Regulation (EU) 2020/852 of the European Parliament and of the Council OJ 2020 L 198/13.
Regulation (EU) 2019/2088 of the European Parliament and of the Council OJ 2019 L 317/1.
We use the expression EU sustainable finance legal framework to refer to the legislative and regulatory initiatives adopted by the EU Institutions to favor the transition of both the economy and society towards sustainability.
For an overview see Danny Busch, Guido Ferrarini and Seraina Gr 1/4newald, Sustainable Finance in Europe: Corporate Governance, Financial Stability and Financial Markets, EBI Studies in Banking and Capital Markets Law, 1st ed. (Frankfurt: Springer International Publishing, 2021);
Dirk A. Zetzsche and Linn Anker-Sørensen, ‘Regulating Sustainable Finance in the Dark (tm), 23 European Business Organization Law Review 47 (2022), at 85. passim.
European Commission, Action Plan: Financing Sustainable Growth COM (2018) 97 final.
The SFDR is supplemented by the RTS embedded in the Commission Delegated Regulation (EU) 2022/1288 of 6 April 2022 (…) [on] the content and presentation of the information in relation to the principle of ‘do no significant harm (tm), specifying the content, methodologies and presentation of information in relation to sustainability indicators and adverse sustainability impacts, and the content and presentation of the information in relation to the promotion of environmental or social characteristics and sustainable investment objectives in pre-contractual documents, on websites and in periodic reports OJ 2022 L 196/1.
Regulatory Technical Standards (RTS) are technical rules drafted by one of the European Supervisory Authorities (ESAs) that further develop, specify and determine the conditions for consistent harmonisation of the rules included in a legislative act.
Commission Delegated Regulation (EU) 2021/2139 of 4 June 2021 supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council by establishing the technical screening criteria for determining the conditions under which an economic activity qualifies as contributing substantially to climate change mitigation or climate change adaptation and for determining whether that economic activity causes no significant harm to any of the other environmental objectives OJ 2021 L 442/1.
Climate Benchmarks Regulation (EU) 2019/2089 of the European Parliament and of the Council OJ 2019 L 317/17.
Proposal for a Directive of the European Parliament and of the Council (…) as regards corporate sustainability reporting (COM (2021) 189 final.
See Eibe Riedel, ‘Standards and Sources. Farewell to the Exclusivity of the Sources Triad in International Law? (tm), 2 European Journal of International Law 58 (1991), at 84.
See the Oxford English Dictionary, at 504, 505.
See Tim B 1/4the and Walter Mattli, The New Global Rulers: The Privatization of Regulation in the World Economy (Princeton: Princeton University Press, 2011), passim;
Dieter Kerwer, ‘Banking on Private Actors. Financial Market Regulation and the Limits of Transnational Governance (tm), in Adrienne H (c)ritier, Michael Stolleis and Fritz Scharpf (eds), European and International Regulation after the Nation State (Baden-Baden: Nomos, 2004) 205;
Janet Koven Levit, ‘A Bottom-Up Approach to International Law-Making: The Tale of Three Trade Finance Instruments (tm), 30 Yale Journal of International Law 125 (2005).
See Anne Peters, ‘Lucy Koechlin and Gretta Fenner Zinkernagel, Non-State Actors as Standard Setters: Framing the Issue in an Interdisciplinary Fashion (tm), in Anne Peters, Lucy Koechlin, Till For̈ ster and Gretta Fenner Zinkernagel (eds), Non-State Actors as Standard Setters (Cambridge: Cambridge University Press, 2009) 13.
Ibid, at 1.
See Joseph Nye and John Donahue, Governance in a Globalizing World (Washington: Brookings Institution Press, 2000) passim.
See Susan Strange, The Retreat of the State: The Diffusion of Power in the World Economy (Cambridge: Cambridge University Press, 1996) passim.
See Peters, For̈ ster and Koechlin, above n 14, at 3.
See Steven Wheatley, ‘Democratic governance beyond the state: the legitimacy of non-state actors as standard setters (tm), in Anne Peters, Lucy Koechlin, Till For̈ ster and Gretta Fenner Zinkernagel (eds), Non-state Actors as Standard Setters (Cambridge: Cambridge University Press, 2009) 215;
Julia Black, ‘Legitimacy, Accountability and Polycentric Regulation: Dilemmas, Trilemmas and Organisational Response (tm), in Anne Peters, Lucy Koechlin, Till For̈ ster and Gretta Fenner Zinkernagel (eds), Non-State Actors as Standard Setters (Cambridge: Cambridge University Press, 2009) 241.
See Peters, Koechlin and Fenner Zinkernagel, above n 14, at 12.
See Harm Schepel, The Constitution of Private Governance, Product Standards in the Regulation of Integrating Markets, 1st ed. (Oxford: Hart Publishing, 2005) 3.
See Peters, Koechlin and Fenner Zinkernagel, above n 14, at 18.
See Marcus Schaper, ‘Non-state environmental standards as a substitute for state regulation? (tm), in Anne Peters, Lucy Koechlin, Till For̈ ster and Gretta Fenner Zinkernagel (eds), Non-State Actors as Standard Setters (Cambridge: Cambridge University Press, 2009) 304.
According to the International Law Commission, these are as organisations ‘established by treaty or other instrument governed by international law and possessing [their] own international legal personality (tm).
See Art.
of the Draft Articles on the Responsibility of International Organizations, Report of the International Law Commission, Fifty-fifth session, 2003 (UN Doc A/58/10, 38).
See Enrico Milano and Niccolò Zugliani, ‘Capturing Commitment in Informal, Soft Law Instruments: A Case Study on the Basel Committee (tm), 22 (2) Journal of International Economic Law 163 (2019), at 176.
See Jose Gustavo Prieto Muñoz, ‘Governance of the Global Financial System: The Legitimacy of the BCBS 10 years after the 2008 Crisis (tm), 22 (2) Journal of International Economic Law 247 (2019), at 260.
See Jan Riepe, Basel and the IASB: Accountability Interdependencies and Consequences for Prudential Regulation, 22 (2) Journal of International Economic Law, (2019), at 261 "283.
Accordingly see Kern Alexander, Rahul Dhumale, and John Eatwell, Global Governance and International Standard Setting (Oxford: Oxford University Press, 2005) at 37;
Marc Jacob, ‘Bank for International Settlements (BIS) (tm), in Max Planck Encyclopedia of Public International Law (2013) http://opil.ouplaw.com/view/10.1093/law:epil/9780199231690/law-9780199231690-e453 (visited 2 November 2022).
See Milano and Zugliani, above n 25, at 163 "176.
See Chris Brummer, Soft Law and the Global Financial System: Rule Making in the Twenty-First Century, 2nd ed. (Cambridge: Cambridge University Press, 2011) passim.
See Matteo Ortino, ‘The Governance of Global Banking in the Face of Complexity (tm), 22 (2) Journal of International Economic Law 177 (2019), at 204.
https://www.afi-global.org/(visited 2 November 2022).
See Linn M. LoPucki, ‘Corporate Greenhouse Gas Disclosures (tm), 56 (1) UC Davis Law Review (Forthcoming November 2022).
See Hans B. Christensen, Luzi Hail and Christian Leuz, ‘Mandatory CSR and Sustainability Reporting: Economic Analysis and Literature Review (tm), 26 Review of Accounting Studies 1176 (2021), at 1178.
On greenwashing see Wahida Shahan Tinne, ‘Green Washing: An Alarming Issue (tm), 7 ASA University Review 81 (2013), at 88;
Desirèe Schmuck, Jorg Matthes and Brigitte Naderer, ‘Misleading Consumers with Green Advertising? An Affect "Reason "Involvement Account of Greenwashing Effects in Environmental Advertising (tm), 47 (2) Journal of Advertising 127 (2018), at 145.
Art.
Taxonomy Regulation (EU) 2020/852 of the European Parliament and of the Council OJ 2020 L 198/13.
See Franziska Sch 1/4tze and Jan Stede, ‘The EU Sustainable Finance Taxonomy and its Contribution to Climate Neutrality (tm), Journal of Sustainable Finance & Investment (2021), 1 "34.
Organisation for Economic Cooperation and Development, ‘Due Diligence Guidance by Sector (tm), http://mneguidelines. oecd.org/guidelines/(visited 2 November 2022).
Organisation for Economic Cooperation and Development, ‘Due Diligence for Responsible Corporate Lending and Securities Underwriting (tm), https://mneguidelines.oecd.org/due-diligence-for-responsible-corporate-lending-and-securitiesunderwriting. pdf (visited 2 November 2022).
International Finance Corporation, Guidance Notes to Performance Standards on Environmental and Social Sustainability,
January 2012.
International Finance Corporation, Performance Standards on Environmental and Social Sustainability, 1 January 2012.
See also World Bank, ‘Environmental and Social Standards (ESS) (tm), https://www.worldbank.org/en/projects-operations/ environmental-and-social-framework/brief/environmental-and-social-standards (visited 2 November 2022).
OECD Guidelines for MNEs and the IFC Performance Standards on Environmental and Social Sustainability.
Organisation for Economic Cooperation and Development, ‘Due Diligence Guidance for Responsible Business Conduct (tm), https://mneguidelines.oecd.org/OECD-Due-Diligence-Guidance-for-Responsible-Business-Conduct.pdf (visited 2 November 2022).
Global Initiative for Sustainability Standards (GISR), ‘Sustainability rating standards. Component 1: Principles (tm), http:// www.truevaluemetrics.org/DBpdfs/Initiatives/GISR/GISR-Principles-Version-1-1.pdf (visited 2 November 2022).
GRI, ‘Consolidated set of GRI Sustainability Reporting Standards 2016 (tm), https://www.globalreporting.org/standards/gristandards- download-center/consolidated-set-of-gri-standards/(visited 2 November 2022).
International Integrated Reporting Council, IIRC, ‘International 〈IR〉 Framework January 2021 (tm), https:// integratedreporting.org/wp-content/uploads/2021/01/InternationalIntegratedReportingFramework.pdf (visited 2 November 2022).
SASB Standards, https://www.sasb.org/standards/download/(visited 2 November 2022).
See Emily Barman, ‘Doing Well by Doing Good: A Comparative Analysis of ESG Standards for Responsible Investment, Advances in Strategic Management (tm), 38 Emerald Publishing Limited, Bingley 289 (2018), at 311.
See Tom Adams, ‘Lindsay Smalling and Sasha Dichter, ESG Investing Needs to Expand Its Definition of Materiality (tm), Stanford Social Innovation Review, 23 February 2022, https://ssir.org/articles/entry/esg_investing_needs_to_expand_its_definition_ of_materiality (visited 2 November 2022).
Organisation for Economic Cooperation and Development, Due Diligence Guidance for Responsible Business Conduct (May 2018).
PRI, What are the Principles for Responsible Investment?
Commission Regulation (EC) No 1126/2008 of 3 November 2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council, OJ 2008 L 320/1.
See Marco Bodellini and Rosa Maria Lastra, ‘Soft law and Sovereign debt, in United Nations Conference on Trade and Development (tm), (7 November 2018), at 1 "29.
See Marco Bodellini, ‘The Long ‘Journey (tm) of Banks from Basel I to Basel IV: Has the Banking System Become More Sound and Resilient than it Used to be? (tm), 20 (1) ERA Forum 81 (2019), at 97.
This may change if the European Commission puts forward a proposal for a Social Taxonomy;
see Dirk A. Zetzsche, ‘Marco Bodellini, Roberta Consiglio, Towards A New European Social Taxonomy: A Counterproposal Based On A Three-Step Approach (tm), University of Luxembourg Working Paper, 2022.
The Platform on Sustainable Finance advising the European Commission is working on the development of a social taxonomy.
Securities and Exchange Commission, SEC Staff Accounting Bulletin: No. 99 "Materiality, 17 CFR Part 211, 12 August 1999, https://www.sec.gov/interps/account/sab99.htm#foot4 (visited 2 November 2022).
Ibid.
TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438, 449 (U.S. Supreme Court 1976).
See Hester M. Peirce, We are Not the Securities and Environment Commission "At Least Not Yet, Statement 21 March 2022.
European Commission, Guidelines on Non-financial Reporting: Supplement on Reporting Climate-related Information, June 2019, https://ec.europa.eu/finance/docs/policy/190618-climate-related-information-reporting-guidelines_en.pdf (visited
November 2022).
See Felix Beske, Ellen Haustein and Peter C. Lorson, ‘Materiality Analysis in Sustainability and Integrated Reports (tm), 11 (1) Sustainability Accounting, Management and Policy Journal 162 (2020), at 186;
Olivier Boiral, ‘Inaki Heras-Saizarbitoria and Marie-Christine Brotherton, Assessing and Improving the Quality of Sustainability Reports: The Auditors (tm) Perspective (tm), 155 (3) Journal of Business Ethics 703 (2019), at 721.
Art. 19a (1) of Directive 2013/34/EU of the European Parliament and of the Council OJ 2013 L 182/19 (introduced by Directive 2014/95/EU, the Non-Financial Reporting Directive of the European Parliament and of the Council, OJ 2014 L 330/1).
European Commission, Guidelines on Non-financial Reporting: Supplement on Reporting Climate-related Information, June 2019, https://ec.europa.eu/finance/docs/policy/190618-climate-related-information-reporting-guidelines_en.pdf (visited
November 2022).
See Iris Chiu, ‘The EU Sustainable Finance Agenda: Developing Governance for Double Materiality in Sustainability Metrics (tm), 23 European Business Organization Law Review 87 (2022), at 123.
On this see Charl De Villiers, Matteo La Torre and Matteo Molinari, ‘The Global Reporting Initiative (tm)s (GRI) Past, Present and Future: Critical Reflections and a Research Agenda on Sustainability Reporting (Standard-Setting) (tm), Pacific Accounting Review (2022), forthcoming.
See Carol A. Adams et al., ‘The Double-Materiality Concept. Application and Issues (tm), Global Reporting Initiative, May 2021.
See Matthias Tag̈ er, ‘Double materiality (tm): what is it and why does it matter?, London School of Economics and Political Science and Grantham Research Institute on climate change and the environment, Commentary 21 April 2021, https://www.lse. ac.uk/granthaminstitute/news/double-materiality-what-is-it-and-why-does-it-matter/(visited 2 November 2022).
See Adams et al., above n 67, passim.
See Carol A. Adams, Paul B. Druckman and Russel C. Picot, Sustainable Development Goals Disclosure (SDGD) Recommendations, Association of Chartered Certified Accountants, Chartered Accountants Australia New Zealand, Institute of Chartered Accountants Scotland, International Federation of Accountants, International Integrated Reporting Council and World Benchmarking Alliance, London, (2020).
See Adams et al., above n 67, passim.
See Dirk A. Zetzsche and Marco Bodellini, A Sustainability Crisis Makes Bad Laws "Towards Sandbox Thinking in EU Sustainable Finance Law and Regulation, Working Paper, 2022, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4147295 (visited 2 November 2022).
See Matteo La Torre, ‘Svetlana Sabelfeld, Marita Blomkvist and John Dumay, Rebuilding trust: sustainability and nonfinancial reporting and the European Union regulation (tm), 28 (5) Meditari Accountancy Research, Emerald Group Publishing 715 (2020).
See Mathilde Bossut, Ingmar J 1/4rgens, Thomas Pioch, Frank Schiemann, Theresa Spandel and Raphael Tietmeyer, What information is relevant for sustainability reporting? The concept of materiality and the EU Corporate Sustainability Reporting Directive, Sustainable Finance Research Platform "Policy Brief "7/2021, 11, urging the European Commission to provide a definition of double materiality and to precisely indicate what to report and who should report.
In the U.S., on 21 March 2022, the SEC proposed a rule that would make corporate greenhouse gas (GHG) emissions reporting mandatory, thereby adopting the double-materiality principle.
See Anu Bradford, ‘The Brussels Effect (tm), 107 Northwestern University Law Review 1 (2012).
Id.
See Gary Clide Hufbauer et al., ‘Economic Sanctions Reconsidered (tm), June 2009, at 11, discussing foreign-policy use of economic sanctions generally.
See Bradford, above n 76, at 1.
See Marco Bodellini, ‘The European Union Regulation on Marketing of Alternative Investment Funds: Another Step Towards Integration of the European Union Financial Market (tm), 37 Business Law Review 216 (2016), where the case of the release of the EU passport to non-EU fund managers under the AIFMD is discussed as an example of extraterritorial effects of EU laws.
See Lloyd Gruber, Ruling the World: Power Politics and the Rise of Supranational Institutions (Princeton: Princeton University Press, 2000) passim, arguing that unilateral regulatory globalization is produced through ‘go-it-alone power (tm) by a dominant regulator.
See Bradford, above 76, at 1.
Ibid, at 1.
PRI, Testing the Taxonomy, Insights from the PRI Taxonomy Practitioners Group, www.unpri.org/download?ac=11662 (visited 2 November 2022).
IEEP, Politics Over Science: Nuclear and Fossil Gas in the Taxonomy, February 2022, https://ieep.eu/news/politics-overscience- nuclear-and-fossil-gas-in-the-taxonomy (visited 2 November 2022).
Dirk A. Zetzsche, Marco Bodellini and Roberta Consiglio, ‘Towards A New European Social Taxonomy: A Counterproposal Based On A Three-Step Approach (tm), University of Luxembourg, Working Paper, 2022.
