The Weekly Pulse: 30 September - 04 October, 2024
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Hot off the Press: Final Australian Sustainability Reporting Standards AASB S1 and AASB S2 Now Available on the AASB Digital Standards Portal
Today?[October 2nd, 2024], the Australian Accounting Standards Board announced that the final Australian Sustainability Reporting Standards have been made?available on the AASB?Digital Standards Portal.?
The Australian Sustainability Reporting Standards essentially comprise:
These standards were approved by the Board on 20 September 2024.
As discussed in our previous update issued on 23 September 2024, ASSB S2 is currently the only mandatory sustainability reporting standard under the Corporation Act. In line with IFRS S2, AASB S2 requires an entity to disclose information about climate-related risks and opportunities that could reasonably be expected to affect its cash flows, its access to finance, or its cost of capital over the short, medium, or long term. The standard follows the same structure as IFRS S2 regarding core content (i.e. Governance, Strategy, Risk management, Metrics, and targets).
The Board encourages entities that are required?to apply AASB?S2 under?the Corporations Act to?refer to the?Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024 for more details about the revised provisions of the Act requiring the preparation of an annual sustainability report.
For more information on the types of?entities required to prepare a sustainability report (including a climate statement) under the Corporations?Act,?please consult?our previous updates in C2P [including: "The Australian Senate Approves Landmark Climate Disclosure Bill"?and "The Australian Government Unveils Draft Legislation on Mandatory Climate-related Disclosures"]
Unlike AASB S2, AASB S1 is a voluntary standard. Entities electing to apply this standard would similarly need to disclose information about all sustainability-related risks and opportunities that could reasonably be expected to affect their cash flows, access to finance or cost of capital over the short, medium or long term. Note that the voluntary nature of this standard does not preclude an entity that is required to comply with AASB S2 to also apply AASB S1.?
Both standards?will come into effect from?1 January 2025.?
ASB S1 is available?here.?
AASB S2 is available?here
Unfortunately, AASB S1 and AASB S2 cannot currently be shared in C2P for copyright reasons. C&R has contacted the Australian Accounting Standards Board to request permission to share these standards in C2P. A copy of the standards will be made available in our database once the authorization is granted by the Board.?
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领英推荐
California Governor signs legislation tweaking requirements of climate disclosure laws
By Cooley LLP
California Governor Gavin Newsom has signed?into law?Senate Bill 219, a bill that tweaks some of the requirements of California’s climate disclosure bills,?SB 253, the?Climate Corporate Data Accountability Act,?and?SB 261,?Greenhouse gases: climate-related financial risk. ?You may recall that when Newsom signed those two bills into law in 2023, he questioned whether the implementation deadlines in the bills were actually feasible. (See?this PubCo post.) So even as the bills were being signed, it looked like they might need a revamp in the near future. ? In July this year, Newsom proposed, along with several other changes, a delay in the compliance dates for each bill until 2028.?(See?this PubCo post.) However, one of the bill’s key sponsors opposed the administration’s proposal, telling?Politico?that the proposal didn’t reflect an agreement with lawmakers: the ”administration really wants additional delays for the disclosures. And we don’t agree on that.” Apparently, Newsom’s proposal did not go anywhere.?Then, at the end of August, the California Legislature passed SB 219, introduced by two sponsors of SB 253 and SB 261, which sought to meet the Governor part-way. Compared to the changes that the Governor had proposed, the bill may strike some as fairly anemic: while the bill gives the California Air Resources Board, which was charged with writing new implementing regulations, a six-month reprieve in the due date, for reporting entities, there is no compliance delay in commencement of reporting—it’s a big goose egg. Nevertheless, on September 27, the Governor?signed?the bill. With the SEC’s climate disclosure rules on hold while challenges to those rules are litigated, as this article in the?WSJ suggests, these California climate disclosure laws may well be the first—and perhaps the only—game in town, making California a “de facto national climate accounting regulator.” Unless, of course, legal challenges interfere with the application of these California laws also (see below)….
As you may know, SB 253 mandates disclosure of GHG emissions data—Scopes 1, 2, and 3—by all U.S. business entities (public?or private) with total annual revenues in excess of a billion dollars that “do business in California.”?SB 253 has been estimated to apply to about 5,300 companies. Currently, SB 253 requires disclosure regarding Scopes 1 and 2 GHG emissions beginning in 2026 (on a date to be determined by the state board), with Scope 3 (upstream and downstream emissions in a company’s value chain) disclosure in 2027. SB 261, with a lower reporting threshold of total annual revenues in excess of $500 million, requires subject companies to prepare reports disclosing their climate-related financial risk in accordance with the TCFD framework and describing their measures adopted to reduce and adapt to that risk. SB 261 has been estimated to apply to over 10,000 companies. Currently, SB 261 requires that preparation and public posting on the company’s own website commence on or before?January 1, 2026, and continue biennially thereafter. Also included is a requirement for the state board to contract with a climate reporting organization to prepare a biennial public report on climate-related financial risk disclosures and other actions. Notably, the laws exceed the requirements of the SEC’s climate disclosure regulations because, among other things, one of the laws covers Scope 3 emissions, and they both apply to both public?and private?companies that meet the applicable size tests. (For more information about these two laws, see?this PubCo post.)
According to the?WSJ, over “a third of finance, sustainability, and risk professionals expressed concern that data including Scope 3 will be hard to collect, according to a survey of about 2,000 released Wednesday by?Workiva, a reporting software platform. In general, only about 29% of companies are ready to subject their ESG data to an ‘assurance’ process, advisory firm KPMG found in a survey of 1,000 large-company executives released in June.” In addition, the?WSJ?reports, “U.S. reporting lags behind other countries. Right now, only 29% of U.S.-listed firms report Scope 3 data, compared with 54% in developed markets outside the U.S., according to research released in February by the MSCI Sustainability Institute.” Of course, the EU has its own climate disclosure rules, which can capture U.S. companies with EU revenue in excess of specified thresholds. (See this?Cooley Alert.)
As noted above, even on signing the bills, Newsom?made clear that, in his view, the implementation deadlines for these bills just didn’t work. Instead,?in July, his administration proposed amendments to Sections 38532 (formerly SB 253) and 38533 (formerly SB 261) of the Health and Safety Code, which appeared in “budget trailer bill language” released by the Department of Finance.? With regard to SB 253, Newsom’s proposal would have required CARB to develop and adopt those regulations on or before January 1, 2027, rather than 2025, and delayed for two years the initial compliance dates for reporting entities, along with conforming changes. In addition, the proposal would have “require[d] that the regulations adopted by the state board require, among other things, a reporting entity to make the annual disclosure to either the emissions reporting organization or the state board, and that the reporting entity publicly disclose its scope 3 emissions on a schedule specified by the state board,” rather than, as is currently required, no later than 180 days after its scope 1 emissions and scope 2 emissions are publicly disclosed. The bill would also have “authorize[d] reports to be consolidated at the parent company level and…delete[d] the requirement that the annual fee be paid upon filing the disclosure. The bill would [have] authorize[d], rather than require[d], the state board to contract with an emissions reporting organization to develop a reporting program to receive and make certain required disclosures publicly available. The bill would [have made] other related changes to the duties of the emissions reporting organization and the state board, as provided.”
With regard to SB 261, Newsom’s proposal would have delayed until January 1, 2028, the date for the initial climate-related financial risk report, and made conforming changes. In addition, it would have authorized, rather than required, the state board to contract with a climate reporting organization to carry out the various mandated actions “that the state board deems appropriate. The bill would also [have] delete[d] the requirement that the entity’s fee be paid upon filing its disclosure.” (See?this PubCo post.)
SB 219, which was passed by the California Legislature on August 31 and signed into law by the Governor on September 27, will, among other things, delay some of the compliance dates in Section 38532 (SB 253). The bill provides some reprieve to CARB in the timing of the requirement to adopt regulations, but practically zilch for reporting entities.? More specifically, the bill delays from January 1, 2025, to July 1, 2025, the requirement that CARB adopt regulations to require a reporting entity to disclose annually its scope 1, 2, and 3 emissions and to obtain assurance from an independent third-party assurance provider.? However, the bill does not delay the initial compliance dates for reporting entities; reporting of scopes 1 and 2 will still begin in 2026 on a date determined by CARB. (In effect, because the regulations could be delayed by six months, reporting entities might actually have less time to initially comply with them.) By comparison, Newsom’s proposal would have delayed the initial compliance dates for reporting entities by two years.? For scope 3 emissions, a reporting entity will still be required to disclose its scope 3 emissions beginning in 2027, but on a schedule specified by the state board, rather than no later than 180 days after its scope 1 emissions and scope 2 emissions are publicly disclosed as was previously required. ?(So perhaps there might be some compliance delay permitted there.) In addition, consistent with the Newsom proposal, the SB 219 will (1) authorize reports to be consolidated at the parent company level; (2) delete the requirement that the annual fee be paid upon filing the disclosure; (3) provide that the regulations adopted by the state board must require, among other things, a reporting entity to make the annual disclosure to either the emissions reporting organization or the state board; and (4) authorize, rather than require, the state board to contract with emissions reporting organization to develop a reporting program to receive and make certain required disclosures publicly available. The bill will make other related changes to the duties of the emissions reporting organization and the state board, as provided.
The bill makes only a few changes to Section 38533 (SB 261).? More specifically, as described in the Legislative Counsel’s Digest, the bill authorizes, rather than requires, the state board to contract with a climate reporting organization to carry out any of the specified actions, such as preparing biennially a public report on climate-related financial risk disclosures or monitoring federal regulatory actions, that the state board deems appropriate. The bill also deletes the requirement that a reporting entity’s fee be paid upon filing its disclosure.? Once again, the bill does not change the timing for compliance with reporting requirements for reporting entities.
And don’t forget that all of these requirements could be complicated by pending litigation. Earlier this year, the U.S. and California Chambers of Commerce, the American Farm Bureau Federation, and others filed a?complaint?against CARB (later?adding the California Attorney General) challenging the two California climate disclosure laws. The lawsuit seeks declaratory relief that the two laws are void because they violate the First Amendment, are precluded by federal law, and are invalid under the Constitution’s limitations on extraterritorial regulation, particularly under the dormant Commerce Clause. The litigation also seeks injunctive relief to prevent CARB from taking any action to enforce these two laws.?For more on this litigation, check out the SideBar in?this PubCo post.
What are our clients asking about?
"What are the Extended Producer obligations for B2B packaging in France?"
Answered by Conor O'Donoghue
Article L541-10-1 of the French Environmental Code, introduced by the AGEC law, states that the EPR requirements shall apply to all packaging used to market products consumed or used by professionals (B2B packaging) from January 1, 2025 (except for professionals in the catering industry which were covered since 1st January 2023). You may find this Article here:?https://www.legifrance.gouv.fr/codes/article_lc/LEGIARTI000049464324
You may also find additional Articles in the Environmental Code relating to EPR here: https://www.legifrance.gouv.fr/codes/section_lc/LEGITEXT000006074220/LEGISCTA000006176616/#LEGISCTA000023268652?
A new draft Order was also published in July 2024 which proposes EPR reporting obligations for B2B packaging.
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