Policy and Regulation Update - March 2023

March 30 2023 - ,

Latest developments in the UK

  • On 22nd March the FCA published a Dear CEO letter sent to benchmark administrators, expressing concerns about the quality of their ESG-related disclosures. The regulator concluded the letter stating that “given the importance of ESG benchmarks and our initial supervisory findings, which indicate the potential for widespread failings, we will be doing more work in this area across the portfolio. [...] Where firms fail to consider our feedback, we will deploy our formal supervisory tools and, where appropriate, consider enforcement action in line with the FCA’s Approach to Enforcement.”

  • On 28 February 2023, the Competition and Markets Authority published a draft guidance on the application of UK antitrust law to sustainability agreements. The aim of the Guidance is to provide reassurance and certainty to businesses planning to work together to pursue sustainability goals, by ensuring they are not ‘unnecessarily or erroneously deterred from collaborating lawfully due to fears about competition law compliance’. At the heart of the guidance is the concept of “environmental sustainability agreements”, defined as ‘agreements or concerted practices between competitors and potential competitors which are aimed at preventing, reducing or mitigating the adverse impact that economic activities have on environmental sustainability or assessing the impact of their activities on environmental sustainability.’ A special subset of these agreements are the so-called “climate change agreements”, which contribute towards the UK’s binding climate change targets under domestic or international law.

  • On 28 February, the Department for Work and Pensions (DWP) launched the Taskforce on Social Factors, with the aim to help pension scheme trustees and the wider pensions industry seize the opportunities of the “social” element of ESG in the context of pension scheme investments. The taskforce has three key objectives as identified by the DWP:

    •  to identify reliable data sources; 

    • to monitor and report on developments with the International Sustainability Standards Board as well as with other international standards; and 

    • to develop how trustees can manage risks caused by certain social factors.

Latest developments in Europe

  • On 22nd March the European Commission published a proposal for a Green Claims Directive, a further step in the fight against greenwashing. The proposed directive would impose additional compliance obligations for businesses when making green claims. The directive will also create a new regime for the verification of green claims which would become stricter over time. 

Latest developments internationally


  • The ISSB met on 16 March 2023 to discuss one of the potential projects to be included in the ISSB’s first request for information: specifically that of connectivity in reporting.

  • At this meeting, the ISSB tentatively decided that, within its request for information, it would:

    • expand the scope of the potential project on connectivity in reporting to:

      • focus on integration in reporting; and

      • consider integrated disclosures beyond the requirements related to connected information in IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information (S1) and IFRS S2 Climate-related Disclosures (S2);

    • include a discussion of the requirements in S1 and S2 related to connected information to provide necessary context for the potential project on integration in reporting;

    • present the potential project on integration in reporting as an ISSB project that could be pursued jointly with the IASB, rather than presenting it as a formal joint project; and

    • frame the questions asked in a manner that elicits input about how the project on integration in reporting should be pursued.

  • While there have not been any other groundbreaking updates, the PRI published a briefing note summarising the latest developments around ISSB, and examining how the upcoming standards may look. 


  • In February, the SEC issued its list of examination priorities for 2023. Among the six priorities identified was "Environmental, Social, and Governance (ESG)." The SEC stated that it would "continue its focus on ESG-related advisory services and fund offerings, including whether funds are operating in the manner set forth in their disclosures." The SEC also announced that it would "assess whether ESG products are appropriately labeled and whether recommendations of such products for retail investors are made in the investors' best interest." 


  • IOSCO launched a Report on International Work to Develop a Global Assurance Framework for Sustainability-related Corporate Reporting, focusing on the assurance and ethics (including independence) standards for sustainability-related corporate reporting. Relevant conclusions from the research include:

    • IOSCO welcomes the standard setters’ progress and will consider whether their standards constitute a robust and effective global framework for assurance that meets investors’ needs and expectations.  

    • IOSCO will continue its engagement with reporting, assurance and ethics (including independence) standard setters and use its convening role to bring stakeholders together.

    • IOSCO will continue to support capacity building on sustainability-related information across the ecosystem. 

    • IOSCO will support securities regulators and other relevant authorities’ consideration of assurance and ethics (including independence) standards. 

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