Key news in this edition:
- US Congress members urge reporting requirements on energy use and emissions from crypto-miners
- Colombian congress publishes new legal framework for mining
- Australian financial services and markets regulator publishes ‘greenwashing’ guidance.
The Australian Securities and Investment Commission releases ‘greenwashing’ guidance
In June 2022, the Australian Securities and Investment Commission (‘ASIC’), the Australian corporate, financial services and markets regulator, released Information Sheet (INFO 271), a set of guidelines aiming to prevent ‘greenwashing’ in the promotion of sustainability-related products. The guidelines, published for managers of funds and investment vehicles, define ‘greenwashing’ as “the practice of misrepresenting the extent to which a financial product or investment strategy is environmentally friendly, sustainable or ethical”. INFO 271 also provides questions that fund managers are encouraged to ask in order to identify and avoid potential ‘greenwashing’.
European Parliament adopts Digital Services Act and Digital Markets Act
On 5 July 2022, the European Parliament adopted the Digital Services Act (‘DSA’) and Digital Markets Act (‘DMA’), legislations that aim to regulate the activities of digital service providers. Under the DSA, digital service providers, such as marketplaces and social media platforms, are obliged to: set new measures to counter illegal content; increase transparency and accountability of platforms; and strengthen traceability and checks on traders in online marketplaces. The DSA also prohibits these platforms from using misleading practices to influence consumer decision making and from using certain types of targeted advertising.
Separately, the DMA aims to prevent unfair business practices by regulating the activities of large online platforms acting as ‘gatekeepers’, platforms with a dominant online position which makes them difficult to avoid by consumers. The European Commission will have authority to carry out market investigations and impose fines to ensure that the guidelines are implemented once the DMA becomes effective in early 2023.
The Congress of Colombia publishes new legal framework for mining
On 11 July 2022, the Congress of Colombia introduced Law 2250 (Ley 2250), a new legal framework that expands regulations on the Colombian mining sector. The law sets out the official legalisation of traditional mining and formalises activities which were previously unregulated. The new law specifically prohibits mining in protected areas and national parks. It also requires distributors of natural resources to conduct supply chain due diligence, to be presented annually to the Ministry of Mines and Energy. According to Law 2250, the Ministry of Environment and Sustainable Development will establish criteria for an environmental impact assessment which mining companies will be required to conduct in their application for a temporary mining licence in the country.
The Financial Reporting Council outlines support for changes to UK governance codes
On 12 July 2022, the Financial Reporting Council (‘FRC’), an independent UK-based regulator, published a position paper outlining how it will support the UK government’s plans to reform the UK’s audit and corporate governance codes and standards. In May 2022, the UK government had laid out plans to revise existing governance codes and create the Audit, Reporting and Governance Authority, which the FRC is expected to transition into. The FRC position paper includes plans for revisions and additions to existing governance codes, the strengthening of auditing and accounting standards, and the setting of new expectations for markets regulated by the FRC.
Six congress members request regulated reporting standards of emissions and energy use by crypto miners
On 15 July 2022, US Senator Elizabeth Warren and five other congress members wrote a letter to the US Environmental Protection Agency (‘EPA’) and Department of Energy (‘DoE’), with concerns regarding the lack of available information on the emissions and energy usage of crypto-mining operations. Warren et al. urged the EPA and DoE to set reporting requirements on energy usage and emissions from crypto-miners due to the environmental impact of their operations. This letter follows an investigation by the US Congress into the environmental impacts of seven major crypto-mining companies in the US.
New disclosure and deporting guidelines for retail ESG funds
On 28 July 2022, the Monetary Authority of Singapore (‘MAS’), Singapore's central bank, provided new disclosure and reporting guidelines for retail ESG funds, including guidance on existing requirements to provide details on the fund’s investment objective, strategy and approach, on its prospectus. According to the guidelines, risks arising from the fund’s strategy and ESG focus will also need to be disclosed. These guidelines, which aim to mitigate the risk of greenwashing and increase comparability among retail ESG funds disclosures, will come into effect on 1 January 2023.