As another year of uncertainty and disruption draws to a close, our Baker McKenzie Financial Institutions lawyers look ahead at the potential disruptors impacting the industry in 2024, all against a background of economic and geopolitical risk.
Our report, 2024: What’s on the Radar for Financial Institutions?, gives an overview of the challenges facing the sector, drawing on our three risk radars, one for each of the forces that are transforming the financial sector.
The European Commission has published practical advice in the form of recommendations explaining that the EU Taxonomy can be used not only to disclose taxonomy-aligned activities and capital expenditures, but to define transition targets and to identify the finance needed to meet them. In this way, the Commission considers that the EU Taxonomy can be used as “forward-looking tool using its criteria as reference points for setting targets.”
In this latest instalment of our Demystifying ESG series, besides considering the Commission’s recommendations generally, we’ll discuss how this “tool” will work in practice across a range of economic activities and how it can be used to compare current with planned environmental performance, as well as a communication tool to articulate transition finance needs.
As background, green and sustainability-linked bonds and loans have been the pioneer products in this space. Following their evolution over a number of recent years, they are now well-established financing products commonly used to finance the energy transition. However, transition finance is emerging as the requirements for green and sustainability-linked financing products are often not met in the context of high-emitting, hard-to-abate sectors looking to reduce emissions
At the Ahead of Tax & Legal Conference 2023, taking place on 1 June 2023, Baker McKenzie tax and legal experts will highlight three important themes: race to net zero, innovation and the international business climate.
Financial institutions are critical players in the transition to a carbon-neutral economy and, because of their role in allocating capital, they can act as a catalyst in achieving better environmental, social and governance outcomes in society generally. Baker McKenzie’s updated Sustainability Risk Radar analyzes the most pressing sustainability risks that FIs need to consider in 2023.
Baker McKenzie’s newest sustainability briefing focuses on the hot topic of transition finance, which is relevant to lenders and borrowers in commercial and syndicated lending. In the context of publications by industry and standard setting bodies such as the Glasgow Financial Alliance for net zero and experience in the market, the briefing discusses: transition finance, credible transition plans, risks and challenges and market progress.
Following the fifth trilogue on 28 February 2023, the European Council and European Parliament each confirmed that a provisional agreement on the new standard to fight greenwashing in the bonds market, the “European Green Bonds Standard”, has now been reached.
Despite initially divergent views on several contentious points, with the Parliament pushing for substantive amendments to the Council’s proposal of 13 April 2022 intended further to heighten regulation, supervision, transparency and accountability across the entire green bond market, this provisional agreement marks a significant step towards creating the first ‘best in class’ standard for issuing green bonds.
Watch and listen to Baker McKenzie specialists and industry experts talk about recent legal and commercial developments affecting financial institutions around the world. The latest webinar in the series looks at Sustainability for Financial Institutions – Global Trends and the LatAm Perspective.
As we embark on the journey towards net zero, financial institutions aspire to increase their understanding of Sustainability-related commercial and regulatory developments. We are inviting you to our upcoming webinar on 12 December 2022, which aims to cover global trends and highlight perspectives from Latin America.
The EU has politically agreed on the adoption of the Corporate Sustainability Reporting Directive, and will likely adopt it before the end of 2022. The CSRD will overhaul the current sustainability reporting landscape for all multinational companies with significant activities in the EU, including those headquartered outside the EU. The reporting obligations of the CSRD will progressively come into force between 2024 and 2028.