Many governments across the world have recognized that their net-zero targets cannot be achieved without robust policy and regulatory frameworks. Some have also realized that sustainability is not only about climate, and are therefore paying increasing attention to the way companies behave on other material ESG issues, including their interactions with nature, stakeholders along the supply chain, and their own workers. In the meantime, the rapid increase in investor demand for ESG-related strategies and investment products has highlighted the need for new rules to ensure transparency around sustainability claims and protect investors from greenwashing.
The European Union has traditionally been at the forefront of these efforts, with its ground-breaking 2018 Sustainable Finance Action Plan setting the pace for other jurisdictions looking to reorient capital flows toward a more sustainable economy, manage financial risk stemming from climate change, and promote corporate transparency on sustainability issues and “long-termism”. As policymakers in Asia, the U.S., Latin America and elsewhere consider their own frameworks, investors and companies alike grapple with this evolving and complex web of ESG-related regulatory requirements.
In this Insights, we take stock of what global policymakers developed in 2023 to deliver on their net-zero commitments and other sustainability-related goals and in response to the spike in investor demand. More importantly, we seek to provide some guidance on what we believe is in store for an equally crucial 2024.
