Powering tomorrow Navigating the energy transition landscape 2024 - Flipbook - Page 27
The CSRD signi昀椀cantly expands the scope of
reporting requirements, introduces additional
sustainability reporting standards and adds an
audit requirement. Companies will also need
to disclose certain environmental-related key
performance indicators in accordance with the
Taxonomy Regulation.
These requirements will have important
downstream impacts: with improved data made
available through these disclosures, investors will
be able to gather better information to drive green
investments and make progress toward clean
energy goals.
Political uncertainty in the U.S. and UK
complicates sustainable investments
Political uncertainty around sustainable 昀椀nance
poses a serious risk to the long-term investments
necessary to facilitate the energy transition. New
infrastructure projects in power generation and
storage, for example, will take years just to come
online, let alone yield returns to investors—making
consistent policy crucial.
Yet, the U.S. is seeing signi昀椀cant political pushback
and polarization to environmental, social, and
governance initiatives (ESG) that threaten to
disrupt the green investment calculus. Policy
varies considerably depending on the state and
the political party in control of Washington, as
evidenced by the U.S.’s hasty decision to leave—
and then rejoin—the Paris Agreement in the
space of little more than a year. While the federal
government is now in the midst of a sustainability
push, many investors rightly wonder if a change
in political winds would bring a swift end to such
lucrative subsidies—potentially jeopardizing the
viability of their investments.
While the situation in the UK may not be as
politically fraught, there is still substantial
uncertainty surrounding the Government’s
policy approach to the clean energy transition.
The overall sustainable investment policy
framework, as well as speci昀椀c policy goals and
industry targets, may change, complicating the
environment for investors seeking to prioritize
complex, expensive, and long-term issues like
electric vehicle charging infrastructure.
The future of sustainable finance
From enforcement against greenwashing to the
state of economic incentives, stakeholders are
walking a tightrope when it comes to encouraging
investments in a sustainable future. Investors
should closely monitor the changing regulatory
landscape to protect their investments and
support a greener future.
‘‘
Hogan Lovells demonstrate an
excellent ability to anticipate
requests and changes to a complex
legal and regulatory environment.
‘‘
Additionally, in 2024 a subset of large companies
both operating and based in the EU will be subject
to the region’s Corporate Sustainability Reporting
Directive (CSRD), which requires comprehensive
disclosures on the impact of a company’s business
on people and the environment, as well as
sustainability issues a昀昀ecting the business.
Banking & Finance, Chambers Global, 2023
Hogan Lovells | Powering tomorrow: Navigating the energy transition landscape
27
