Katten ESG Guidepost is a monthly publication highlighting the latest news, legal and regulatory developments involving environmental, social and governance matters.
To read more issues of Katten ESG Guidepost, please click here.
The Carbon Claims Pincer Movement
By Chris Cole
In response to litigation about carbon neutrality claims, many corporations and asset managers have been inclined to go silent, that is, to engage in "greenhushing" by not publicly mentioning any carbon reduction goals. Although greenhushing may seem the course of least resistance, it is increasingly under fire by regulators, potentially causing whiplash. Read about sustainability disclosure regulations.
UK Regulators Publish Consultations on Diversity and Inclusion Measures
By Sara Portillo, Neil Robson
The Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) have recently published consultation papers on a package of measures to promote diversity and inclusion (D&I) in the UK financial sector aiming to achieve healthier firm cultures, reduce groupthink, unlock new talent from individuals with underrepresented characteristics and address consumer needs (jointly, the "Consultations"). Read about D&I consultations.
SEC Adopts Amendments to 'Names Rule' Impacting Regulated Investment Funds
By Vlad Bulkin, Richard Marshall, Brandon Bucio
On September 20, the Securities and Exchange Commission (SEC), adopted amendments (Amendments) to Rule 35d-1 (Names Rule) under the Investment Company Act of 1940, as amended (Investment Company Act). The Names Rule generally requires a registered investment company (RIC) or a business development company (BDC) to invest at least 80 percent of the value of its assets in investments suggested by the fund's name. The SEC noted that investors continue to consider environmental, social, and governance (ESG) factors when deciding where to allocate their capital, leading some funds to exaggerate their ESG practices or the extent to which their investment products use ESG factors. Read Katten's advisory.
Johnjerica Hodge Shares Global ESG Regulatory Considerations in M&A With The Texas Lawbook
Partner and ESG Risk and Investigations Co-Chair Johnjerica Hodge recently served as a panelist for the "WTF Does ESG Really Mean for M&A?" session during the 19th annual Mergers and Acquisitions Institute at the University of Texas School of Law. The panel, featured in an article by The Texas Lawbook, determined that ESG issues are an increasing consideration in M&A transactions. Read about ESG regulatory frameworks.
Neil Robson Discusses ESG Benchmarks and Disclosures With Funds Europe and Thomson Reuters
Financial Markets and Funds partner Neil Robson recently spoke with Funds Europe and Thomson Reuters on how regulations coming from the UK's FCA and under the EU's Corporate Sustainability Reporting Directive (CSRD) present challenges for companies disclosing information related to ESG factors. While the CSRD seeks to assure stakeholders of the authenticity and comprehensiveness of sustainability reports, there are staunch considerations for companies. Read about Neil's comments.