliance, legal, financial crime, risk and sustainability practitioners to understand how companies can leverage existing anti-corruption expertise and processes to help comply with new and emerging sustainability legislation.

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Government unveils consultation on a new Land Use framework

The government has launched a national consultation on a new approach to land use in England, aiming to protect productive agricultural land and enhance food security. The 12-week consultation process will involve workshops across the country, seeking input from farmers, landowners, businesses and nature groups to inform a Land Use Framework that will support key objectives, improving overall energy infrastructure and restoring nature. The framework will complement existing energy and housing spatial plans as this initiative aligns with the Government’s Plan for Change, aiming for economic growth while safeguarding the environment and food production. A final Land Use framework will be published later this year.

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AIM and large private company climate disclosures under FRC review

The Financial Reporting Council (FRC) has published a thematic review of Climate-related Financial Disclosures (CFD) by AIM and large private companies, following the first mandatory reporting cycle. Introduced for accounting periods starting on or after 6 April 2022, CFD requirements apply to companies with over 500 employees that are traded, banking, insurance, AIM companies, or large private companies with turnover exceeding £500m. The review found varying quality in disclosures, highlighting the need for more consistent, coherent, and concise reporting. The FRC's publication provides examples of good practice and aims to support companies in improving their climate-related disclosures as reporting practices mature.

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ESG

Deposit Return Scheme legislation comes into force in England and Northern Ireland

On 24 January 2025, the Deposit Scheme for Drinks Containers (England and Northern Ireland) Regulations 2025 came into force setting out the framework for a new Deposit Return Scheme (DRS) for single-use drinks containers in England and Northern Ireland. The regulations introduce obligations for producers and retailers of single-use drinks containers made of PET plastic, aluminium or steel between 150ml and 3 litres. Under the regulations, the DRS scheme is set to launch in October 2027.

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Green claims update

In our latest Green Claims update, we provide the latest legal and regulatory developments you need to know including:

The latest ASA rulings against Lloyds Bank, Scottish Power, eDreams and others for misleading green claims
CMA draft guidance on changes to UK consumer protection law
Latest updates on the EU's Green Claims Directive
Sector specific updates including for transport and consumer goods

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New EU packaging Regulation in force

On 11 February, the EU's landmark new Packaging and Packaging Waste Regulation (PPWR) came into force introducing new rules to reduce packaging waste and support the transition to a circular economy. The PPWR introduces wide-ranging new rules including restrictions on single-use plastic packaging, binding re-use targets for certain types of packaging, refill obligations for businesses in the takeaway sector, and requirements to minimise the use of unnecessary packaging. The regulation applies to businesses involved in the production, supply, use and disposal of packaging and packaging materials in the EU.

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New EU rules on food and textiles waste

On 18 February, the European Parliament and European Council reached agreement on targeted changes to the EU Waste Framework Directive to introduce: (1) mandatory food waste targets for Member States (10% in food processing and manufacturing and 30% per capita in retail, restaurants, food services and households by 2030); and (2) new rules requiring EU member states to set up EPR schemes for waste textiles (including used clothing and accessories, footwear, and certain home textiles) to cover the costs of their collection, sorting and recycling. These schemes would need to be set up within 2.5 years of the directive coming into force. The Council is now expected to formally adopt its position which can then be endorsed by the Parliament. It will then be published in the Official Journal and come into force 20 days later. The rules would kick in following a two-year transposition period.

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ESG

While DEI faces cutbacks in the US, FCA delivers a speech on culture and conduct

Despite moves in the US to scale back diversity, equity and inclusion (DEI) initiatives, a recent poll by Apella Advisors and Find Out Now reported that 53% of UK businesses agreed that it would be "bad" if this led to British companies reducing their own commitments (find out more here). Against this backdrop, on 4 February, Emily Shepperd, chief operating officer at the Financial Conduct Authority (FCA), delivered a speech on culture, conduct and DEI within the financial services sector.

The speech highlighted that culture drives conduct and decision-making and therefore continues to be a regulatory concern. Shepperd confirmed that the FCA is updating its rules and guidance on non-financial misconduct and is expected to set out more detail on its proposed next steps shortly. The FCA is also working alongside the Treasury and the Prudential Regulation Authority (PRA) on reviewing the Senior Managers and Certification Regime (SM&CR) and will publish a consultation paper in due course. In terms of diversity and inclusion more broadly, the FCA is considering, alongside the PRA, the next steps following their consultation on the topic.

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Taxing Matters: Nature's wealth: unlocking the power of natural capital with Daisy Darrell

In the latest episode of Taxing Matters, our host, Alexis Armitage is joined by Daisy Darrell, a Senior Associate in Birkett's Agricultural and Estates team to discuss all things natural capital. Join Alexis and Daisy as they explore:

opportunities that natural capital can create for landowners
examples of recent environmental enhancement and restoration projects
the environmental benefits of such projects
tax considerations for farmers and landowners
potential impacts of ESG on natural capital markets.

ESG

Leveraging ABC frameworks for ESG compliance

With ESG regulations evolving rapidly, businesses are facing increasing obligations, ranging from supply chain due diligence (CSDDD, EU Deforestation Regulation) to corporate reporting (CSRD, ISSB).

The Environmental, Social and Governance (ESG) regulatory landscape continues to develop at pace and businesses are increasingly required to navigate new and complex ESG regulatory obligations. These include new supply chain due diligence requirements, such as those under the EU's Deforestation Regulation, the Corporate Sustainability Due Diligence Directive (CSDDD), and new corporate reporting requirements under the EU's Corporate Sustainability Reporting Directive and ISSB disclosure standards. Although the EU Commission has recently proposed a new 'Omnibus Directive' aimed at streamlining obligations in the CSRD and CSDDD to reduce regulatory burdens for business, the outcome of those proposals and the final form of any changes are still unknown. The key message for businesses is therefore not to 'down tools' and to continue preparing to comply.

In our latest publication we consider eight steps to leverage a business's ABC framework to support wider ESG compliance, including:

reviewing and updating your governance structures
expanding the scope of your risk assessment
building ESG risks into existing policies
building out third party due diligence processes to incorporate ESG-specific metrics/ risks
investing in the right technology
developing your contractual safeguards
updating internal training and empowering employees to take ownership for ESG
building robust whistleblower hotlines and 'speak up' channels.

Visit the Health, safety and environmental section for environmental law updates, including:

EA Chief Regulator proposes overhaul of environmental regulations
New EPR packaging legislation comes into force in the UK
Recyclability assessment methodology for EPR guidance

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