A Sharp Eye on Sustainable Finance - Season 2, Episode 11

Welcome back to your personal newsletter on International Sustainable Finance. Bringing you what caught my eye as I call out the green-washers and applaud genuine progress in the financial markets to sustainability.

Halfway through my flagship subject of International Sustainable Finance at the Melbourne Law School (just as the footy season kicks off...). It’s a privilege to work with 30 dedicated students alongside colleague Erik Nieuwland , and Sarah Madew (formerly of DEG ). What makes a subject successful? For me, it’s about engagement and #empowerment – enabling students to use their learnings / legal tools to further, negotiate and challenge all aspects of sustainable finance and the energy transition, whether in an NGO or in big oil. Making informed and conscious decisions in their career and in their legal work. Thankful to guest lecturers Michael Lambden , Caroline Smart , Jon McIntosch and Elisa de Wit for sharing their valuable insights into strategic choices in the climate and #energytransition, the role and integrity of #carboncredits and the trends and documentation of green and sustainable bonds in practice.

So, what’s up this week?

[A] In the Public Domain

[1] While Republican politicians castigate Wall Street over its climate initiatives, another group of conservatives is trying to change hearts and minds in rural counties and state capitals on the benefits of the nation’s shift to clean energy.

In town halls, courthouses and statehouses across the Midwest, South and Appalachian states, members of the Conservative Energy Network have been meeting with farmers, landowners, Evangelicals and state lawmakers to convince them that wind, solar and other forms of renewable power are good for their wallets, rights and votes. 

[2] At the other end of the spectrum: the governors of 18 U.S. states announced today the formation of an alliance, led by Florida Governor Ron Desantis, aimed at coordinating actions to “protect individuals from the ESG movement” with actions including banning the use of ESG considerations in state and local pension funds.

[3] A bit more balanced, perspectives across regions can be found here Regional ESG Legal Outlooks 2023 - thank you Linklaters for your in-depth knowhow on climate and ESG - though I continue to wonder whether major law firms are reducing their advisory work on big oil and gas projects and more generally projects with an adverse effect on climate - if you have examples of (dis)engagement let me know.

[B] Deals, deals, deals

[1] The LMA published detailed guidance on its update of the Green Loan Principles and Sustainability-linked Loan Principles here.

[2] in the Development finance side, highlighting IFC and FMO invest $50 million in Mibanco, banco de la Microempresa to increase financing for formal and informal women-led businesses in Peru. The syndicated loan will help close the financing gap for women-owned micro, small and medium sized enterprises and provide tailored financial products and services critical for these enterprises to succeed. Peru's microfinance market is one of the most vibrant in the region, with Mibanco leading MSME lending. Read more: https://lnkd.in/erRFwvaZ

[3] Another one worth more than a mention is British International Investment in the Kashf Foundation . Check out the video.

[4] On the theme of Climate Adaptation and resilience, check out this deal from World Bank Executes its Largest Single Country Catastrophe Bond and Swap Transaction to Provide Chile $630 Million in Financial Protection Against Earthquakes. Looking forward to discussing this one with the class – how derivatives and structured products can be instrumental in mitigating the consequences of climate change.

[4] And on the engagement front, Aviva completes divestment of £2.5bn in fossil fuel companies :: Environmental Finance (environmental-finance.com)

[C] Strategic Litigation

Never a dull moment in strategic litigation:

[1] On greenwashing: A great overview across jurisdiction, including on the consumer side of greenwashing from Clifford Chance : The Rise of Consumer Complaints, Litigation and Enforcement Actions to Curb Greenwashing

The Australian Competition and Consumer Commission ( ACCC ) has been asked to investigate whether environmental claims by Toyota are misleading or deceptive. The greenwashing complaint, filed Friday by the Environmental Defenders Office on behalf of Greenpeace, focuses on claims about the environmental performance of Toyota’s vehicles and its net zero ambitions.

Also, ASIC has launced its first greenwashing case against Super Fund Mercer, linking nicely to Stewards of Climate Disaster - Market Forces How Australia’s biggest super funds are failing to deliver on climate claims through ‘active ownership’.

[2] On the govenmental side, the European Court of Human Rights will hear its first climate hearings: one brought by a group of over 2,000 older Swiss women against Switzerland and the other by the former mayor of the city of Grande-Synthe against France. Older Swiss women take government to court over climate. A similar case in Korea is starting in Korea - great to see the momentum build and cross over to other jurisdictions. Youths, lawyers urge constitutional court to tackle carbon neutrality faster. And on the theme of access to rights and remedies, the the Court of Justice confirms environmental NGOs can challenge all violations of environmental law.

[3] In this space I've written quite a bit about the French law on Vigilance. In a recent case, the French courts seemed cautious to infringe too much on the corporate management, see this one here on Business and Human Rights.

[4] Of the 193 United Nations member states, 105 have now supported Vanuatu’s call to request that the International Court of Justice (ICJ) gives an advisory opinion on states’ legal obligation for climate action and the consequences of causing harm.

[D] What else is on the table – media and #Afterburner.

[1] A video on Climate justice for children and future generations - YouTube.

[2] Some great weekend reading in the interview with Kathy Matsui, who apparently coined the term #Womenomics. I also would like to flag this interview with Ayisha Siddiqa, research fellow for the Climate Litigation Accelerator project who was recently named one of Time magazine's women of the year.

The #afterburner this week is from my course - we looked at #coffee (is it sustainable or not, would you be able to pay more if you knew proceeds would benefit the local communities harvesting it?) and #palmoil (the limitations of the EU taxonomy and impact on for instance producers in Indonesia, combined with the different perspectives of what constitutes sustainable production). So, my question is - next time you sip your coffee, please think of where it was made, and whether the local community benefits (and how) from your purchase. :)

Enjoy the week!

 #sustainablefinance #parisagreement #humanrights #esginvesting #greenwashing #sustainablecoffee #reducinginequalities #esglawyers #impactlawyers