Sustainable (ESG) Finance and Law

About

Environmental, Social and Governance (ESG) considerations are prominent in the financial industry, playing a pivotal role in determining access to capital and market competitiveness. Pension funds, banks, insurance companies, and other asset managers are increasingly prioritising funds for companies with robust ESG practices.

The financial regulatory landscape companies (including funds and financial institutions) need to navigate in is rapidly changing and becomes more complex as the stakes are increasing. ESG is no longer a nice to have, but a must have. In the first lecture of this Course will be explained what ESG actually is and what the connection is with the EU action plan.

European regulations like the EU Sustainable Finance Disclosure Regulation (SFDR) and EU Taxonomy Regulation (the Taxonomy), oblige financial market participants to identify their sustainability ambitions, classify products accordingly and adhere to transparency requirements associated with the relevant classification. Ensuring compliance with these frameworks requires these parties to gather relevant ESG data, establish effective reporting mechanisms and fulfil disclosure requirements. The effective reporting mechanisms result from regulations like the EU Corporate Sustainability Reporting Directive (CSRD) and EU Corporate Sustainability Due Diligence Directive (CSDDD). This course will explain the structure of - and interaction between the aforementioned regulations and give a high-level overview of the obligations imposed on in-scope companies. In addition to the basics, we will zoom in on the developments within the sustainable finance market and look at lessons learned about the application of the regulatory framework. We will discuss what forms of sustainable finance products are available against the backdrop of the Paris Agreement: how to finance the transition to becoming net zero in 2050. What is becoming the new norm?

Lastly, we will also touch upon a few more specialised subjects, being the challenges for small and medium sized enterprises when obtaining sustainable financing and ESG litigation risks. In recent years, significant momentum has been gained in global climate change and human rights violation litigation. Individuals and interest organizations actively seek legal remedies and demand accountability from governments, companies and their directors. Corporate behaviour, especially in respect of ESG issues, is under increased scrutiny from investors, shareholders and third parties. This trend is expected to intensify soon with the strengthening of ESG regulations and a rise in class action litigation. ​The most recent example is the judgement of the Court of Appeal of The Hague ruled in appeal in the Dutch climate case between Friends of the Earth Netherlands (Milieudefensie) v. Shell Plc (Shell). Court of Appeal confirmed that Shell Plc has a duty of care to reduce its greenhouse gas emissions to combat dangerous climate change. However, other than the District Court in first instance, the Court of Appeal partially ruled that the court cannot impose Shell to reduce its greenhouse gas emissions with specific percentages.

Course leader

Dr. Wilco J. Oostwouder

Fee info