The government of Germany has just announced that they will implement "new sustainability reporting obligations for companies." This is similar to the new initiative announced by the SEC, and reflects the general impetus among governments to focus on new regulatory requirements concerning climate change in the area of financial disclosures.
This general trend amongst regulators across jurisdictions of requiring such disclosures also suggests a corollary conclusion--it is highly likely that decisions by one regulator will inform the positions and rules adopted by another. So, for example, the SEC is delayed compared to several of its European counterparts in devising such regulations--and so in order to understand what the SEC may do, it is likely useful to look at Europe (e.g., the UK) for guidance.
Although the focus on climate change and sustainability as a significant component of regulatory financial disclosures is relatively novel, it definitely appears to be a "go to" tool in the regulatory toolbox at the moment. Companies will need to be aware of the changing regulatory environment in this area as they navigate governmental requirements.
Today the federal cabinet adopted the first German Sustainable Finance Strategy. The goal of the strategy is to mobilise investments that are urgently needed for climate action and sustainability while also addressing the climate risks that are increasingly relevant to the financial system. Germany’s Sustainable Finance Strategy is setting a new course in the financial system based on the core themes of climate action and sustainability. The federal government is thereby developing Germany into a leading sustainable finance location. The ground-breaking set of measures includes redirecting federal investments into sustainable forms of investment, sustainability labelling for consumers (sustainability “traffic light” labels) and new sustainability reporting obligations for companies.
