The ‘duty of vigilance’ cases against TotalEnergies over human & environmental rights impacts of EACOP and Tanzania were dismissed
On the 28th of February 2023, the interim relief judge of the Paris Court of Justice dismissed the cases against TotalEnergies for a massive oil project in Uganda and Tanzania. The two cases were filed in 2019 by six NGOs (two French and four Ugandan NGOs) who argued that TotalEnergies was failing to comply with its human rights and environmental due diligence obligations under the French Duty of Vigilance Law in relation to their East African Crude Oil Pipeline (EACOP) and Tilenga oil projects in Uganda and Tanzania. Firstly, on the procedural aspects, the court considered that the demands and grievances of the NGOs at the December hearing were “substantially different” from those they had put forwards in their initial formal notice in 2019. Secondly, in relation to the powers of the interim relief judge, the decision considered that the alleged breaches of the duty of vigilance by TotalEnergies had to be examined in depth in relation to the elements of the case, which exceeded the powers of the interim relief judge. This decision highlights the difficulties of enforcing the French law on the duty of vigilance which does not directly refer to any pre-established international standard, does includes a clear nomenclature or classification of the duties imposed on companies.
The Advertising Standards Authority (ASA) updated the guidance for advertisers making environmental sustainability-related claims to consumers
The UK ad regulator announced new guidance for advertisers making environmental sustainability claims to consumers. This update considers the lack of consensus around the meaning of carbon neutral and net zero claims, so it recommends advertisers to:
- Avoid using unqualified carbon neutral, net zero or similar claims.
- Ensure that they include accurate information about whether (and the degree to which) they are actively reducing carbon emissions or are basing claims on offsetting.
- Base claims on future goals relating to reaching net zero or achieving carbon neutrality on a verifiable strategy to deliver them.
The European Commission proposed detailed rules to define what counts as renewable hydrogen
As part of the EU regulatory framework for hydrogen (which includes energy infrastructure investments, state aid rules, as well as legislative targets for renewable hydrogen for the industry and transport sectors), the European Commission announced, on the 13th of February 2023, the release of proposed detailed rules outlining the definition for what constitutes renewable hydrogen in the European Union, with the adoption of two Delegated Acts required under the Renewable Energy Directive.
The first Delegated Act defines under which conditions hydrogen, hydrogen-based fuels or other energy carriers can be considered as a renewable fuel of non-biological origin (RFNBO), and the second Delegated Act offers a methodology for calculating life-cycle greenhouse gas emissions for RFNBOs.
Following this adoption, the Acts will be transmitted to the European Parliament and the Council, which will have 2 months to scrutinise them and to accept or reject the proposals. At their request, this scrutiny period can be extended by 2 months.
The European Parliament approved the ban on new fossil fuel cars from 2035
In February, the European Parliament formally approved a law regarding new CO2 emissions reduction targets for new passenger cars and light commercial vehicles. The new legislation sets the path towards zero CO2 emissions for new passenger cars and light commercial vehicles in 2035 and presents intermediate emissions reduction targets for 2030 at 55% for cars and 50% for vans.
The Commission Delegated Regulation (EU) 2023/363 of 31 October 2022 was published
On the 17th of February 2023, the Commission Delegated Regulation (EU) 2023/363 of 31 October 2022 amending the regulatory technical standards laid down in Delegated Regulation (EU) 2022/1288 as regards the content and presentation of information in relation to disclosures in pre-contractual documents and periodic reports for financial products investing in environmentally sustainable economic activities was published.
This Delegated Regulation incorporates nuclear and gas disclosures into the regulatory technical standards in the Delegated Regulation (EU) 2022/1288 and it addresses two changes that the European Supervisory Authorities previously noted regarding erroneous cross-references in the periodic disclosures.
The European Commission presented the Green Deal Industrial Plan
The European Commission announced the Green Deal Industrial Plan which supports the transition to climate neutrality and aims to provide a supportive environment for the scaling up of the EU’s manufacturing capacity for the net-zero technologies and products required to meet Europe’s ambitious climate targets. The Green Deal Industrial Plan intents to speed up the net-zero transformation of the EU industry and it is based on four main pillars:
- A predictable, coherent and simplified regulatory environment, which supports the quick deployment of net-zero manufacturing capacities;
- Faster access to sufficient funding, by boosting investments while avoiding the fragmentation of the Single Market;
- Skills, by ensuring that the European workforce is skilled in the technologies required by the green transition; and
- Open trade for resilient supply chains, based on cooperation with the EU’s partners to ensure diversified and reliable supplies and fair international competition.
Shell accused of greenwashing by NGO Global Witnesses
The NGO Global Witness announced on the 1st of February 2023 the lodging of a greenwashing complaint against Shell to the Securities and Exchange Commission (SEC), the US financial regulator. The NGO requested SEC to investigate Shell’s claims regarding its energy transition efforts. According to the NGO, only 1.5% of Shell PLC’s total expenditure in 2021 was capitalised into wind and solar power generation, even though the company stated a greater investment into renewable energy. Also, the NGO accused Shell to use fossil gas across its renewable spending.
California Senators announce proposal for “Climate Accountability Package”
On the 30th of January 2030, California Senators announced a proposal for a “Climate Accountability Package”, several measures to increase corporate transparency on emissions and investments. These measures include, inter alia, the obligation of all large corporations operating in California to publicly disclose their greenhouse gas emissions, including their corporate supply chains emissions (Scope 3), as well as the obligation of financial institutions to disclose on the financial risk related to climate change.
Litigation against Shell’s Board of Directors for climate strategy
The NGO ClientEarth announced that they launched an action against the Board of Directors of Shell, in their capacity of shareholder and with the support of institutional investors.
The action is based on the failure of the Board of Directors to deliver a plan to adequately address climate risk and to reach the needed reduction of greenhouse gas emissions to achieve global climate goals, as well as on the continuation of the production of fossil fuels in the next decades. According to the NGO, these actions will prevent Shell to remain competitive in the energy market, and will anchor the company to investments that will probably become unprofitable. Thus, the Board’s actions are, under the NGO’s view, endangering the long-term commercial viability of the company and increasing its risks.
International Sustainability Standards Board tentatively resolves on the application of IFRS General Sustainability-related Disclosures and Climate-related Disclosures as of the annual reporting period beginning on 1 January 2024
The International Sustainability Standards Board (ISSB), created by IFRS Foundation to develop sustainability reporting standards, convened on 16 February 2023 about the Exposure Drafts IFRS S1 General Sustainability-related Disclosures (draft S1) and IFRS S2 Climate-related Disclosures (draft S2). Amongst other items, the ISSB tentatively decided to require that both IFRS S1 and IFRS S2 are effective for annual reporting periods beginning on or after 1 January 2024. Thus, companies would be required to disclose against these standards in 2025, referring to the 2024 financial year.
NGOs bring legal action against BNP Paribas over fossil fuel expansion financing
On the 23rd of February 2023, Oxfam France, Friends of the Earth France (Les Amis de la Terre) and Notre Affaire à Tous announced the launching of a legal action against the bank BNP Paribas for the financing of new oil and gas projects. This legal action is based on the alleged failure to comply with the climate duty of vigilance under the French Duty of Vigilance Law, and follows the formal notice delivered to the bank on the 26th of October 2022. According to Oxfam France, “BNP Paribas is Europe’s largest and fifth worldwide funder of fossil fuel expansion”.
This action is the first climate lawsuit against a commercial bank, according to the announcement on Oxfam France’s website.
Complaint with the Portuguese Security Markets Commission about Sonae’s reporting failure on plastic use
On the 22th of February 2023, the NGOs Sciaena and ZERO, in partnership with ClientEarth, announced the filing of a complaint with the Portuguese Security Markets Commission for the non-compliance by Sonae Group of its reporting duties regarding plastic use in the 2021 financial statements. This complaint was based on the sustainability reporting duties provided for in NFRD, and considering the high presence of plastic in Sonae Group business model.
Shift Project published paper on how the UN Guiding Principles may assist companies to respect human rights when responding to climate change
On February 2023, Shift Project published the paper “Climate Action & Human Rights: How the UN Guiding Principles can help companies respect human rights when responding to climate change”. This paper delivers a practical indication on how the UN Guiding Principles may assist companies to address human rights in their climate change strategy, by adopting a human rights lens. The paper focuses on the areas in which companies are investing in, but where a shortage of consciousness may be identified as regards the potential human rights impacts involved.
Authors: Ana Carina Duarte and Inês Crispim