Name: ESG Policy Snapshot: What Your Organization Needs to Know
Uploaded: 2025-08-27T14:56:10.969Z
Duration: 42 min 8 s
Description: ESG Policy Snapshot: What Your Organization Needs to Know

Transcript for "ESG Policy Snapshot: What Your Organization Needs to Know": Do you wanna come on stage, Samantha? Yeah. Alright. And, Helen, maybe close the poll. And, we are live. So welcome, everybody. We'll start very soon with our ESG policy snapshot, just allowing some time to let you in the virtual room, take your virtual seat. You can grab a cup of coffee or milk or tea or water. And, again, welcome, everybody. We were about to start just allowing some time, to allow everybody to, join in. Alright. So we have quite, some ground to cover, so let's get started. Welcome, everybody. Good afternoon, to those of you on this side of the Atlantic, and good morning, for for the others stateside or other places of the world. So, before getting started with our ESG policy snapshot webinar, a couple of general housekeeping rules. This event is being recorded, and the recording will be shared with all participants following the event. So you if you want to share it with all your colleagues, you'll be able to do that. We hope you're not having any technical difficulties, but if you do, please email us at mark marketing and Datamaran dot com. And you can submit your questions to, to our panel, to, Ian and myself through the q and a function. We'll make sure that we we, we will will allow some time at the end of the session for for the q and a. If some of the questions will, are asked live, we'll we'll we'll do our best to answer, later. And then in case you haven't met us before, a short introduction. So I'm Donato Collaches, your vice president market leader, partnership and innovation, at DataLearn. I've been with DataLearn, almost since the beginning. It's my ninth year. I like to say that I'm a piece of the furniture. Here, I have a background in accounting, and I completed a PhD in ESG in corporate sustainability. And I lead, our engagement with with policy makers and standard setters among our, other things. So all the fun stuff with IFRS, GRI, and so on and so forth. And to get today, together with me, we have another of our subject matter experts, Ian van der Vlugt. Ian. Thanks, Donato. Hi, everybody. Excited to be exploring this. If Donato is the the armchair of Datamaran, then I'm the on the side table. I've been with Datamaran now for six and a half years officially, unofficially longer than that. Before joining up, I was the head of data at CDP, and I worked at GRI. So I also come with, with that standard set of backgrounds. And, my my role today is kinda talking about more the The US perspective and also bringing that, climate expertise to the table. Excellent. Thank you, Ian. I look forward to our conversation. I appreciate that some of you may not be super familiar, with with DataBank. So, Ian, why don't you, give a a a quick overview, to our audience about what we do? Love to. So there are three solutions that we have. We just launched earlier this year, our community platform called Harbor. We welcome all in house corporate sustainability folks to join up. It's a really great way to stay on top of the latest developments to engage with peers, and we also have, lots of webinars, live events, virtual events, all sorts of fun stuff, and we'll talk a bit, as we wrap up in thirty five minutes about some of the the upcoming events that we have and how you can get involved. Beyond that, we are a software company, so we have some software solutions too. The the first one that we call Core is the the breadwinner for all corporate sustainability teams. It's, focused more on the the the regulatory side, more on the compliance side, but ultimately, how do we begin to to get our ESG governance in place? How do we define what's most important for our business? And then monitor how that's progressing specifically, with a focus on the on the regulatory dimension. And then we have Suite, which is our our end to end product, where we also look at, peer benchmarking, in addition to the the regulatory monitoring and, and the best in class data driven materiality to understand what's happening, and and staying on top of developments relevant to your business. Excellent. So now let's go to the topic of, of today. In this, ESG policy, webinar, we'll essentially, cover, two main aspects. One, trends that we are seeing and also that our regulatory team compile by, analyzing and adding regulation to our, extensive database of both mandatory and voluntary, policy initiatives. And and then we look at timelines. We'll look at, q two retrospective, and we'll we'll we'll have a look ahead, to what what what to expect in h two. We'll also, have a look at consultations that are ongoing, right now as those give, you know, a good feeling, in terms of emerging topics, and requirements that are bubbling up on the on on the horizon. Then we'll wrap up with, key takeaways for, for business leaders, and I'll answer some of your questions. So, prepare your best questions. Again, pop up, the questions in in in the q and a, section. And, let's go as we have a lot to cover. And as usual, we like to kick off the conversation by, launching a poll. So, you'll see, the first poll, appearing, next to, your your screen. And the poll is how are you finding the current ESG policy landscape? Is it crystal clear and easy to navigate? Is it moderately challenging? You've seen worst. And or or or, actually, in fact, it's the worst seen in years and regulatory uncertainty is blocking you from, you know, taking decisions or, actioning, your your your strategy. As context, to, to our poll, we wanted to show you some highlights from, our datasets. So as I mentioned before, we have, quite comprehensive database, looks at both, regulation is enforced by law. So, Hartwell, mandatory regulation. We have global coverage. We cover over 100 countries, and we we look at policy making activity, both in terms of active regulation and expected regulations. But we also look at the soft flow space. So what we commonly, refer to in our space as the lovely alphabet soup. So from the GRI standards to, the ESRS, IFRS, SBTI, and many, many more. So thanks to our vantage point, we actually, can track the evolution of, regulations, over time. And we've seen that, compared to ten years ago, so back to 2014. We've seen a 39 times growth in terms of, volume of, of of of regulation. So that's a quite remarkable, quite remarkable, growth. And and, Ian, we haven't seen any any deceleration in in in recent in recent times. Right? No. I mean, what what I think is quite telling about this and, the the attention grabbing news headlines aside, right, with where what what we what we are led to believe is that, the regulatory tailwinds have kind of stopped or or shifting and regulation is going away. And we'll we'll talk about some of that again wearing my US hat. I'm happy to happy to dig in a bit. It would be remiss if I didn't. But, you know, headlines aside, the the the reality is that regulation around sustainability related matters is not going anywhere. In fact, it's continuing to grow. We've called it, the regulatory tsunami. And I think, you know, we can see the wave kind of cresting up even further. And I I think that we can continue to expect accelerated growth, as as we as we move forward. So, you know, the the takeaway, I think, is, companies shouldn't get too relaxed about, you know, regulatory matters. It's not like we can stick our heads in the sand and and everything's gonna go away. And in fact, we need to think seriously about how we stay on top of all these regulations and and how we set up a a governance process that helps us to to manage them appropriately. And and we'll we'll talk more about that, very soon. But it's time now to look at the results of our first poll. So let me stop sharing. And great. So as expected oh, well, no. Actually, this is surprising. I think we we we were doing a little, a little, bet on, you know, among ourselves. I know. Both are still coming in, though. We we were expecting to see moderately challenging as the, you know, the the the sort of go to answer here. But, apparently, there is quite a strong opinion that this is the worst landscape that we've seen, in in years. Do do you think do you think that? Do you agree, Ian? Is this the worst? I mean, I again, if we focus on the headlines, I think that there is, yes, there is a lot of uncertainty and a lot of the the big ticket regulations that, that that were kind of pushing us globally, have have taken a shift. I think that a lot of The US trade policies have also thrown companies for the loop. I mean, every day I wake up and and try to understand what's going on with the tariff regime and, feel no better about it. So I I I do think that there is a lot of uncertainty and and volatility, which obviously is, is is represented here in in these results. But, you know, it's it's not unmanageable, and I think it's, if we kind of try to find that clarity in the noise that's always been our remit as a company, helping companies to do that, then then, you know, I I think that we can cut through. And and the moderately challenging is as we discussed, where where I thought folks would have landed. Absolutely. And I I I will say we'll invite the two votes of crystal clear and easy to navigate to come forward at some point because I think we want to hear from them as well. I I how they managed to to see clearly what what what's happening in in this in this landscape. But, you know, to your point on, you know, giving clarity in the noise, I think we can move forward to, looking at the trends. So if we can stop sharing the, the results of the call, thank you, then we can move on with our presentation. So, as as mentioned, we we have, we obviously use AI, to scan the regulatory horizon and automate a lot of the processes, but we have a team of regulatory experts also that curates, this does the database. And some of you may may be familiar with their work, including our weekly, regulation updates as well our, as well as our quarterly policy briefs. So we ask them, what what are the policy trends that emerge in particular, are emerging from, the the the the past 2025. So what's interesting here is that we have regulatory reform and simplification, climate and finance integration, ESG data and ratings under scrutiny, industrial industrial trade policy climate alignment, and US fragmentation and policy polarization. So some of these are evergreens. You know, when it comes to climate and finance integration, I think this has been, like, a trend for for the past ten years, or or so and similar for ESG data and and ratings under scrutiny. But, regulatory reform and simplification is very much a new a new element. Also the, you know, the trade trade policy and the industrial climate alignment, is something that we haven't seen before with this traction, and, of course, all the fragmentation and prioritization, polarization of of of The US landscape. Ian, do you do you see anything surprising, in, in these in these trends? Not not surprising per se. I mean, under this is obviously, a whole heap of regulations that are featured in in our q two policy brief. So, I do welcome folks who who are on harbor to and and, have joined our premium harbor community, to go and and have a look if you haven't yet. I did wanna call out just a a couple of those the the top developments in my mind, over q two or what I found kind of interesting and innovative. So firstly, on the the climate and finance side, again, I'm gonna bring my my climate hat forward. I thought that that the the new GRI standards around climate, I I was happy to see just transition featured in there. I think one of the bits that we haven't talked about enough as a as a community are the trade offs necessary as part of the the low carbon transition. And, and, you know, having having a standard way to report on and and be transparent about those trade offs and choices that are being made including impacts on on people, whether that's, communities, workforce, suppliers, etcetera, I think is, is is really important, and I I welcome that as a as a big development. Also, on under the sustainable finance umbrella, as you mentioned, this has been kind of an evergreen for such a long time. But what we saw is a number of of additional sustainable finance taxonomies being rolled out in different jurisdictions over q two. And this is a trend we've really seen since the the EU launched its its taxonomy. And at the time, we said this is this is gonna be big, and this is going to change the global regulatory landscape. And I I think that that it has and it will continue. By last count, you know, something like 50 or 60 countries around the world, or or regional jurisdictions like the EU had, had some variant of a of a taxonomy in place. And, and I think that that will continue to see that kind of driving forward. And then and then the the last specific policy I'm gonna call out, was, the proposed EU Industrial Decarbonization Act. And I found this one really interesting because it so it it kind of creates a a mechanism for, for companies to innovate and and find financing for decarbonization actions within the EU, as a means to continue on on their very progressive drive towards decarbonization, without, you know, breaking competition for for, high emitting industries in the EU. So what to me, what that implies is a shift from where we've always focused more on the transparency side, on the on the reporting side to actually driving real world, decarbonization investments and and and actions on the ground, which I I I'm very pleased to see, and we'll you know, I think that that's one to keep an eye on, see where where where that lands. So those are just a a few of the key ones I wanted to call out, but, you know, I've been I've been giving my blah blah to Donato. You know, what what are some of the you know, what what do you read into these trends, and, what what would you call out? I mean, you know, I agree very much with with with your reading of this, especially thinking about what you said before. You know, if we if we go if we go, beyond or behind the headlines, you know, we're talking about recession or, you know, is that the date the data is not is not suggesting that. Or, you know, talking about the great recession is too much of of a simplification of of of reality. As a matter of fact, it seems that the the picture is way more layered and fragmented, which means that it's probably a riskier landscape, to to navigate, right now. And definitely thinking of this landscape as, oh, there's just less to do or there are less requirements, so the requirements are simply being watered down. It's actually a a a a a very risky position to be, to be in a very risky mindset, to be in. What what, what I would also like to point out in addition to, you know, what what, what you highlighted is that it's interesting to see the the pressure on finance is still there. Right, all these policies on climate finance integration and, ESG data and ratings as well. And then we'll we'll we'll we'll show some of them, as well. You can also as as Ian said, you can download our quarterly policy briefing if you if you want to get a deep dive in those. Now if I if I think about the what happened with the EU green deal, like, all of that, it was triggered by the EU sustainable finance action plan. In other words, you know, certain key regulations such as the taxonomy or even even CSRD were born because there there were certain requirements to finance or financial markets, and that created the demand for certain type of of of information and behavior. Now if we see that the pressure on financial markets is actually not easy now, it's actually tightening up, then we can expect these requirements to trickle down to corporates at some point again. So it may be that there will be another wave of of requirements, for companies, reflecting these additional additional, demands for for financial markets. Yep. And, I mean, just quickly to to dovetail on that. Again, we've seen a lot of the the kind of regulatory push, slowing down a bit between omnibus and and the Trump administration, etcetera, etcetera. But I think in conversation with a lot of our clients, what what we continue to hear is that the investor demand remains real that, you know, if even if the the regulatory driver to continue propelling forward has been put on pause for for some companies or there is that that uncertainty that we saw reflected in in the previous poll results. There's there's still, others other stakeholders that require the same level of transparency and information and and expect real progress, whether that's investors, whether that's other companies and that you're part of their supply chain or they're part of yours. So, you know, I I think that, some of that that will will continue to see kind of percolating through, as you said, from from the the finance side, and I'm interested to see where that goes. Great. So moving on, let's focus on the ESG policy timelines. So we have two timelines that we will look at, we will look at today. So the first one is the timeline of EU developments in, in in in in q two in q two. Obviously, a lot of attention was, was around the process of ESRS simplification as a result of, you know, the omnibus revision process of, CSRD. I believe everybody in, joining this call, has probably seen the, draft revised ESRS, launched at the end of of July and now open, for, for consultation. We have a dedicated webinar, coming on these, the second week of, of September with, Jeremy Osborn, from AAICPA. So we'll we will unpack, the the ESR certification there and try to answer, you know, probably the toughest question, which is, is is there any simplification for real or just a name, in the title? So I don't want to spend too much time, on, on that. I think, the EU is shifting, a bit the scope of their ambition, especially on, you know, due diligence and and and and reporting. But, again, also in this case, we can see that the focus on financial markets is not really slowing down with a couple of initiatives that, occurred in in between May and and June. So for example, the consolidation of on on ESG ratings or, the consolidation on ESG risks for banks, that, you know, still keep up that pressure on on on financial markets that that we mentioned when we made reference, before. Obviously, another big element, to, to to keep on the radar is the implementation transposition at a national level of the stop the clock, directive. We have we have trackers, for that as well to see, you know, to what extent stop the clock, as, has been, implemented by member states. Again, the, the deadline is 12/31/2025. This is particularly important transposition, especially for, those, those companies that, you know, where where where we will need to publish a report next year if their member state does doesn't doesn't adopt, the, the directive. So this is a bit the landscape in, in, in in in the EU, but we also wanted to open a bit, the conversation, to other areas. So if we think, stateside, Ian, what what do you think are the most or is the most representative development of this q two stateside? Yes. The the golden question. Well, you know, if I if I reflect on our federal administration in in q one, it was a a slew of executive orders that were targeting, you know, climate, targeting DEI. We did just put put out, an interesting piece of thought leadership. Also, for those on Harbor, take a look on on how US companies responded to this DEI push in their latest, regulatory filings. But in in q two, what we saw was was, a bit more structural at the federal level. So, we had the the one big beautiful bill act, that, you know, took away some of the the the progressive elements of the IRA. We also had, some rollbacks of the Clean Air Act and and specifically for power producers, kind of taking away the the the element of of GHG emissions from, from from US power producers. But then at the state level, we still see a lot of progress and I think that that's the the takeaway to to kind of get here. It does, however, point to that that fragmentation that you were mentioning before for for US companies. There there are different different state regulations that sometimes, don't align terribly well and and might even be at odds with federal regulation. So the one I'll specifically call out is, the cal recycle draft regulations on the plastic pollution prevention and packaging producer responsibility act, SB 54. So, that one is is part of the broader, approach to extended producer responsibility that we've I think we've seen adopted at many states in The US, but then also globally, we've seen this big push for EPR. And this comes against the backdrop of also, you know, a failed negotiation for, a plastic ban just earlier this month, a cup couple weeks ago. So I think that we'll continue to see this push for extended producer responsibility and shifting shifting the focus from from kind of waste management and recycling into, how do we how do we rethink the entire circularity of, of this and and also get companies to to take responsibility for for for their actions. So I think that that Calvert Cycle one is, is is another interesting development on that front and one to one to watch out for. But, Donato, you you are actually you're not on my in my country, nor are you in EU. You are you are on e the Brexit Islands, and sitting comfortably in London. So what's, like, what's going on on The UK side, and how are they how are they lining up with everything that's taking place in Brussels? So I, I, I actually think that The UK has a very smart position when it comes to, policy making in this area. Because, essentially, they they they, operate as the second mover. Right, they they let the EU, carry the lead, of, you know, some very progressive policies from taxonomies to, you know, disclosure requirements, and all of that. And they learn very fast before, implementing anything. So, you know, the EU is often, making some bold decisions that, you know, fire back, and, you know, the omnibus is probably a consequence of that. But The UK is is is pays a lot of attention, you know, in in avoiding some some of these pitfalls and, you know, taking taking heed of of the early lessons, from this. So, of course, there is, The, UK is gonna be the reporting standard consultation, right now, for those of you that are not up to speed, with with the latest developments in The UK. You the UK government, endorsed, the ISSB, standards, but they're all all also creating their own, version of it, just like we have in Japan, Canada, Australia, and and and and other jurisdictions. And right now, they they they launched a public consultation to see how, the these these new version, actually, is is received by by the market is if it is okay as it is or it needs some changes. Notably, there will be a separate consultation on, the applicability and the enforcement of these these new standards. So the first consultation that is going on right now is really about the content. So what what the standards are are are requiring to disclose, which by the way is is both s one, so the the general disclosure standards as well as to, the, the the climate the climate standard. And besides that, we we see, you know, a combination of initiatives that very much reflects the kind of initiatives that we've seen so so far. So there is the revision of the, UK stewardship code. So a lot of, you know, governance in in, in in that respect. The PRA consultation on, updated climate risk expectations. So we have the financial market side, there and, The UK carbon, carbon border adjustment mechanism, the the CBER, which is another interesting trend that, the EU initiated. Right? We we we also mentioned at the beginning this interesting intersection of, you know, climate and sustainability policy and, and international trade, right now. That is definitely something, to, to keep an eye on. Right. So this this covers, a bit what happened in in in q two in terms of, you know, timeline of of of developments. Yep. And and I I before we move on, I'd I I would be remiss if I didn't say Donato will be back tomorrow for a webinar digging into all things ISSB, with with an ask me anything with our colleague, Meeva. So, join us tomorrow as well for him. Thank you. Thank you, Ian. Now let's have a look, you know, a bit with a crystal ball, let's say, timeline of key regulation coming into force in q three and q four twenty twenty five. So now we have a a bit of a, more more global perspective, here. So, Ian, what's what's notable here? Yep. I mean, there there are just a couple trends I'll call out. I'm not gonna go through kind of piece by piece. But, you know, what what I think is, relevant, we still see a lot of of data privacy and and information security regulations coming out, and that was a trend we also identified, you know, a couple years ago. At at The US state level, there's been a lot of focus on that and and still some states catching up. We can see, a few of those on on the timeline here. I think another one, to to watch out for is gonna be the AI regulations. So we have first the the China AI content labeling, that's that's coming online in just next month. So that's gonna be relevant for the companies that are either operating in China or doing business with Chinese companies on on how that AI content labeling actually takes effect. But then the the really interesting one for me is gonna be, the start of of next year, We have the the California AI Transparency Act. And, given kind of how ubiquitous AI is these days and, how many, like, just across the economy, companies are leveraging AI in different ways in in providing their services, creating products, etcetera, etcetera. So this is really how are you using AI, and and brings to fold some of the AI governance elements into so I think that that one is is going to be definitely one to keep on the radar and one to watch as kind of a a a bellwether as well for, for whether California can can do this successfully and what that means for other types of AI regulation moving forward. Anything anything jumping out at you that that I didn't cover for for kind of, the the next half of the year? Well, I mean, it's it's not it's not on this, on on on this timeline, but, obviously, all all eyes will be on the, hopefully, the the final episode season finale of of the omnibus soap opera. We we're we're kind of soft promised, a a wrap up by the end of the year, just to understand, you know, how to plan for for the activities next year. I mean, that speaking with with with different people in in Brussels, that still seem a long shot. However, there there is a path there. Different committees in the European Parliament have some key votes scheduled for for for October. So there is a chance that we could actually, get some clarity, by by the end by the end of the year. So we we'll definitely, look forward, to that and hope for the best. And the other What's you're busy. Of course. Maybe maybe doing the work instead of, obsessing over policy making. And then and then the the other one I'm I'm following quite closely is obviously, what's happening in California with the climate disclosure regulation. So CARB hosted a very interesting workshop, last, last week with some, key insights in terms of application for both s b two five three, two six one. What I found particularly interesting is that they're, they're quite, adamant on maintaining the current, deadlines for reporting, which means that companies falling into scope, willing to publish their climate risk report, by January 1, 2026, which means that, you know, the the essentially, all the all the good stuff about climate, risk analysis, scenario analysis, and so on needs needs to be needs to be done. And I look forward to seeing, some of of of the outcomes of, of these regulation, to be honest. Yep. And I on that because I have lots of questions from from our US clients on this. And I I would just add, you know, they the the the interoperability side of things, they make it very clear that if you have done TCFD reporting, if you are reporting on s two, all of that covers you for for for the the card work. So, these aren't kind of mutually exclusive things, and it's like California is expecting something different from ISSB, is expecting something different from ESRS. They all they are they are all meant to to work together and require, you know, much the same information. So just wanted to to chuck that in while, while we're on the topic. Now we are quickly chomping through time, Donato, and, and I think we we we do need to move on, though. Yes. Exactly. So let's let's go to our, pool, number number two and maybe launch dot. We can look at the results as we go. So the second poll is, how robust is your current, regulatory monitoring process? It's very robust but resource intensive, so there is an efficiency problem, there. It's unstructured, and so, the need to improve it. So, typically, when when I when I talk with clients, a lot of them say, well, you know, we read different newsletters. We, we actually go to conferences. We talk to people, but they don't feel very comfortable about about that. And efficient and comprehensive, and we're not missing anything or none of the above. So let's see. And I I think, I think this poll question aligns very closely with with some of the key takeaways that we had, off of the the back of the q two developments. The first was, you know, we're we're Datamaran. So, obviously, we we we need to focus on materiality, embed materiality in strategic foresight. Right? It's a it's a tool, to to help you understand what's most relevant and, and stay on top of that that evolving landscape, regulatory, peer developments, etcetera. Strengthen your ESG governance and internal capabilities. I think that that one is is another kind of evergreen. Enhanced ESG data integrity and readiness for scrutiny while there's been some delay in some of the reporting side of things, then, you know, there's still there's still the issue of the current requirement in a lot of this, and and the expectation is still there. And then as Donato mentioned, plan for for divergence in, global ESG policy development. So, I think that that this fragmentation, you know, it it'll be interesting to see how this plays out for for corporates and what this means. So if we could stop stop sharing this poll, and then, Donato, if if you wanna just, give us some last wrap up, I think we have, twenty three seconds to go. So, maybe we can just flash up the the harbor side of things. For folks that haven't haven't joined harbor yet, there's a QR code, if we can get that up to Donato. Yep. We have here, Arba. So can you can you see can you see the screen? Yes. So, as mentioned at the beginning, Adore is our, latest, addition to our, solutions. And it's it's a community platform, where you can get insights, like the ones that we presented today, as well as invites to exclusive events, networking opportunities, regulation and policy updates. We we have, a number of, events for members coming up. And in particular, for the next Thursday, we'll be quite busy. This Thursday, there is the ISSB deep dive, coming in with me and and Neva. September 4, we are doing a deep dive on the sustainability job market, with, Lottie. And, Thursday, September 11, we're we're we're looking at the ESRS revision, with, AICPA. And then on September 23 would be, New York City Climate Week, with some, events exclusive to, the members of the community. Anything to add, Ian? Nope. Not nothing to add to Donato, and I think we've we've overrun by a minute. So, yeah, just a thank you to everybody for attending today. We have some resources available for download. If you go to the doc section of, of Goldcast here, you can download some of those. We hope to see you on harbor, and and join us in the conversations there. And then upcoming webinars and and live events, you know, we're we're we're always around and excited to meet folks. So, thank you for for your time today, and see you next time. Thank you all. See you next time.