The REP Wrap
Your weekly summary of corporate sustainability news.
The Dutch Court of Appeal has overturned a ruling about Shell’s emissions, in a potentially major legal decision. A district court had previously ordered the Oil & Gas giant to reduce its emissions by 45% by the end of the decade, on human rights grounds, but Shell has won its appeal. The judge said it was not legal to impose decarbonisation duties on Shell, adding the firm was making sufficient progress on Scope 1 and 2 emissions already, and there was not enough evidence it needed to cut its Scope 3 by 45% – or that such a reduction would contribute to global decarbonisation (Shell’s activities may simply be undertaken by another company). The Court of Appeal affirmed that it is a human right to be protected from the effects of climate change, and that companies have a legal duty to respect human rights in their activities.
The European Commission’s academic arm has outlined 21 priority areas for the Ecodesign for Sustainable Products Regulation (ESPR). The Joint Research Council recommended lawmakers focus on the following products: textiles and footwear, furniture, tyres, mattresses, detergents, paints and varnishes, lubricants, cosmetics, toys, fishing gears, absorbent hygiene products, iron and steel, commodity chemicals, non-ferrous, non-aluminium metal products, aluminium, plastic and polymers, pulp and paper and glass. The emphasis should be on durability, recyclability and recycled content, it added. The ESPR sets design criteria for Europe’s most polluting products and, while not binding, the new report will inform the Commission’s new ESPR work plan.
A new paper has been published on how boards can best address sustainability. Authored by Andreas Rasche, a well-known corporate sustainability professor at Copenhagen Business School, the paper explores board structure, the “collective mindset” of directors, and the development of relevant competencies.
Governments have rubber-stamped standards for the creation of carbon credits under a UN-run carbon market this week. The rules, agreed by negotiators at COP29, are part of Article 6 of the Paris Agreement, which provides guidelines for how countries can work together to trade carbon offsets to help meet their Nationally Determined Contributions.
Meanwhile, the International Organisation of Securities Commissions, better known as IOSCO, has published its final report on voluntary carbon markets. The document includes 21 areas of ‘good practice’ aimed at strengthening the financial integrity and orderly functioning of carbon credit markets.
The EU has published its latest set of Frequently Asked Questions about the Corporate Sustainability Reporting Directive. The document seeks to offer more legal clarity around the first set of European Sustainability Reporting Standards, in areas where there was confusion.
The number of companies reporting on all three of CDP’s environmental topics has skyrocketed over the past year. According to the disclosure platform’s latest annual report, submissions covering climate, water and forests have leapt from 850 in 2023, to 3,537 in 2024. More than 12,500 SMEs reported through CDP’s dedicated SME questionnaire, mostly in Europe and Asia.
The International Auditing and Assurance Standards Board has published the final version of its standards for sustainability assurance. IOSCO backed the ISSA 5000 standards in a statement, and the European Commission is expected to integrate them into its auditing requirements for CSRD.