2024 Global Regulatory Update: Recent Developments and Key Themes in ESG-Related Regulations Globally

Below are key takeaways from ISS STOXX’s recently released report on the state of ESG-related regulation in the world. To access the full report, you can download it directly from the online library.

• The establishment of the IFRS Sustainability Disclosure Standards and the EU’s European Sustainability Reporting Standards under the Corporate Sustainability Reporting Directive ushered in a transformative change in corporate sustainability reporting globally. Multiple jurisdictions have adopted the IFRS standards, and how companies adjust to a broader degree of disclosure expectations remains to be seen.
• Investment fund managers must navigate a complex regulatory landscape at the product and manager levels due to policymakers’ anti-greenwashing measures that govern the use of ESG-related terms. Reporting regimes include the U.K. Sustainability Disclosure Requirements and the Anti-Greenwashing Rule, the EU Sustainable Finance Disclosure Regulation, and the European Securities and Markets Authority’s Guidelines on Funds’ Names and apply at the product and manager levels.
• Japan and South Korea have increased the pace of a series of regulatory initiatives designed to improve the market valuation of issuers and to reform corporate governance.
• Multiple countries in the Asia-Pacific region have adopted taxonomies designed to enable investors to assess investments against environmental standards and criteria and allocate capital accordingly. Given the region’s growth and adoption of mechanisms to promote green and transition fixed-income instruments, the taxonomies may noticeably impact the labeled bond market.
• Key issues to watch in ESG-related financial regulation are the growing focus on the green transition; a more prescriptive approach among some regulators to sustainable investment products; supervisory efforts to combat greenwashing; and the post-election tensions arising in certain jurisdictions between expanding regulation and promoting growth.

By:
Noam Cherki, Regulatory Affairs Associate, ISS STOXX
Hugo Gallagher, Senior Associate, Regulatory Affairs & Public Policy, ISS STOXX
Rupali Goyal, ESG Methodology Specialist – Regulatory Solutions, ISS ESG
Takeyuki Ishida, Managing Director and Head of Japanese Research and Asia, ISS Governance
Karina Karakulova, Associate Director, Head of Regulatory Affairs and Public Policy, ISS STOXX
Candice Kim, Associate Director and Head of Korea Benchmark Governance Research, ISS Governance
Ria Modh, ESG Methodology Specialist – Regulatory Solutions & Fixed Income, ISS ESG
Héctor Páez, ESG Methodology Team Lead – Regulatory Solutions & Fixed Income, ISS ESG
Lorna Parkinson, ESG Methodology Specialist – Regulatory Solutions, ISS ESG
Reinhilde Weidacher, Head of Corporate Sustainability Services, ISS-Corporate
Adams Wong, APAC Team Lead – Sustainable Finance and Regulatory Research, ISS-Corporate
John Whitehead, Senior Associate, Thought Leadership, ISS ESG
Jason Yu, Associate – Sustainable Finance and Regulatory Research, ISS-Corporate