#ESG disclosure securities law

[nationallawreview]

Caremark Liability Following the SEC’s New ESG Reporting Requirements

Caremark Liability Following the SEC’s New ESG Reporting Requirements

Recent developments in the Court of Chancery concerning a corporate board’s duty to monitor and provide oversight over a corporation’s operations, so-called Caremark claims, are likely to intersect with the Securities and Exchange Commission’s (“SEC”) proposed new ESG disclosure obligations to create a new category of corporate risk.  In this article, we discuss the recent trends in Delaware law…

[abigailspinach]

Conservative activist launches $1bn crusade to ‘crush’ liberal America

Leonard Leo was architect of effort to secure conservative supermajority on the Supreme Court

https://www.ft.com/content/0b38aaed-ec58-40cd-9047-0c7b7b83164a

The conservative activist who led the crusade to overhaul the US legal system is making a $1bn push to “crush liberal dominance” across corporate America and in the country’s news and entertainment sectors. In a rare interview, Leonard Leo, the architect of the rightward shift on the Supreme Court under Donald Trump, said his non-profit advocacy group, the Marble Freedom Trust, was ready to confront the private sector in addition to the government. “We need to crush liberal dominance where it’s most insidious, so we’ll direct resources to build talent and capital formation pipelines in the areas of news and entertainment, where leftwing extremism is most evident,” Leo told the Financial Times.

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“Expect us to increase support for organisations that call out companies and financial institutions that bend to the woke mind virus spread by regulators and NGOs, so that they have to pay a price for putting extreme leftwing ideology ahead of consumers,” he said. Leo has spent more than two decades at the influential Federalist Society, guiding conservative judges into the federal courts and the Supreme Court itself. In 2018, conservative justice Clarence Thomas joked that Leo was the third most important person in the world. Leo’s efforts culminated under Trump’s presidency, when three Federalist Society-backed judges were appointed to give conservatives on the Supreme Court a 6-3 supermajority, and profound influence over US law. The court has since then ruled to overturn the right to an abortion, among other long-sought rightwing causes. In 2020, after Trump lost the election, Leo stepped back from running the daily operations of the Federalist Society, while remaining its co-chair. The following year, Leo founded Marble, with a $1.6bn donation from electronic device manufacturing mogul Barre Seid, to be a counterweight to what he said was “dark money” of the left. He spent about $600mn in its first three years, according to public financial disclosures. Leo said his goal was to find “very leveraged, impactful ways of reintroducing limited constitutional government and a civil society premised on freedom and personal responsibility and the virtues of western civilisation”. The $1bn money machine is now funding the conservative mission against private institutions, opposing diversity, equity and inclusion policies, climate and social concerns in investing and the “debanking” of politically conservative customers, in addition to taking on the public sector. The non-profit is increasingly interested in launching campaigns against “woke” banks and China-friendly companies involved in everything from food production to autonomous vehicles in the US and potentially Europe. Leo also intends to invest in a US local media company in the next 12 months, although he has not decided which, and is building conservative coalitions through groups such as Teneo Network, a club with chapters across the country. He also confirmed that Marble had since 2021 helped fund organisations that launched campaigns against companies with DEI, ESG and other initiatives, including BlackRock, Vanguard, American Airlines, Coca-Cola, State Farm, Major League Baseball and Ticketmaster. This year, Marble aided a variety of conservative groups in their campaigns against TikTok on the grounds that it was a threat to children and US national security. President Joe Biden signed a bipartisan bill to force TikTok’s Chinese parent company to divest from the video-sharing platform.

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Leo’s rise to be among the US’s most powerful conservatives has drawn scrutiny from liberal attorneys and Democratic politicians. Earlier this year, he refused to comply with a subpoena from Senate Democrats investigating undisclosed gifts to Thomas and Justice Samuel Alito revealed by ProPublica. In 2020, Leo joined the for-profit public advocacy firm CRC Advisors. Bloomberg has reported that an array of non-profits have paid CRC at least $69mn since Leo became its co-owner and chair. While Marble funds Trump-aligned advocacy groups, it is not donating money to sway the 2024 presidential election, Leo said. The non-profit is instead helping the Republican effort to end the Democratic majority in the Senate, which confirms judges and justices. “The political environment is more topsy-turvy and more uncertain than it’s ever been in my lifetime,” said Leo. “Political investing is not as good a bet as it used to be.”

[foxnangelseo]

Investment In India: Sustainable Practices for 2024

India, with its vast market potential and growing economy, continues to be an attractive destination for investors. However, as the global focus shifts towards sustainability, the importance of sustainable practices in investment decisions has never been higher. The Indian government and private sector are increasingly embracing sustainable practices to promote long-term economic growth, environmental protection, and social well-being. In 2024, India is making significant strides in integrating sustainability into its investment framework. This blog explores the sustainable practices that are shaping investment in India and highlights the role of Fox&Angel, a leading advisory firm, in facilitating sustainable investments.

The Growing Importance of Sustainable Investment

Sustainable investment, often referred to as Environmental, Social, and Governance (ESG) investing, considers the ethical impact and sustainability of investments alongside financial returns. Investors are increasingly recognizing that sustainable practices are essential for long-term profitability and risk management. In India, the shift towards sustainable investment is driven by several factors:

1. Regulatory Push: The Indian government is implementing regulations that promote sustainability, such as stricter environmental laws and corporate governance standards.

2. Market Demand: Consumers and businesses are becoming more environmentally conscious, driving demand for sustainable products and services.

3. Global Trends: International investors are increasingly favoring companies with strong ESG credentials, influencing Indian companies to adopt sustainable practices.

Regulatory Framework Supporting Sustainable Investment

1. Corporate Social Responsibility (CSR)

India is one of the first countries to mandate Corporate Social Responsibility (CSR) spending. Under the Companies Act, 2013, certain companies are required to spend at least 2% of their average net profits from the preceding three years on CSR activities. This legislation encourages companies to invest in social and environmental projects, fostering sustainable development.

2. SEBI’s ESG Guidelines

The Securities and Exchange Board of India (SEBI) has introduced guidelines for ESG disclosures, requiring listed companies to report their ESG performance. This move aims to enhance transparency and enable investors to make informed decisions based on a company's sustainability practices.

3. Renewable Energy Policies

India has set ambitious renewable energy targets, aiming to achieve 450 GW of renewable energy capacity by 2030. The government offers various incentives, including tax benefits, subsidies, and low-interest loans, to attract investment in renewable energy projects. These policies are driving significant investments in solar, wind, and other renewable energy sources.

Key Sectors for Sustainable Investment

1. Renewable Energy

India's commitment to renewable energy presents a lucrative opportunity for investors. The country’s favorable policies, combined with its abundant natural resources, make it an ideal destination for investments in solar, wind, and biomass energy projects. Companies investing in renewable energy are not only contributing to environmental sustainability but also benefiting from long-term financial returns.

2. Sustainable Agriculture

Agriculture is a critical sector in India, providing livelihoods for a significant portion of the population. Sustainable agricultural practices, such as organic farming, precision agriculture, and water conservation techniques, are gaining traction. Investing in sustainable agriculture helps improve food security, reduces environmental impact, and supports rural development.

3. Green Buildings and Infrastructure

With rapid urbanization, there is a growing demand for sustainable infrastructure and green buildings in India. Green buildings use resources efficiently, reduce energy consumption, and provide healthier living environments. Investment in sustainable infrastructure, such as smart cities and eco-friendly transportation, is crucial for achieving long-term sustainability goals.

4. Waste Management and Recycling

Effective waste management is a pressing issue in India. Investments in waste management and recycling technologies can address environmental challenges while creating profitable business opportunities. Companies focusing on recycling, waste-to-energy projects, and sustainable packaging solutions are at the forefront of this sector.

Role of Fox&Angel in Promoting Sustainable Investment

Fox&Angel, a renowned advisory firm, plays a pivotal role in promoting sustainable investment in India. The company offers a range of services designed to help investors navigate the complexities of sustainable investing and maximize their impact. Here’s how Fox&Angel is making a difference:

1. ESG Advisory Services

Fox&Angel provides comprehensive ESG advisory services to help investors integrate sustainability into their investment strategies. The firm conducts ESG assessments, identifies material ESG risks and opportunities, and develops customized sustainability frameworks for its clients. This ensures that investments align with global best practices and deliver long-term value.

2. Impact Investing

Fox&Angel specializes in impact investing, which focuses on generating positive social and environmental outcomes alongside financial returns. The firm identifies and evaluates impact investment opportunities, particularly in sectors such as renewable energy, sustainable agriculture, and affordable housing. By facilitating impact investments, Fox&Angel supports projects that contribute to India's sustainable development goals.

3. Green Finance Solutions

Recognizing the need for innovative financing solutions, Fox&Angel offers expertise in green finance. The firm assists clients in structuring and raising capital for sustainable projects through green bonds, sustainability-linked loans, and other financial instruments. These solutions provide the necessary funding for projects that drive environmental and social benefits.

4. Corporate Sustainability Strategies

Fox&Angel works with companies to develop and implement robust corporate sustainability strategies. The firm helps businesses set ESG goals, improve sustainability reporting, and enhance stakeholder engagement. By fostering a culture of sustainability, Fox&Angel enables companies to build resilient and responsible business models.

5. Advocacy and Thought Leadership

As a thought leader in sustainable investment, Fox&Angel engages in advocacy and knowledge-sharing initiatives. The firm collaborates with industry bodies, participates in policy discussions, and conducts research on emerging sustainability trends. Through these efforts, Fox&Angel contributes to shaping the sustainable investment landscape in India.

Investing in India in 2024 means aligning with a market that is increasingly focused on sustainability. The regulatory framework, combined with growing market demand and global trends, is driving the adoption of sustainable practices across various sectors. Investors have numerous opportunities to contribute to India's sustainable development while achieving long-term financial returns.

Fox&Angel stands out as a key enabler of sustainable investment in India. Through its ESG advisory services, impact investing expertise, green finance solutions, and corporate sustainability strategies, the firm is helping investors make informed and impactful decisions. By partnering with Fox&Angel, investors can navigate the complexities of sustainable investing and play a role in building a more sustainable and prosperous future for India.

Invest in India today, and be part of the transformation towards a sustainable and inclusive economy.

This post was originally published on: Foxnangel

[gauravmohindrachicago]

Demystifying Banking and Finance Law in the United States: A Comprehensive Guide

Banking and finance law in the United States constitutes a complex regulatory framework that governs the operations of financial institutions, protects consumers, and ensures the stability of the financial system. From banking regulations to securities laws, understanding this intricate legal landscape is essential for financial institutions, investors, and consumers alike. In this blog post, we’ll delve into the key aspects of banking and finance law in the U.S., shedding light on its significance and impact on the financial sector says, Gaurav Mohindra.

Overview of Banking and Finance Law

Banking and finance law in the United States is a multifaceted domain that encompasses various statutes, regulations, and regulatory agencies. Some of the primary areas covered by banking and finance law include:

Banking Regulation:

Federal laws such as the Banking Act of 1933 (Glass-Steagall Act), the Federal Reserve Act, and the Dodd-Frank Wall Street Reform and Consumer Protection Act regulate the operations of banks and financial institutions, including requirements for capital adequacy, lending practices, and consumer protection.

Securities Regulation:

The Securities Act of 1933 and the Securities Exchange Act of 1934, administered by the Securities and Exchange Commission (SEC), govern the issuance, trading, and disclosure of securities in the U.S. capital markets, aiming to ensure transparency, fairness, and investor protection.

Consumer Protection:

Laws such as the Truth in Lending Act (TILA), the Fair Credit Reporting Act (FCRA), and the Consumer Financial Protection Act (CFPA) safeguard consumers by regulating lending practices, credit reporting, debt collection, and other financial transactions.

Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF):

The Bank Secrecy Act (BSA) and regulations issued by the Financial Crimes Enforcement Network (FinCEN) impose requirements on financial institutions to detect and prevent money laundering, terrorist financing, and other illicit activities.

Key Regulatory Agencies

Several regulatory agencies oversee and enforce banking and finance law in the United States, including:

Federal Reserve System (Fed):

The central banking system of the United States, responsible for monetary policy, bank supervision, and financial stability.

Office of the Comptroller of the Currency (OCC):

Regulates and supervises national banks and federal savings associations, ensuring the safety and soundness of the banking system.

Federal Deposit Insurance Corporation (FDIC):

Insures deposits in banks and thrift institutions, supervises insured depository institutions, and resolves failed banks.

Securities and Exchange Commission (SEC):

Regulates securities markets and protects investors by enforcing federal securities laws and overseeing securities exchanges, brokers, and investment advisers.

Consumer Financial Protection Bureau (CFPB):

Protects consumers by regulating financial products and services, enforcing consumer protection laws, and promoting financial education and empowerment.

Emerging Trends and Challenges

The landscape of banking and finance law in the United States continues to evolve in response to emerging trends and challenges, including:

Fintech Innovation:

The rise of financial technology (fintech) introduces new challenges related to regulation, cybersecurity, data privacy, and competition, requiring regulatory agencies to adapt and innovate.

Cybersecurity and Data Protection:

Financial institutions face increasing cybersecurity threats and regulatory scrutiny concerning data protection, prompting investments in cybersecurity measures and compliance efforts.

Climate Risk and ESG Integration:

Growing awareness of climate change and environmental, social, and governance (ESG) factors prompts regulators and financial institutions to incorporate sustainability considerations into their risk management and investment strategies.

Digital Assets and Cryptocurrencies:

The proliferation of digital assets and crypto currencies raises questions about regulatory oversight, investor protection, and financial stability, leading to efforts to develop comprehensive regulatory frameworks.

Gaurav Mohindra: Banking and finance law form the bedrock of the U.S. financial system, providing the legal framework that governs the operations of financial institutions, protects consumers, and fosters investor confidence. As the financial landscape evolves and new challenges emerge, staying abreast of regulatory developments and compliance requirements is crucial for navigating the complexities of banking and finance law in the United States. By understanding the legal landscape and adhering to regulatory requirements, financial institutions and stakeholders can foster a safe, fair, and resilient financial ecosystem for the benefit of all.

Originally Posted: https://gauravmohindrachicago.com/demystifying-banking-and-finance-law-in-united-states/

[grcessentials]

Exploring the Vital Role of Assurance Services in Modern Business

In today's rapidly evolving business landscape, where stakeholders demand transparency, accountability, and reliability, assurance services play a pivotal role in instilling confidence and trust. These services encompass a range of activities aimed at providing independent and objective assessments of financial statements, internal controls, compliance processes, and other critical aspects of an organization's operations. As businesses navigate complex regulatory requirements, technological advancements, and global economic uncertainties, the need for robust assurance services has never been more pronounced.

At its core, assurance services are designed to enhance the credibility and reliability of information disclosed by organizations. This is particularly crucial in financial reporting, where stakeholders, including investors, creditors, regulators, and the public, rely on accurate and transparent financial information to make informed decisions. Assurance engagements, such as audits, reviews, and compilations, are conducted by qualified professionals who examine financial statements and related disclosures to provide assurance on their fairness, accuracy, and compliance with relevant standards.

However, the scope of assurance services extends beyond financial reporting to encompass various non-financial areas that are equally vital for organizational success. For instance, assurance engagements may focus on assessing the effectiveness of internal controls, risk management processes, and corporate governance structures. By evaluating the reliability and integrity of these systems, assurance professionals help organizations identify weaknesses, mitigate risks, and improve overall performance.

In the realm of sustainability and corporate responsibility, assurance services play a critical role in verifying the accuracy and completeness of environmental, social, and governance (ESG) disclosures. With growing pressure from investors, consumers, and regulators for companies to operate in a sustainable and socially responsible manner, independent assurance provides assurance that ESG information is credible and reliable. This not only enhances transparency but also fosters trust and accountability in corporate sustainability initiatives.

Moreover, assurance services contribute to enhancing cybersecurity resilience by evaluating the effectiveness of information security controls and protocols. In an era of heightened cyber threats and data breaches, organizations must demonstrate their ability to safeguard sensitive information and maintain the confidentiality, integrity, and availability of data. Assurance engagements help organizations identify vulnerabilities, assess their cybersecurity posture, and implement measures to mitigate risks and strengthen resilience.

Furthermore, assurance services support regulatory compliance by ensuring that organizations adhere to relevant laws, regulations, and industry standards. Whether it's in the realm of financial services, healthcare, or data privacy, compliance requirements continue to evolve, posing significant challenges for organizations to navigate. Assurance professionals provide independent assessments to verify compliance with regulatory mandates, identify gaps, and recommend remedial actions to mitigate compliance risks.

In conclusion, assurance services play a multifaceted and indispensable role in modern business by providing independent and objective assessments that enhance transparency, credibility, and trust. From financial reporting and internal controls to sustainability, cybersecurity, and regulatory compliance, assurance professionals contribute to the integrity and resilience of organizations in an increasingly complex and interconnected world. As businesses strive to meet the expectations of stakeholders and uphold their reputations, the importance of robust assurance services cannot be overstated.

[tsmom1219]

The SEC’s final climate disclosure rule must respond to emerging legal risks

Read the full story at the Climate Law Blog. It has been more than a year and a half since the Securities and Exchange Commission (SEC) proposed its climate-related disclosure rule. In the interim, lawsuits in the ESG and regulatory space have constricted the SEC’s path to promulgating a final rule that will survive judicial review. This blog post explores how the litigation landscape has…

[mostlysignssomeportents]

The SEC must not legitimize fake "carbon offsets"

Later this month, the SEC will release its “climate disclosure rule,” which could be a turning point for the carbon offset “market,” which is a presently a dumpster fire of accounting fraud, lies, and moral hazard:

https://news.bloomberglaw.com/esg/green-groups-want-offsets-included-as-part-of-secs-climate-rule

It’s not clear whether the Commission will actually tackle offsets, and if they do, it’s not clear whether they’ll do so well. Certainly, the business lobby has pulled out all the stops to make sure that offsets remain a tool for greenwashing and carbon laundering.

But they really should act. As The Revolving Door Project’s Dylan Gyauch-Lewis and Hannah Story Brown write in “The Industry Agenda: Carbon Offsets,” if the unregulated securities sold as “offsets” actually do anything to forestall the climate apocalypse, it’s largely coincidental.

https://therevolvingdoorproject.org/wp-content/uploads/2022/03/Industry-Agenda_-Carbon-Offsets.pdf

This shouldn’t come as a surprise to anyone who’s paid attention. “Charities” like The Nature Conservancy have brought in $932m from selling “offsets” to plunderers like JP Morgan that don’t offset anything. For example, the Conservancy generated $2m worth of offsets for announcing it wouldn’t log the Hawk Mountain Sanctuary Association’s 2380 acres of Pennsylvania forest. But that forest was already a conservancy, and would never have been logged. The Conservancy’s pledge not to log it did nothing to reduce the Earth’s carbon emergency.

This is by design. The Conservancy pioneered greenwashing. As Conservancy president Patrick Noonan quipped, “The only problem with tainted money is there tain’t enough of it.”

https://pluralistic.net/2020/12/12/fairy-use-tale/#greenwashing

Even where offsets do have a credible claim of reducing the amount of carbon likely to be emitted, that claim is brittle and contingent. Last summer’s Bootleg Fire in Oregon consumed vast carbon offset forests, releasing carbon that someone had paid not to release:

https://pluralistic.net/2021/07/26/aggregate-demand/#murder-offsets

That possibility was foreseen by Oregon’s own forestry and climate experts — but the fossil fuel giants laundered some of the excess profits they got from cheap offsets to corrupt Oregon’s regulators and push through these new, useless offsets.

The whole business of offsets is grounded in denial — the denialist belief that markets can be forced to “internalize” the “externalities” of doing business. Using markets to address the climate emergency is like switching to light cigarettes after you discover that you have stage-four lung cancer.

Carbon offsets have been a market for lemons since the very beginning. It’s been more than a decade since the Christian Science Monitor described the market as a “Wild West…ripe for fraud, exaggeration, and poorly run projects that probably do little to ease global warming.”

https://www.csmonitor.com/Environment/2010/0420/Buying-carbon-offsets-may-ease-eco-guilt-but-not-global-warming

Offsets have only gotten worse since. Huge amounts of money have poured into “ESG” (“Environmental, Social, and Governance”) funds that are supposed to let you save for your retirement without forcing you to spend your twilight years in a flaming, uninhabitable wasteland.

ESG is where Gresham’s Law (“bad money drives out good”) meets greenwashing. The cheapest offsets to produce are the ones that do the least. Today, the offset market has been fully transformed into a “market for lemons” where the good products are the least desirable:

https://en.wikipedia.org/wiki/The_Market_for_Lemons

Writing for The American Propsect, Gyauch-Lewis summarizes his paper’s findings, showing how offsets are a form of colonialism, pushing the costs of fighting the climate emergency onto the poorest people in the world, who have contributed least to the emergency:

https://prospect.org/economy/sec-must-avoid-legitimizing-carbon-offsets/

Offsets are ripe for SEC regulation, thanks to the endless creativity of fraud that goes into the asset class: double-counting (multiple parties counting the same offset) and additionality (claiming an offset for doing nothing).

More pernicious is the problem of “suppressed demand”: where a project claims that it will address future pollution “based on assumed carbon emissions rather than actual carbon emissions.”

https://www.jstor.org/stable/43267673?read-now=1&seq=1#page_scan_tab_contents

The offset market is global, complex and growing. Offset market makers are able to use the dispersed, complex, high velocity nature of the sector to hide a multitude of sins from investors and regulators.

As Gyauch-Lewis points out, rendering the only known planet capable of supporting human life uninhabitable “poses a dire risk to the financial system,” placing it squarely in the SEC’s remit.

The measures that the offset industry are hoping to block are so commonsense and modest that the opposition tells you exactly how fraudulent the industry is.

requiring companies to report gross instead of net emissions,

identify all specific carbon offset projects they invest in to lower their net emissions, and

qualify emissions “prevention” vs emissions “reduction.”

By contrast, the ESG industry is lobbying for minimal disclosures of climate risk management, with no distinction between “prevention” and “reduction,” which will exacerbate the already ferocious integrity problem in offsets. It would pave the way for expensive boondoggles like carbon capture, a fossil fuel industry backed proposal that is too wimpy and expensive to address the emergency, by orders of magnitude.

https://insideclimatenews.org/news/09032022/carbon-capture-and-storage-fossil-fuels-climate-change/

These greenwashing projects have already absorbed $1b in public money from the Department of Energy, with nothing to show for it.

https://gizmodo.com/the-energy-department-blew-1-1-billion-on-carbon-captu-1848338427

The Infrastructure Bill pumps another $12.2b into the sector:

https://insideclimatenews.org/news/09032022/carbon-capture-and-storage-fossil-fuels-climate-change/

Without regulations of offsets, carbon capture could easily become the king of all offsets, doing nothing for the planet and allowing the unabated burning of fossil fuels.

Offsets have a problem, and that problem is applying market logic (what is the right price) to a human right (to have a habitable planet). As the Climate Ad Project’s brilliant 2021 video put it, a “carbon offset” makes as much sense as a “murder offset”:

https://pluralistic.net/2021/04/14/for-sale-green-indulgences/#killer-analogy

If there’s something companies shouldn’t do, then they shouldn’t do it. Selling indulgences won’t maintain a habitable planet fit for the human race.

Image:

Penguin Publishing Group (modified)

NASA (modified)

Parker Brothers (modified)

Unknown (modified)

Cristian Ibarra Santillan (modified) https://www.flickr.com/photos/cristian_ibarra_santillan/49595214931/

CC BY 2.0: https://creativecommons.org/licenses/by/2.0/

[rjzimmerman]

Excerpt from this article from the Center for American Progress:

On March 15, 2021, the U.S. Securities and Exchange Commission (SEC) released a request for comments on whether and how it should require companies to disclose information related to climate risks and other environmental, social, and governance (ESG) matters.  In May 2021, SEC Chair Gary Gensler confirmed that agency staff are developing enhanced climate-related and “human capital management” disclosures. The SEC’s actions follow more than a decade of growing investor demand for enhanced information from companies and financial institutions on these risks.

As a result of these developments, some companies, business representatives, and their political allies have raised questions regarding both the SEC’s authority to require such disclosures and the overall wisdom of imposing mandatory disclosures for ESG issues. Some have gone so far as to disregard securities laws and regulations to argue that the SEC could or should only require disclosure of information that is financially material to investors. If adopted, this radical rewriting of the SEC’s authority and materiality standard could reduce the level of information companies are required to disclose rather than address market participants’ need and desire for enhanced disclosures.

The SEC has the ability and responsibility to require disclosures, including ESG-related disclosures, that would further its mission to protect investors; promote more fair, orderly, and efficient markets; promote capital formation; and protect the public interest.

These responsibilities require the SEC to ensure that market participants have reliable, consistent, and comparable climate- and ESG-related information that is important to their business decision-making. The agency’s authority to require disclosures is not limited in any way by materiality, although the SEC and the courts may rely on this concept in specific, limited contexts. Moreover, what is material to investors today is broader than it has ever been.

[yourreddancer]

With quick fixes, Biden's agencies reverse Trump's Wall Street-friendly rules

Analysis-BY KATANGA JOHNSON, REUTERS - 11:32 AM ET 4/12/2021

WASHINGTON (Reuters) -U.S. President Joe Biden's interim regulators are wasting no time unraveling Wall Street-friendly measures introduced under former Republican President Donald Trump, using quick-fix legal tactics.

They have spiked or stalled more than a dozen contentious Trump-era measures that critics said eroded consumer protections, weakened enforcement, and curbed investors' ability to push for environmental, social and governance (ESG) changes.

Rather than embarking on the lengthy process of rewriting the rules, the agencies have in many instances used speedy legal tools, according to lawyers, consumer groups, and a review by Reuters. These include delaying unfinished rules, issuing informal guidance, rescinding old policy statements or issuing new ones, and choosing not to enforce existing rules.

The swift changes https://www.reuters.com/article/usa-biden-financial-regulators/factbox-how-bidens-agencies-are-picking-apart-trumps-wall-street-friendly-measures have set off alarm bells in the financial industry, which is having to adapt quickly to the tougher new regime, and set the stage for potential legal challenges down the road, said lobbyists and lawyers.

"The interim Democratic leadership for these agencies are moving very quickly to tackle the deregulatory policy shifts that occurred under Trump," said Quyen Truong, partner at law practice Stroock & Stroock & Lavan.

"The agencies' use of guidance and reversal of policy statements demands a quick turnaround of compliance for firms."

During the previous administration, Trump-appointed regulators eased dozens of rules they said were outdated and hurt jobs, drawing ire from Democrats who said the changes saved Wall Street billions of dollars while increasing risks and hurting consumers.

With a slim majority in Congress, Democratic lawmakers will struggle to repeal those rules, while delays to the presidential transition has left many nominees still awaiting confirmation nearly three months in.

That has put the onus on interim officials to start executing Biden's agenda to help Americans recover from the pandemic and to tackle social injustice and climate change.

Acting Securities and Exchange Commission (SEC) chair Allison Lee, for example, has been very active. She has returned power to senior enforcement staff, who had it stripped from them in 2017, to open probes without seeking senior approvals, and has reversed a 2019 policy that critics said made it too easy for companies that broke the rules to continue with business as usual.

She has also begun to reverse the Trump administration's assault on ESG investing with a new effort  to police misleading ESG disclosures.

The SEC said every decision was made with a view to ensuring "seamless leadership" in its mission to protect investors.

Likewise, the Department of Labor last month said it would not enforce  two rules finalized in the last months of the Trump administration which curbed investments and shareholder votes based on ESG factors. The agency did not respond to a request for comment.

And acting Consumer Financial Protection Bureau (CFPB) director Dave Uejio has not disappointed progressives who hoped he would fix policies they said undermined fair lending.

"We are taking a close look at previous policies that hampered the Bureau's effectiveness and simultaneously working nonstop through supervision and enforcement to ensure financial institutions are treating consumers fairly," Uejio said.

He has revoked policies that had undermined the agency's ability to punish companies for "abusive" behavior, and which had curtailed the supervisory department's power to tell companies what to do.

This month, Uejio delayednew debt collection rules which consumer groups said would do more harm than good, while Reuters has reported  that the CFPB is exploring overhauling the country's credit reporting system.

Uejio said he plans to focus on more COVID-19 relief and racial equity measures.

"We've already seen financial agencies, most notably the consumer watchdog, take the hatchet to some of the worst Trump-era policies," said Ed Mierzwinski of consumer advocacy group PIRG.

PUSHBACK

Republicans, though, say the changes create legal uncertainty and could cause companies to pull back from lending. U.S. Senator Pat Toomey, the top Republican on the Congressional panel that oversees financial agencies, said in a statement that the changes would "slow economic growth."

And hastily reversing rules and policies without going through a formal review process could risk litigation, said Brian Johnson, a partner at Alston & Bird and formerly CFPB deputy director.

Still, lawyers said they were advising clients to adapt quickly, as permanent appointees were unlikely to change course.

"Consumers cannot wait for help," said Uejio. "They need us now.

(Reporting by Katanga Johnson in Washington; Editing by Michelle Price and Matthew Lewis)

[sounmashnews]

[ad_1] Larry Fink, chief govt officer of BlackRock Inc.Christopher Goodney | Bloomberg | Getty ImagesBillionaire businessman and former New York Mayor Michael Bloomberg and the investing behemoth BlackRock have each not too long ago issued their very own strongly worded missives defending investments in local weather options and clear vitality and saying that requesting climate-related threat disclosures from corporations is wise capitalism.The letters come as political stress mounts in opposition to the concept of environmental, social and governance (ESG) funds, which purport to offer folks a simple approach to put money into corporations performing responsibly in these areas. Critics, notably on the Republican facet, have mentioned ESG is a canopy for a political agenda and is partly aimed in opposition to fossil gasoline producers. Bloomberg, who's at present price nearly $77 billion according to Forbes, revealed an op-ed in his namesake media publication on Tuesday deriding the Republican-led efforts to politicize funding choices in local weather options and clear vitality."In a world rapidly moving to clean energy, companies that are dependent on fossil fuels put investors at greater risk," Bloomberg wrote."The fact is: Climate risk is financial risk. Costs from climate-related weather events now exceed $100 billion annually — and that is only counting insured losses," Bloomberg wrote. "Accounting for these and other losses isn't social policy. It's smart investing. And refusing to allow firms to do it comes with a big cost to taxpayers."On Wednesday, BlackRock despatched a letter to a group of legal professional generals which defended its engagement in measuring the local weather threat of corporations and investing in clear vitality as responsibly finishing up its fiduciary obligation to shoppers."Our commitment to our clients' financial interests is unwavering and undivided," wrote BlackRock's senior managing director and head of exterior affairs, Dalia Blass."Governments representing over 90 percent of global GDP have committed to move to net-zero in the coming decades. We believe investors and companies that take a forward-looking position with respect to climate risk and its implications for the energy transition will generate better long-term financial outcomes," Blass wrote. "These opportunities cut across the political spectrum."Former mayor of New York Michael Bloomberg speaks throughout a gathering with Earthshot prize winners and finalists on the Glasgow Science Center in the course of the UN Climate Change Conference (COP26) in Glasgow, Scotland, Britain, November 2, 2021.Alastair Grant | ReutersBlackRock's letter was particularly responding to an Aug. 4 letter from 19 state attorneys common to BlackRock CEO Larry Fink, during which they objected to what they referred to as a bias in opposition to fossil fuels."BlackRock's past public commitments indicate that it has used citizens' assets to pressure companies to comply with international agreements such as the Paris Agreement that force the phase-out of fossil fuels, increase energy prices, drive inflation, and weaken the national security of the United States," the legal professional generals state.Specific state lawmakers have adopted laws for their very own states "prohibiting energy boycotts," the letter from legal professional generals states. For instance, later in August, Texas comptroller Glenn Hegar accused ten monetary corporations, together with BlackRock, and 350 funding funds of taking steps to "boycott energy companies."BlackRock objected to the concept it's boycotting vitality corporations or working with a political agenda.BlackRock is "among the largest investors in public energy companies," and has $170 billion invested in United States vitality corporations. Recent investments embrace pure fuel, renewables and "decarbonization technology that needs capital to scale," BlackRock mentioned in its letter.BlackRock additionally mentioned

that it requests climate-related monetary disclosures from corporations with the intention to enhance transparency and have the ability to make high quality funding choices for shoppers.Bloomberg, in the meantime, mentioned that measuring local weather threat is simply primary investing."Any responsible money manager, especially one with a fiduciary duty to taxpayers, seeks to build a diversified portfolio (including on energy); identifies and mitigates risk (including the risks associated with climate change); and considers macro trends that are shaping industries and markets (such as the steadily declining price of clean power)," Bloomberg wrote."That's investing 101, and either Republican critics of ESG don't understand it, or they are catering to the interests of fossil fuel companies. It may well be both." [ad_2] Source link

[nicholasyou]

How Privacy & ESG Obligations Can Lead to Class-Action Litigation

As regulators and the public increasingly expect businesses to function as vehicles for ethical and socially responsible growth, privacy and Environmental, Social, and Corporate Governance (ESG) programs have moved from the periphery to a priority in C-Suites. While these parallel programs become more central to every aspect of compliance, privacy and ESG programs are generally not designed with litigation in mind. With a private right of action to enforce privacy rights in California, an influx of new state privacy laws across the country, and higher scrutiny around public-facing ESG disclosures, businesses should prepare to prevent and handle litigation as a groundswell of privacy and ESG-related litigation looms.

Litigation is messy and expensive. Although preparation and diligence can help businesses mitigate the monetary and reputational risks. Whether litigation stems from privacy-based obligations or ESG disclosures, the path to resolution is never a straight one. Discovery requests span documents, records, reports, policies, assessments, audits, communications, and research.

It’s About Building Trust

ESG refers to the practice of evaluating an organization’s stated goals related to sustainability, social justice, and ethical governance against its investment and commitment towards achieving those objectives. Governance issues include anti-bribery and corruption, financial crimes, as well as data protection and privacy. On the other hand, privacy concerns an individual’s ability to determine for themselves when, how, and to what extent personal data about them is shared with or communicated to others. 

Privacy and ESG also provide a business with critical purpose and strategic direction. When a business lacks a full understanding of its social and legal obligations, the business is subject to increased risk in the form of fines, penalties, lawsuits, and damages. Businesses need to translate their obligations outside the walls of the office and beyond the bottom line into operational objectives. At the same time, businesses are struggling to interpret their obligations under the California Consumer Privacy Act (“”CCPA”), the incoming California Privacy Rights Act (“CPRA”), and the onslaught of U.S. state laws going into effect over the next few years. 

At their cores, privacy and ESG are critical to a business’ relationships with its customers, employees, business partners, and shareholders as it involves the impacts of a business’ operations from a social responsibility perspective and developing trust with stakeholders. 

Protecting Your Data Extends Beyond Privacy

Both privacy and ESG matters often involve high-profile events (e.g., data breaches), which can significantly impact a company’s profits, reputation, and goodwill. Litigation resulting from a data breach can result in substantial financial loss through class action lawsuits, fines, and damages. There is also the time and resources required to respond to incidents involving personal data and resolving claims while the court of public perception is making viral decisions. Ultimately, any litigation stemming from a data breach or other ESG-related issue can be an indication of systemic governance failures within a company. A failure to properly handle an incident involving the unauthorized access of personal data can be a crippling event for a business in a time when ransomware attacks are common.

ESG-related litigation has been primarily securities-fraud class action lawsuits. A well-known example is the 2018 Equifax data breach. The court found that Equifax had misled shareholders with general statements such as “safeguarding the privacy and security of information” being a top priority for Equifax. Based on recent ESG-based cases, there appears to be a trend of targeting broad or generic ESG statements through securities-fraud class action lawsuits

With the CCPA’s private right of action, many of the cases filed thus far have involved an alleged failure to implement reasonable security safeguards around personal data. Approximately 50 claims involving data breaches were brought under the CCPA's private right of action in 2020. The private right of action allows California residents whose personal data has been “subject to an unauthorized access and exfiltration, theft, or disclosure as a result of the business’ violation of the duty to implement and maintain reasonable security procedures and practices” to seek damages of $100-$750, per incident. Given the nature of the CCPA, it is not difficult to identify an “ascertainable class” with a “well-defined community of interest among members in order to establish a class action lawsuit.

What You Say Can Be Held Against You

The scrutiny around a business’ commitment to privacy and ESG issues is magnified when a business’ actions do not align with its words. Many times these businesses have the right intentions but there is no follow up or operationalization after statements are made. When a company’s actions do not represent what has been disclosed to the public, questions become causes of action.

In today’s social media era, businesses are under constant pressure from the consumers and shareholders to make public commitments to ESG issues such as sustainability, racism, and social justice. In an effort to meet these expectations, it has become common for businesses to make aspirational statements and draft forward-thinking policies related to causes. However, with those broad public statements come commitments that require resources and planning as well as increased attention.

In California, the newly formed California Privacy Protection Agency (“CPPA””) and office of the Attorney General are paying close attention to public-facing Privacy Notices found on websites that sell goods or services to California residents. Whether it is the proper description of an individual’s privacy rights or a “Do Not Sell” disclosure, a Privacy Notice is the first impression a business makes with respect to privacy. California regulators have stated that there have been numerous investigations launched after deficiencies in a company’s online Privacy Notice were noticed during web browsing and online shopping in their personal lives. In an effort to inform the marketplace and minimize uncertainties, the California Attorney General recently published examples of companies who received a notice for alleged non-compliance. A key takeaway is that most of these companies failed to properly disclose information about individuals’ privacy rights and how to exercise them or did not provide the requisite “Do Not Sell” disclosures in their Privacy Notices.

What’s Next?

A wave of new privacy and ESG-related litigation is expected in the coming months with new private rights of action and increased enforcement activity from the SEC. A business can use its privacy and ESG obligations to meet its objectives but proper planning, risk mitigation, and process implementation is needed. 

[inhousecommunity]

The Role of the In-House Lawyer Amidst the Rising Tide of ESG Regulations

Environmental, social, and governance (ESG) factors are fast making their way into mainstream business and investment consciousness. Far from being the cherry-on-top of an otherwise good company, these criteria are increasingly becoming part and parcel of business practice. Pressure to adopt ESG standards has come from consumers and a growing responsible investment community, as well as the expansion of governmental and regulatory requirements.

These standards create the framework for all stakeholders, including lawyers, to assess the sustainability and ethical practices of a company when reporting on such company or in making investment decisions. # business news

Indicative of this trend toward increased ESG focus, in late November 2021, the Hang Seng Indexes Company launched a new index in which socially responsible considerations sit up front and center – the HSI ESG Screened Index (HSI ESG). This index applies ESG principles to the standard Hang Seng Index (HSI), with constituents screened for compliance against the United Nations Global Compact (UNGC) Principles as well as for involvement in controversial product. # esg regulator

Focus on ESG criteria has thus come a long way from being about feel-good investment choices; these factors are now regulated and widely tracked. More than this, however, focus on companies adhering to ESG principles may well make financial sense. In comparing the performance of the HSI ESG to the HSI from the base date of the former, 7 December 2018, to present we see that the HSI ESG actually outperforms the market standard – and by a relatively long way.

As Mark D. Schroeder, Strategic Advisor to the Governance Solutions Group , put it, ESG frameworks help us assess the impact of a company to create value over time, in other words it’s about “doing well by doing good”.

So, what does this mean for the in-house legal community? To best understand the characters in this production and the role of the lawyer, one needs to get acquainted with the backstory that has gotten us to where we are and the scene that it sets.

Drivers Of Change

Vivien Teu, partner and head of ESG at Dentons in Hong Kong, highlighted as catalysts for this ESG movement, the growing public consensus on the trend amidst increasing expectations and requirements of institutional investors, governments, regulators, and consumers.

Schroeder indicated that in China pressure has come primarily from regulators, such as the China Securities Regulatory Commission. In Hong Kong, the financial regulators – the Hong Kong Monetary Authority and the Securities & Futures Commission – have led the way, while the Hong Kong Stock Exchange (HKEx) listing rules have clout over listed companies. Outside of these primary influencers, he said, we can look to the institutional investment community, such as Black Rock, Fidelity, and BNP Paribas, as drivers of change. Corporate reporting standards, in turn, are the consolidated effort of the Sustainability and Accounting Standards Board (SASB), the Global Reporting Initiative (GRI), the Task Force on Climate-Related Financial Disclosures (TCFD), and the International Financial Reporting Standards Foundation (IFRS); and for the investment community, the United Nations Principles for Responsible Investment (UNPRI).

Of course, not all sustainability issues can be blanketed into one framework and many are dealt with individually.

“On climate and environment, especially, laws and regulations have been introduced in recent years with mandatory requirements, and with more to come as many countries commit to climate goals aligned with the Paris Agreement. Under the Strategic Framework for Green Finance, announced in December 2020 by the Hong Kong Green and Sustainable Finance Cross-Agency Steering Group and co-chaired by the Hong Kong Monetary Authority and Securities & Futures Commission, climate-related disclosures aligned with the recommendations of the TCFD will be mandatory across relevant sectors no later than 2025,” Teu said.

Teu further cautioned that with global financial markets and cross-border investment, as well as global supply chains, foreign or international laws and regulations – such as the EU Corporate Sustainability Reporting Directive and the EU Sustainable Finance Regulation – might mandate additional disclosures or due diligence regarding ESG issues such as labor practices, modern slavery, bribery or corruption, human rights abuses in supply chains, and climate and environmental matters.

ESG And The In-house Lawyer

Given the above, there seems to be something of a minefield of new and existing regulations and best practice, both at the local level as well as international.

In order to navigate this sea of change, Chee Hoong Pang, Regional General Counsel for Agis, advised that in-house counsel are required to take on a wider role, becoming part of the “think tank” responsible for establishing the company’s ESG strategy and guiding its business conduct, procedures, and processes to abide with developing ESG laws and regulations.

It falls on in-house counsel, specifically those with dual legal and compliance responsibilities, to keep abreast of ESG developments.

In-house counsel, Pang recommended, “should embark on upskilling themselves on ESG issues such as (i) green finance, (ii) supply chain integrity, (iii) business human rights protection, (iv) their industry specific standards for business conventionalities, (v) COP26, and (vi) local government regulations, standards and code of practice and consequences of their breaches (e.g., fines, prosecution, reputational loss, commercial loss, termination of contracts, etc.)”

On a practical level, Teu outlined some of the ESG related requirements for both listed and non-listed companies in Hong Kong.

“The Hong Kong Companies Ordinance requires companies to include, in the business review section of the annual directors’ report, a discussion on the environmental policies and performance; an account of the company’s key relationships with its employees, suppliers and others that have a significant impact on the company; and a statement on compliance with relevant laws and regulations with significant impact on the company. This applies to all Hong Kong companies, unless exempted (such as for private companies below certain thresholds or size), whereas public companies are generally subject to the requirement.”

“The HKEx is one of the earliest stock exchanges to require listed companies to issue an ESG report (since 2013). Therefore, companies listed on the HKEx are also subject to ESG reporting requirements, which have now been enhanced to being mandatory to report on board engagement and oversight on ESG matters and with ‘comply or explain’ disclosure obligations in relation to four environmental aspects and eight social aspects,” Teu said.

Thus, in-house counsel, Teu explained, “has or can play a key role in supporting the board of directors and senior management of the company or corporate group to put in place relevant internal structures, policies, systems and processes for board and management oversight and management of ESG issues in its business lines and operations. They can also play a part in advising internal stakeholders on relevant laws and regulations relating to the ESG issues that have an impact in the business operations of the company or corporate group.”

Teu emphasized the need to consider not only ESG issues that have (financial) impact on the company or corporate group, but also ESG issues that may impact stakeholders or the community from the conduct of business activities and operations – the concept of “double materiality” that is gaining awareness.

In sharing his own experience as an in-house counsel, having taken on the additional roles of Ethics and Risks correspondent, Pang illustrated what an in-house counsel may expect from the coming years in the ESG arena and how to best be prepared.

“I anticipate a trajectory increase in my involvement at both regional and Group levels on ESG issues and their risks management, including their identification, assessment, prioritization, mitigation, closure and monitoring. Given the fast output in laws, regulations, industry standards, public expectations, and the legal accountability of both governments and corporations in relation to climate change and human rights concerns, there is always room for improvement as we navigate our way to align with the strategic priorities, objectives, and planning of the company.

“However, we need to be future-proof and not just meet current requirements, and it will be helpful to partake of industry bodies and government/regulatory consultations with emphasis on ESG compliance, opportunities, and challenges specific to their sector (e.g., to share best practice and create common standards and taxonomies),” Pang explained.

“Greenwashing” And Ticking Boxes

There exists a concern, however, that some companies have merely tried to “greenwash” their processes and ask their in-house lawyers, in this instance, to perform something of a “tick-box” exercise when it comes to following ESG protocols.

In advising against such practices, Dentons’ Teu referred to the enhanced ESG reporting requirements of the HKEx for listed companies, introduced in December 2019, which apply to financial reporting periods after July 2020. These, she said, were introduced as previous generic disclosures of listed companies’ ESG reports were considered highly inadequate.

“Institutional investors, as well as regulators, are increasingly expecting more transparency and reporting on ESG information, data and metrics. Companies that engage in greenwashing will not eventually be able to stand up to increasing scrutiny, which will place the company under reputational risk if claims of positive E, S or G performance turn out to be false,” Teu cautioned.

Schroeder added that there is real value in a robust disclosure of all ESG risks and opportunities, regardless of the direction in which they’re moving. More disclosure, he said, will prevent accusations of greenwashing and can provide an opportunity for a company to admit to issues and show what they are doing to actively deal with them.

Teu further warned that there are business concerns beyond those reputational in nature.

A company that engages in greenwashing instead of having appropriate processes on ESG will likely have ESG risk issues

“A company that engages in greenwashing instead of having appropriate processes on ESG will likely have ESG risk issues that are not properly managed as they should be, and which can turn into significant business risks or financial risks for the company, or such company may find itself in breach of applicable ESG-related law or regulations. For such companies, its directors and management may be falling short of the expected legal or statutory duty of care. That exposes the companies as well as the individuals to legal or regulatory risks. In-house counsel should remind boards of directors and management of such risks and strongly urge that ESG issues should be taken seriously,” she said.

Schroeder further emphasized that to achieve accuracy and efficacy in disclosures, legal and business should not be operating in isolation of each other. He stated that the role of the Chief Sustainability Officer (CSO) is no longer a sidelined one but rather a core function involved in the profit and loss of a company and one that, in his opinion, belongs in the legal function.

In echoing these sentiments, Pang said that management of ESG standards should be jointly driven by business and all support functions, including legal. He views his role as an in-house counsel on these matters to be a collaborative one in nature, where he finds himself working alongside teams at multiple levels (both group and regional) and from multiple backgrounds, including business, science, environmental studies, engineering, and communications.

This approach, in which duties and responsibilities are shared by multiple functions, creates an environment of checks and balances which may limit undue pressure from any one business unit to skirt ESG protocol.

Teu also suggested that companies need to move beyond a compliance mindset, which tends to be reactive instead of proactive, especially with fast evolving ESG standards and requirements. In this, companies should conduct a deep review with key internal and external stakeholders to identify core corporate purpose and values, and assess material ESG issues in its business and operations. “This process will enable companies to be prepared and build resilience, establishing internal and external communication channels for meeting new ESG disclosure or reporting requirements,” Teu said.

Harmonization And Alignment

Complying with all relevant laws and regulations seems a tall ask, especially for companies operating internationally. However, there may be hope that the role of the in-house lawyer and the requirements placed on a given company will become more streamlined with time. In this, Schroeder emphasized the importance of the standardization of requirements and that such may be within sight.

“Without standardization, ESG disclosure is a PR exercise and is essentially meaningless. The value of rigorous adherence to standards is the credibility that comes with it. Once the IFRS has gained more momentum in its ESG standardization project, issuers that have not already begun to fully disclose across all parameters will find themselves scrambling.

“Due to the efforts in Europe with the EU Taxonomy, similar efforts have followed such as those of the Monetary Authority of Singapore (MAS), publishing ESG standards to influence the ASEAN region, as well as the IFRS, with their recently launched International Sustainability Standards Board (ISSB). Indeed, substantive momentum towards global standardization is happening. This said, the likely future is that each relevant regulator within each jurisdiction will ultimately establish their own taxonomy (for example, we are likely to see ‘ESG with Chinese Characteristics’),” Schroeder said.

While standardization may seem like the golden ticket, Schroeder said that specification by industry is key as there are many differences between each industry and each market. While a single blue print might seem enticing as it can ease some burden on management, should such become regulation it could be an issue.

For now then, it remains up to the in-house lawyer to provide guidance on navigating the web of interrelated ESG laws and regulations that, to some extent, seem likely to remain complex.

In providing some concluding remarks, Schroeder declared that shareholder centrism has ended. It’s now about all stakeholders, being employees, clients, suppliers and society as a whole. Stakeholder Capitalism, as he calls it, is here to stay. The private sector, rather than government, is being called on now, more than ever, to solve the big challenges our societies face. To this end, being well versed in the roles we can play in both business and legal functions can have far-reaching impacts.

[indialawguide]

THE INTERPLAY BETWEEN CSR & ESG NORMS: WHAT INDIA INC. AND INVESTORS NEEDS TO FOCUS ON

Across the world, there is a growing demand on corporations to focus on sustainable development goals and strengthen the social responsibility of business. Working in sync with each other, while Governments are taking initiatives to bring legislative changes, investors also have started to value and consider such factors as key parameters for making an impact with their investment. The investors (such as private equity funds, venture capital funds, social venture funds, banks, financial institutions) are looking towards going a step further to not just focus on monetary returns but also achieve positive social and environmental governance impact. The impact of COVID-19 has already created ripples in the society to switch focus on various social goals.

Against this backdrop, the framework in India has progressed significantly with increased accountability for directors, key personnel and more disclosures relating to businesses. A series of efforts have been taken by the Indian Government, one of which requires  spend of 2% of average net profits by India Inc. (certain eligible companies) towards corporate social responsibility (CSR) activities in eligible areas such as eradicating hunger, poverty and malnutrition, promoting health care, education, gender equality, including environmental sustainability. The move to introduce CSR regime went beyond philanthropic activities to create a systematic model to create impact in society.  The CSR objective of the Government works in sync with the Government’s focus on expansion of disclosures on environment, social and governance (ESG) reporting by Indian listed companies. In fact, a company’s reporting of performance on sustainability related factors has become as vital as reporting on financial and operational performance.

Given the above context, this article analyses the  interplay between the  CSR and ESG regimes in India and how the corporations and investors would be impacted by these measures. 

Corporate Legal Services

Development of social responsibility of businesses: CSR model changed from “comply or explain”, to “comply or penalty”

The first milestone in the evolution of identifying social responsibility of businesses was release of the Corporate Governance Voluntary Guidelines in 2009 by the Indian Ministry of Corporate Affairs (MCA), to encourage corporates to voluntarily achieve high standards of corporate governance. This was followed by the release of the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business (NVGs) in 2011, which were subsequently used by the securities markets regulator in India, Securities and Exchange Board of India (SEBI) to frame the Business Responsibility Reports in 2012 and top 100 listed companies by market capitalization were mandated to file such reports. Later, in 2015 the mandatory reporting was extended by SEBI to top 500 listed companies by market capitalization.

With the enactment of the Indian Companies Act, 2013 (CA2013), the concept of CSR spending achieved legal recognition and apart from Section 135 of CA2013 which deals with the requirement, conditions and compliances for CSR spending, Section 166 of CA2013 also emphasized on the obligation of each director to act in good faith in order to promote the objects of the company for the benefit of its members as a whole, and in the best interests of not only the company, its employees, shareholders, but also the community and for the protection of environment. In 2019, MCA revised the NVGs and formulated the National Guidelines on Responsible Business Conduct, which lays down nine principles of business responsibility.

Section 135 of CA2013 and its rules were recently amended on January 22, 2021, to provide that spending CSR amount will be mandatory and mere statement of a reason for not spending the required amount on CSR activities will not suffice. However, keeping in view that not all CSR activities are likely to be completed in the same year of its commencement, any unspent CSR amount for the financial year has been classified into two buckets, one relating to ongoing projects and another relating to non-ongoing projects. In either case, there is a sunset period within which the unspent CSR amount for each financial year is to be transferred to the specified Government fund or unspent CSR account opened by the company.

To further encourage CSR spending, the amount spent in excess of the CSR obligation of 2% (two percent) of the average net profits of the company can now be utilized to set-off against the CSR obligation of 3 (three) subsequent financial years. To further ensure that CSR amounts are spent in the manner intended under the CA2013 and the rules framed thereunder, the new revised rules require the Chief Financial Officer of the company to certify that the CSR funds have been disbursed and utilized in the manner as approved by the board. Even the annual disclosure report has undergone changes and now more detailed information about the CSR projects, allocation of CSR funds, unspent amount, excess spending, carry forward, etc, are required to be reported.

 ESG reporting: Impact investing

Varied set of investors are looking to invest in assets which have ESG integrated or sustainable investing model. Their intent is not to just make profits but make impact on social and environment fields. The increased focus of stakeholders seeking corporations to be responsible and sustainable towards ESG goals have witnessed Governments actioning various legislative changes.

In the Indian context, SEBI recently on May 5, 2021, replaced BRR reporting with the Business Responsibility and Sustainability Report (BRSR) which imbibes the ESG principles. To begin with, BRSR has been made applicable to the top 1,000 listed entities (by market capitalization calculated as on 31st day of March of every financial year), for reporting on a voluntary basis for financial year 2021 –22 and thereafter on a mandatory basis from financial year 2022 –23. SEBI has prescribed a detailed format and guidance note for BRSR and requires listed entities to disclose on their performance against the following nine (9) principles of the ‘National Guidelines on Responsible Business Conduct’ (NGBRCs). The reporting under each principle is divided into essential and leadership indicators. The essential indicators are required to be reported on a mandatory basis while the reporting of leadership indicators is on a voluntary basis.

Principles of  ESG Reporting

Some of the key disclosures under the new BRSR and ESG include disclosures relating to environment, waste generation and management, employees/ workers employed including benefits given to them, occupational and health safety management systems implemented, safety related incidents, process used to identify work-related hazards, measures taken to ensure safe and healthy work place, consumer complaints, product labelling and recall, CSR, details of fines/ penalties paid in proceedings with regulators, etc.

A systematic disclosure on BRSR will help the stakeholders assess and mitigate the ESG risks, and at the same time, also require the companies to put system in place to ensure that ESG reporting is true and correct as many investors will base their investment considering ESG as a key factor.

Way forward for corporate India and investors

Now that the interplay between CSR and ESG norms has been established, the revised CSR norms and ESG reporting are likely to help stakeholders in understanding the compliance by companies of the laws relating to ESG. While the benefits of CSR and ESG reporting are immense, at the same time, corporates need to be careful of what they disclose and ensure that the disclosures are in line with the current legal requirements relating to labour, environmental law, consumer law, etc. The interplay between ESG and CSR will also act as potential tools to engage into meaningful conversations with the stakeholders and create value. While in the beginning, ESG and CSR have been made applicable to certain limited corporations, however, with its results and impact, its reach may well be expanded to other entities as well.

ESG may be in its nascent stage at the moment, however, with the global economies’ focus shifting to sustainable development, reducing carbon footprint, fulfilling beneficial social and environmental goals, it will make investors closely assess ESG and CSR factors in identifying their potential investments to have an impact investment. The diligence exercises carried out by investors will indeed have dedicated focus on ESG norms. It is important therefore, for corporations and stakeholders to carefully assess the disclosures and compliances with ESG and CSR norms, in consultations with their advisors, including legal and financial.  

*Co-authored by Manendra Singh, Associate Partner and Tanvi Goyal, Principal Associate  of Economic Laws PracticeC

[minnesotaprelawland]

Elon Musk and Tesla Board Members Face Suit from Shareholders

By Cory Baker, University of Minnesota Crookston, Class of 2023

July 2, 2021

One of the most prominent and iconic Silicon Valley companies, Tesla, is under fire for its inability to control CEO Elon Musk. This company prides itself on limiting the world's reliance on fossil fuel consumption by producing innovative renewable energy solutions. Tesla’s business model has developed a successful venture into the electric vehicle, solar roofs, and solar panel industries. However, with an eccentric CEO who irrationally expresses his ideas over social media platforms, one shareholder has seen enough. Recently investor Chase Gharrity brought about a derivative lawsuit against its CEO Elon Musk and its board of directors for “accuses the electric vehicle maker’s board of failing to rein in Musk’s behavior online, even as he has repeatedly violated a 2018 settlement with the Securities and Exchange Commission.”.[6] The suit was filed under Delaware Chancery Court and unsealed on March 11th, 2021 “claiming Musk has exposed the company to billions in potential liability and market losses”.[6]

Mr. Gharrity is but a representative for Tesla and personally doesn’t gain anything from the suit but rather defends the interests of the company. Corporations are legal entities separate from their owners and owned by the shareholders who invest in them. Through the articles of incorporation, the shareholders are responsible for appointing a board of directors who then appoint the officers to run the day-to-day operations.[5] Under a derivative suit, the shareholders bring about a complaint “on behalf of a corporation when the corporation has a valid cause of action but has refused to use it”. [2] Without them the company and its board of directors would not be held liable for actions or inactions that damage the company in any way. This suit focuses on a fiduciary duty that the directors and officers had towards Tesla. These fiduciary duties can be broken up into the duties of care, loyalty, good faith, confidentiality, prudence, and disclosure.[1]

The actions taken by Mr. Gharrity stem from a previous suit against both Tesla and Musk filed by the SEC in 2018. At the time Elon Musk was both the chairman of the board and the CEO, which gave him tremendous influence over the Tesla corporation. With a strong Twitter presence, Elon Musk was charged with securities fraud due to a misleading tweet regarding Tesla’s share price and its ability to go private. “The SEC’s complaint alleged that, in truth, Musk knew that the potential transaction was uncertain and subject to numerous contingencies. Musk had not discussed specific deal terms, including price, with any potential financing partners, and his statements about the possible transaction lacked an adequate basis in fact.”[8] After making that tweet Tesla’s stock price rose by 6% over the day.

The SEC also charged Tesla with “failing to have the required disclosure controls and procedures relating to Musk’s tweets… nor did it have sufficient processes in place to that Musk’s tweets were accurate or complete”.[8] The suits ending in settlements for both Tesla and Elon Musk who neither denied nor admitted to the claims. The following actions were agreed upon by both parties.  

1.      “Musk will step down as Tesla’s Chairman and be replaced by an independent Chairman.  Musk will be ineligible to be re-elected Chairman for three years.

2.      Tesla will appoint a total of two new independent directors to its board.

3.      Tesla will establish a new committee of independent directors and put in place additional controls and procedures to oversee Musk’s communications;

4.      Musk and Tesla will each pay a separate $20 million penalty.  The $40 million in penalties will be distributed to harmed investors under a court-approved process.” [8]

Within the derivative suit, Mr. Gharrity references a tweet like that of the 2018 situation that led to the SEC settlement. However, in this case, instead of an upward movement in price, Elon triggered a downward pressure on the stock by 10%. This occurred in May of 2020 when Elon Musk stated on Twitter that the stock was too high and that he was claiming to sell “almost all of his physical possessions and won’t own a house”.[4] Various investors believe that Mr. Musk was reacting to the Coronavirus pandemic and turned to Twitter as a coping mechanism.[4] This would seem like a violation of the settlement, however, the SEC has not confirmed it.

Even though he has allegedly “continued to issue tweets without the required pre-approval,” set about in the rules.[6] A contempt claim in 2019 triggered the SEC to tighten the rules of his past settlement. In this tweet, he suggested a production volume that was inaccurate and need not met the pre-approval from Tesla’s lawyers. Elon Musk is pushing the limits of the SEC with these actions and has made comments such as “I want to be clear, I do not respect the SEC. I do not respect them.”[7]  This derivative suit illustrates his attitude toward these regulations and motivates the shareholders to do what they believe is best for the Tesla Corporation.

______________________________________________________________

Cory Baker is a Finance major at the University of Minnesota Crookston with an interest in corporate law and he plans to attend law school to receive a JD. His dream job would be to work as a securities attorney for the SEC or with a firm handling mergers and acquisitions, bankruptcy, and corporate governance. Cory currently lives in Montana with his dog and immediate family.

______________________________________________________________

[1] Cornell Law School. (2021a). Fiduciary Duty. Legal Information Institute. Retrieved from https://www.law.cornell.edu/wex/Fiduciary_Duty

[2] Cornell Law School. (2021b). Shareholder derivative suit. Legal Information Institute. Retrieved from https://www.law.cornell.edu/wex/shareholder_derivative_suit  

[3] Gharrity vs. Musk et al. (2021). Court of Chancery of the State of Delaware. Retrieved from https://www.bloomberglaw.com/public/desktop/document/CONFCOMPLAINTChaseGharrityvElonMusketalDocketNo20210199DelChMar08?1620676593

[4] Hull, D. (2020). Tesla Falls as Musk Says Stock Too High in 2018-Style Tweets. Bloomberg Law. Retrieved from https://news.bloomberglaw.com/esg/tesla-falls-after-musk-says-stock-too-high-in-2018-style-tweets

[5] Justia. (2021). Shareholder derivative lawsuits. Retrieved from https://www.justia.com/business-operations/business-disputes/shareholder-derivative-lawsuits/

[6] Leonard, M. & Ramonas, A. (2021). Musk, Tesla Board Sued Over Tweeting in Violation of SEC Deal (2). Bloomberg Law. Retrieved from https://news.bloomberglaw.com/securities-law/musk-tesla-board-sued-over-tweeting-in-violation-of-sec-deal

[7] Neate, R. (2019). Elon Musk could face contempt charge over 'inaccurate' Tesla tweet. The Guardian. Retrieved from https://www.theguardian.com/technology/2019/feb/25/elon-musk-tesla-judge-contempt-sec

[8] U.S. Securities and Exchange Commission. (2018). Elon Musk Settles SEC Fraud Charges; Tesla Charged with and Resolves Securities Law Charge. Retrieved from https://www.sec.gov/news/press-release/2018-226

[anna-2807]

Nearly $23 trillion of assets worldwide are managed using responsible investing (RI) strategies, a 25 percent increase since 2014, according to the Global Sustainable Investment Alliance. New funds focused on environmental, social and governance (ESG) issues have also doubled since 2014.

RI used to suffer under the guise of a do-good passion project or something added to a portfolio because it’s “nice to have” rather than for its competitive performance. While companies focused on RI may take more time to turn a profit, they’re also more likely to have a solid foundation with prospects for long-term success.

Business practices prioritized by these companies include environmental efficiency, diversity and fair-minded human capital management as well as choosing like-minded board members to oversee these practices. These companies also are big on transparency, which is beneficial for investors who like to be in the know.

RI has evolved from simply screening out companies that contradict its objectives, such as tobacco and firearms, to including companies proactively working to implement RI goals. If you’re interested in learning more about specific holdings or funds that fall into the RI category, we’re happy to help.

Some pundits caution RI investing is more about making the investor feel good than actual impact on environment or social issues. That’s because the only time investors place direct investments into a company is at the initial public offering (IPO) stage, or infrequent times a company may issue additional new shares to raise capital. Otherwise, the day-to-day share trading happens in the secondary market between buyers and sellers, in which the volume of money trading hands doesn’t actually got into the reserves of the company itself. The same is true for company bonds

As for performance, RI has a similar track record to other types of funds. Many fail to beat their benchmarks and underperform their non-RI counterparts, but then again, this is true of more than 80 percent of active money managers. The difference for RI investors is the knowledge their portfolio and values are aligned.

One area of RI involves real estate investment in “opportunity zones” located in certain urban, suburban and rural areas. Recent tax cut legislation offers a lower capital gains tax rate on investments in these zones, plus tax-free gains when the investment is sold. Funds of this type frequently require a $1 million minimum investment.

RI initiatives aren’t limited to the U.S. Their popularity has increased all over the world, particularly in Western Europe. While the current U.S. administration has reversed many sustainable initiatives in areas like corporate environmental responsibility and climate change, RI is driven by investors, not politics, and is expected to continue growing regardless of the U.S. government’s ideologies.

Standard Disclaimer.

Advisory services offered through Lake Point Wealth Management, LLC, an SEC Registered Investment Adviser. Insurance products and services offered through Lake Point Advisory Group, LLC. It is important that you do not use e-mail to request, authorize or effect the purchase or sale of any security or to effect any other transactions. The information transmitted herein and any attachments or files transmitted herewith may contain proprietary, confidential and/or protected, non-public information, are covered by applicable state and federal laws and are intended solely for the use of the individual or entity named above as the intended recipient. If the reader of this message is not the above-named intended recipient, or his/her/its agent, be advised that any review, disclosure, dissemination, distribution or copying of this communication is strictly prohibited. If you have received this communication in error, please immediately notify the sender by telephone or e-mail and destroy the material forwarded in error. Nothing in this communication shall constitute an offer to sell or solicit any offer to buy a security or any insurance product. Recipients should be aware that all emails exchanged with the sender may be archived and may be accessed at any time by duly authorized persons and may be produced to other parties, including public authorities, in compliance with applicable laws.

Continue reading- https://lakepointadvisorygroup.com/responsible-investing-options/

[juudgeblog]

Importance of Green Bonds in the Indian Economy

This article is written by Kashish Khattar, Amity Law School, Delhi [IPU], pursuing Ace your Internship course at Lawsikho.

Introduction

A bond is a debt instrument with which an entity raises money from investors. The issuer gets capital while the investors receive fixed income in the form of interest. When the bond matures, the money is repaid. A green bond is the same as a bond, the only difference is that the issuer of a green bond publicly states that the capital is being raised to fund ‘green’ projects, which can be utilised under certain specified categories such as:

renewable and sustainable energy (wind, solar, bioenergy, other sources of energy which use clean technology etc.);

clean transportation including mass/public transportation etc.;

sustainable water management including clean and/or drinking water, water recycling etc.;

climate change adaptation;

energy efficiency including efficient and green buildings;

sustainable waste management including recycling, waste to energy, efficient disposal of wastage;

sustainable land use including sustainable forestry and agriculture and afforestation etc. and

biodiversity conservation.

The definition has been kept expansive enough to include every type of green project that can be thought of at the present time and for the future time being.

Importance of Green Bonds in the Indian Economy

Introduction of Green Bonds sets to resolve the issue of funding in the evolving renewable energy sector. India has set an ambitious target of 175 GW of renewable energy by 2022 and reduce its carbon footprint. An estimated investment of USD 200 billion is required to achieve that capacity. The delay in these ‘green’ projects has largely been due to lack of capital funding. Green Bonds, is a fast emerging investment for clean energy. Some key benefits for issuing green bonds are:

Investor diversification: These bonds help the issuer to amplify funding sources and limit the dependency on specific markets by such issuers. Particularly, Green bonds have been quite popular with investors focused on sustainable and responsible investing (SRI), investors that come under the ESG criteria (Environmental, Social and Governance) etc.

Potential for Pricing Advantage: The green factor to these bonds brings with it, pricing advantage. The green bonds have high prospects to bring domestic and foreign capital for renewable energy on better financing terms, including lower interest rates, and longer repayment schedules.

Procedure for Issue of A Green Bond

To issue a green bond, the compliances laid down in Securities And Exchange Board Of India (Issue And Listing Of Debt Securities) Regulations, 2008 (“ILDS Regulations”) and the Green Bond Guidelines (“Circular”) issued by SEBI (“Board”) on 30th May 2017 are required to be complied with:

The issuer has to make an application to a recognised stock exchange has been made for listing of securities. The issuer has to appoint merchant bankers registered with the Board, one of whom should be lead merchant banker. It also has to obtain in-principle approval for listing of green bonds on the stock exchange, obtain a credit rating from a credit rating agency. The issuer also has to enter into an arrangement with a depository for dematerialization of the green bonds.

It will also appoint one or more debenture trustees in accordance with the appointment of debenture trustees and duties of debenture trustees of the Companies Act, 1956 (“Act”) and SEBI (Debenture Trustees) Regulations, 1993. Issuer cannot issue green bonds for loans or acquisition of shares of anyone for people who are part of the same group or who are under the same arrangement.

The offer document has to contain all material disclosures which are needed by the subscribers to take an informed decision. The issuer and lead merchant have to make sure that the offer document will contain – which talk about matters to be specified in prospectus and reports to be set out. And disclosures such as last three years annual report, undertaking from the issuer etc. The objective of the green bond, brief details of how the issuer has determined the eligibility of the projects, procedure to be used for deployment of the proceeds of the issue. Details of the projects where the green bonds will be utilised, appointment of third party reviewer for certifying things such as project evaluation, selection criteria, project categories eligible for financing by green bonds.

The draft and final offer document has to be displayed on the websites of stock exchanges. Advertising for public issues would include advertisements in the national dailies, no misleading material should be included, it should be truthful, fair and clear, it should only talk about the relevant subjects. Any other product or advertisement issued by the issuer during the subscription should not make any reference to the issue of green bonds.

The issuer proposing to issue green bonds online through the website of the designated stock exchange has to comply with the relevant requirements which may be specified by the Board. The price will be determined by the issuer and the lead merchant banker together or through the book building process. The issuer can decide the minimum subscription which it seeks to raise by the issue of green bonds, disclosing the same in the offer document.

A trust deed will be executed by the issuer in favour of the debenture trustee in three months of the closure of the issue. The trust has to contain clauses as maybe prescribed under Section 117A of Act, and those in Schedule IV of the SEBI (Debenture Trustees) Regulations, 1993. The debenture redemption reserve will be created by a company for redemption of green bonds in accordance with the Act, and any circulars issued by the central government. The trust should will not contain limiting obligations and liabilities of the issuer in connection with the rights and interests of the investor.

There should a proposal to create a charge or security in respect to secured green bonds which have to be disclosed in the offer document, the issuer is supposed to give an undertaking about the assets on which charge is created are free from any burden.  The proceeds from the issue will be kept in an escrow account till the documents for creation of security as stated in the offer document are executed.

Responsibilities of the issuer – The issuer will maintain a decision making process which determines the eligibility of the projects/assets. Including, without any exception, a statement on the environmental objectives of green bonds and a way to determine whether the projects or assets are eligible to be considered. He will ensure that all projects or assets are funded by the proceeds of the green bonds, and meet its objectives. The utilisation of proceeds is well established in the offer documents. The issuer or any agent of the issuer, if following any globally accepted standard for measuring environmental impact on the project or has a process of identifying projects or assets, or utilising of proceeds will disclose all the details in the offer document, disclosure document and in continuous disclosures.

Procedure for Listing of Green Bonds

Mandatory Listing

Issuer who desires to make an offer of green bonds to the public has to make an application for listing to one or more designated stock exchanges under Section 73 of the Act;

Issuer has to comply with all the conditions of listing such green bonds as have been specified in the listing agreement with the stock exchange; and

The issuer who wishes to issue privately placed green bonds has to forward the listing application with disclosures specified in Schedule 1 of the recognised stock exchange within fifteen days from the date of allotment of those green bonds.

Conditions for listing of green bonds on private placement basis

The issuer has to issue green bonds in compliance with provisions of the Act, rules prescribed and other applicable laws, credit rating has been obtained from one agency registered under the Board, securities to be listed are in dematerialized form, disclosures in Regulation 21 have been made. The issuer has to comply with conditions specified in Listing Agreement with the stock exchange where these securities are supposed to be listed, the designated stock exchange has to collect a regulatory fee as specified in Schedule V. The issuer has obtained fresh credit rating from at least one credit agency, ratings have to be reevaluated on a periodic basis, appropriate disclosures have to be made in regard with re-issuance of term sheet. The issuer seeking listing will make disclosures as specified in Schedule I of the regulations and the annual report of the issuers; it should be made on website of stock-exchanges and shall be downloadable in PDF/ HTML formats. Relaxation of strict enforcement of rule 19 of Securities Contracts (Regulation) Rules, 1957. The Board relaxes enforcement of sub rules (1), clause (b) of sub rule (2) and (3) of rule 19.

Compliances

Continuous Listing Conditions

All issuers making public issue or seeking to list green bonds issued on private placement basis will comply with conditions of listings specified in respective listing agreement for green bonds, every rating obtained by the issuer will be reviewed by a credit rating agency and any changes will be disclosed by the issuer to the stock exchange, any change in rating will be communicated to investors as maybe determined by the stock exchange, debenture trustee will issue a press release in any of the events when – there is default by issuer to pay interest on green bonds, failure to create a charge on assets, revision of rating assigned to the green bonds. All this information has to be placed on the website if there is one of the debenture trustee, issuer or stock exchange etc.

Trading of green bonds

The green bonds, public or on a private placement basis will be listed on a recognised stock exchange, will be traded and such trades will be cleared and settled in the recognised stock exchanges subject to conditions specified by the Board, if green bonds are traded over the counter – they have to be reported on a recognised stock exchange. The Board can specify conditions for reporting of trades on the recognised stock exchange.

Continuous Disclosure Requirements

Aside from disclosures made by the issuer in SEBI Listing Regulations, 2015. The issuer is required to submit to SEBI from time to time, its annual report and financial results along with utilisation of the proceeds on the basis of any internal tracking done by the issuer where such internal tracking is verified by any external auditor whereby he can verify the proper utilisation of proceeds of the green bonds and allocation of the same towards projects or assets. Also, details of unutilized proceeds will be given.

Additional disclosures that need to be submitted with it’s annual report include the quantum of amount raised and a list of projects with brief descriptions, for which such amounts are raised. Details need not be provided when such information comes under the ambit of confidentiality. General information would suffice in these cases; and Certain qualitative and quantitative performance indicators are required, also the underlying assumptions used in the preparation of the performance indicators and metrics are required.

Impact of Green Bonds on the Market

The Circular does a great job in formalizing the regulatory framework for issuing and listing of these bonds. They are a big boon to the renewable sector and make the investments more lucrative to investors and provide a benchmark to regulate and monitor these guidelines that funds are only used for green projects. This will broaden access to domestic and foreign capital and relieve the banks from the strain of lending and refinancing long term green projects. Green Bond Guidelines also ensure detailed disclosure norms for the borrowing authority, closed monitoring of the utility of the bond proceeds, an incentive and add immense quality to a novel financial product which has already established its success in international and domestic markets. The guidelines also strengthen India’s commitments at the COP21 Agreement.

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