There are so many ESG-related publications and developments that it is hard to keep abreast of them all. For this reason, every two weeks, our firm has been publishing a tracker of ESG-related publications and developments, with a primary focus on developments that may be of most interest to or impact our clients, be they corporates, asset managers or asset owners.

Key updates covered in this edition include:

  • The Spanish Parliament has approved the Draft Law on the Prevention of Food Loss and Food Waste;
  • the Spanish Council of Ministers has approved the Draft Organic Law on equal representation of women and men in decision-making bodies; and
  • the announcement of the launch date for the final nature reporting recommendations of the Taskforce on Nature-related Financial Disclosures.

If you have any ESG-related questions, please get in touch with your usual contact at HSF who will be able to direct you as appropriate.

Key items

This issue covers the period from 10 to 24 May 2023.

11 May 2023

The Spanish Council of Ministers has approved the Royal Decree-Law 4/2023, of 11 May adopting urgent agricultural and water measures in response to the drought and the worsening of conditions in the primary sector resulting from the war in Ukraine and weather conditions (the Royal Decree-Law). It also adopts measures to promote the use of public transport amongst young people and the prevention of risk in the workplace when there is high temperatures (the Royal Decree-Law).

The measures of the Royal Decree-Law include direct state aid for the agricultural and livestock sectors amounting to over 636 million euros and 355 million euros for beef, sheep and goat meat and milk products to compensate for increased production costs, such as feed. Furthermore, the Royal Decree-Law provides for the construction of new infrastructures, such as desalination plants, the doubling of urban water reuse, and a reduction in fees and tariffs for affected farms.

12 May 2023

The European Securities and Markets Authority (ESMA) has published a study on the structure and functioning of EU natural gas derivatives markets, and potential risks for financial stability.

ESMA notes that the market is characterised by a high degree of concentration of market participants active in clearing and trading activity, and some energy firms hold relatively large derivative positions. In this context, liquidity and concentration risks are among the main vulnerabilities identified, along with data fragmentation and data gaps. The recent migration of some of the activity from exchange-traded to over-the counter (OTC) derivatives trading raises concerns due to more limited transparency and more bespoke margin and collateral requirements in that market segment.

15 May 2023

The European Insurance and Occupational Pensions Authority (EIOPA) published its Risk Dashboard based on Q4 2022 Solvency II data. The analysis showed that the main concern for the insurance sector is insurers’ exposure to macro and market risks, while all other risk categories (including ESG-related risks) are at medium levels.

17 May 2023

Reuters have reported that a group of Republican-led US states has asked a federal judge to strike down a Biden administration rule allowing socially conscious investing by retirement plans. The rule, which took effect on January 30 2030, sets guidelines for ESG investing including requiring that socially conscious investments are still financially sound. The states sued in January and in February had asked the judge to temporarily block the rule pending the outcome of the case. In the most recent filings, the states have asked the judge to rule on the merits of their lawsuit. Congress voted in March to repeal the rule, but President Joe Biden rejected the proposal in the first veto of his presidency.

17 May 2023

The European Insurance and Occupational Pensions Authority (EIOPA) has published the keynote speech delivered by Petra Hielkema at EIOPA’s public event on Opening the World of Catastrophe Models. Ms Hielkema unveiled a new tool which will further EIOPA’s ambition to be ‘a data hub for relevant open-source data on risks related to climate change’ – the Climada App.

The EIOPA Chair explained that the Climada App is free to use and ‘provides a global coverage of major climate-related extreme weather hazards from cyclones and river flood to drought, including rich historical and probabilistic event data sets at distinct time horizons’.

18 May 2023

Reuters has reported that venture capital investment in clean energy start-ups jumped to $12.3 billion last year, up from $1.9 billion in 2019. An analysis from consultants Oliver Wyman based on data from Crunchbase showed that investors in North America led the way in recent clean energy investments, providing 57% of last year’s total, with European players behind on $3.5 billion.

18 May 2023

The European Supervisory Authorities (ESAs) have published questions and answers (Q&As) relating to the Sustainable Finance Disclosures Regulation (SFDR) and the SFDR Delegated Regulation. The questions and answers relate to the following topics:

  • scope issues;
  • definition of sustainable investment;
  • current value of all investments in PAI and taxanomy-aligned disclosures;
  • PAI disclosures;
  • financial product disclosures;
  • multi-option products;
  • taxonomy-aligned investment disclosures; and
  • financial advisers and execution-only FMPs.

18 May 2023

The Plenary of the Spanish Parliament has approved the Draft Law on the Prevention of Food Loss and Food Waste (the Draft Law). The aim of the Draft Law is to prevent and reduce food losses and food waste by all actors in the food chain, establishing a hierarchy of priorities for solutions and responding to the objective on responsible production and consumption of the 2030 Agenda.

The specific aims of the Draft Law include, for example: to reduce food losses and waste along the food chain through a more efficient management of resources; promoting the circular economy; encouraging food donation, guaranteeing food safety and traceability; or promoting research and innovation in the field of preventing and reducing food losses and waste.

22 May 2023

The Taskforce on Nature-related Financial Disclosures (TNFD) has confirmed the launch date for the final nature reporting recommendations as 18 September 2023. The cross-stakeholder body aims to steer businesses and financial organisations in calculating and reporting their dependencies and impacts on nature. The recommendations come in the wake of the historic agreement of the Global Biodiversity Framework at the UN’s COP15 biodiversity negotiations last December. The TNFD has already launched drafts of its disclosure framework, which are loosely based on those of the TaskForce on Climate-related Financial Disclosures.

22 May 2023

On 22 May, Law 9/2023 of 3 April on Family Farming and Access to Land in Castilla-La Mancha (Law 9/2023) was published. The purpose of Law 9/2023 is to establish the legal framework regulating the actions of the regional administration for the promotion and development of family farming, as well as consolidating the population in rural areas by, amongst others, defining agricultural protection areas and creating the Castilla-La Mancha Available Land Bank.

Law 6/2023 aims to improve the socio-economic inclusion and well-being of people involved in family farming and their environment in order to consolidate the population of rural communities and strengthen the multidimensionality of family farming.

23 May 2023

The Spanish Council of Ministers has approved, in the second round, the Draft Organic Law on equal representation of women and men in decision-making bodies, to guarantee parity in politics, within the civil service and within private businesses, extending its scope to constitutional bodies and bodies of constitutional relevance (the Draft Organic Law).

The Draft Organic Law aims to meet the UN 2030 Agenda goal of ensuring women and girls have "equal opportunities with men and boys in employment, leadership and decision-making at all levels".