European Corporate Governance Institute (ECGI)’s Post

Thank you, Emily Low, Dentons Rodyk, Singapore Management University, and SMU Yong Pung How School of Law, for the kind invitation to participate in this dialogue on climate and sustainability. I loved engaging with a diverse group of legal professionals who attended this event. It was a great panel discussion with Harro Van Asselt, Sim Ting, and Jonathan Guwe, thoughtfully moderated by Emily Low. One question at the end of the discussion stood out in particular: "If you have two projects—one with lower returns but delivering climate and social impact vs. one that has higher returns but no climate impact—which would be implemented by the private sector?" This question touches on a key issue in scaling actions and investments that drive climate impact. Market incentives and laws need to account for the value of our ecosystems and societal impact. Carbon pricing, pricing of negative externalities, human rights, and community impacts are some examples where laws and regulations around pricing/subsidies, mandates, and disclosures change market incentives, leveling the playing field for the private sector to invest and take action. This is not solely the responsibility of the public sector. The private sector plays an equally important role in engaging governments, advocating for forward-leaning climate and sustainability laws/regulations, and providing government bodies with expert technical input to ensure the practicality and effectiveness of these policies. The legal profession has an important role to play in helping shape what is needed into appropriate laws and regulations. It’s inspiring to see over 300 legal professionals deeply engaged in this agenda. Thanks again to Dentons and SMU for organizing this important dialogue.

Serendipity: a jury finds Trump guilty just as Science Based Targets initiative CEO Luiz Fernando do Amaral continues an engrained pattern -- strikingly similar to Mr Trump's -- of asserting absurdities https://lnkd.in/eUdCzDJX -- or, in technical academic terms, bullshit -- ie nonsense presented as sense. https://lnkd.in/eSkVMXsM Perhaps Mr Amaral believes the nonsense he utters. Or, as any intelligent human could also reasonably surmise, perhaps Mr Amaral is *purposefully* asserting absurdities. What is clear is that he is trucking in inaccuracies that strikingly resemble what he accuses of others (ie Jungian projection, or gaslighting.) "I will not indulge gossip that appears to be fuelled by a gross misunderstanding of the SBTi’s standard setting process or by sensationalistic untruths, and which has the effect of undermining the work of the entire institution." "gossip" So Bloomberg makes stuff up? Or quotes sources it hasn't vetted for reliability? "gross misunderstanding of the SBTi’s standard setting process" Ironically, it is the SBTi Board that is *on the record* with the grossest (in all senses of the word) misunderstanding of SBTi's standard setting process. The 9 April Board Statement https://lnkd.in/esGAX_iT that remains unretracted states: "SBTi has *decided* to extend their use [environmental attribute certificates, including but not limited to voluntary carbon markets] for the purpose of abatement of Scope 3 related emissions beyond the current limits." [emphasis added] I say "unretracted" as SBTi Technical & Scientific Advisory Group members submitted a Formal Complaint requesting a retraction -- which SBTi has inexplicably refused to do SBTi asserts the 9 April Statement has been "misinterpreted" & that it was really a "strategic steer". Both assertions fit the technical definition of bullshit. SBTi would respect its TAG & SAG by retracting the Statement if it truly wished for accurate interpretation. "The SBTi will not shy away from the hard questions..." Again: Bullshit. The TAG & SAG have requested a meeting with Mr Amaral, and he has not even responded to their request. And: on 15 Feb 2021 (after years of respectful internal engagement) I submitted a Formal Complaint asking SBTi *hard questions* -- backed up by scientific studies & comprehensive evidence. SBTi has yet to even initiate adjudication of the appeals process, 3+ years later. This is literally the definition of shying away from hard questions. The one place I fully agree with Mr Amaral is on the "sensationalist untruths" that have "the effect of undermining the work of the entire institution." Except: SBTi itself is the source of the untruths.

#ECT, #ISDS, green transition claxon ‘Conflicts between International Climate Law and Investment Arbitration: A Proposed Exception to the Full Reparation Standard without Moving the Goalposts’ by doctoranda Claudia Wortmann.

While COP 29 in Baku has put carbon offsetting at the forefront of the negotiations, this market-driven solution to environmental conservation tends to modify the habits and traditional way of life of Indigenous populations, especially by restricting communities’ use of their land and natural resources. During the ICAC Workshop, I had the opportunity to comment Nabintu Wa Nciko's paper on The Ogiek Community’s Rights Violations from Carbon Market Deal and reflect on how the actors of the carbon offset industry must be held liable for the human rights violations occurring within this industry. Thank you to Nabintu for her interesting paper and thanks to the conference organisers prof. Aart Jonkers, Aukje van Hoek and prof. Ianika Tzankova and all the academics and practitioners for the insightful discussions.

Oh, and another absurdity asserted by Science Based Targets initiative CEO Luiz Fernando do Amaral last week: "All voices will be heard in our consultation process, including and importantly those from the Global South which have been largely absent or ignored in this debate. We are focused on the work, not on hearsay, and will be judged by the quality and impact of our standards.” https://lnkd.in/eUdCzDJX This statement implies that SBTi stands in solidarity with the Global South. In order to take this statement seriously at face value, Mr Amaral would have had to have created a track record of solidarity with the Global South. But evidence documents the exact opposite: SBTi irrationally bars use of the *only* science based target setting method (the Center for Sustainable Organizations (CSO) Context-Based Carbon Metric) that applies an "equity tilt" favoring the Global South with reduced decarbonization burden, and greater decarbonization burdens for the Global North that bears greater responsibility for causing climate change. An August 2022 peer-reviewed study by Saphira Rekker (a member of the SBTi Scientific Advisory Group) & colleagues https://lnkd.in/e8qkQvB2 assessed the primary extant science based target (SBT) setting methods -- 2 created by SBTi (Absolute Contraction Approach (ACA) and Sectoral Decarbonization Approach (SDA) & 2 created independent of SBTi (CSO and Greenhouse gas Emissions per Unit of Value Added (GEVA) -- on 3 criteria of compliance with the Paris Agreement. The 3rd criterion: "the methodology should account for 'common but differentiated responsibilities' in addressing climate change. This means that companies in developed nations have a greater responsibility in mitigating climate change than companies in developing countries due primarily to their greater historic contributions to climate change and mitigation capabilities." Later, Rekker et al state: "we find that the SDA and Context-based Carbon Metric by the CSO are the only two methods that meet our two conditions, whilst the CSO also meets the desirable condition of differentiated responsibilities, with companies in developed countries required to decarbonise much faster than those in developing countries." So: if Mr Amaral and SBTi *truly* seek to act in solidarity with the Global South, then why do they continue to bar the ONLY target setting method that applies an equity tilt? And: why is SBTi instead pursuing a controversial approach of Scope 3 offsetting, which *may* benefit the Global South (or may result in further Global North colonization), instead of pursuing a path of less resistance by simply allowing the application of an equity tilt that more tangibly and assuredly benefits the Global South?

We are delighted to share that our paper, published in the International Journal of Finance & Economics (ABS 3-Star), is among the top 10 most-cited papers from January 2022 to December 2023. The paper is titled "Corporate Environmental Disclosure and Earnings Management—The Moderating Role of Corporate Governance Structures" and co-authored by experienced researchers, including Dr Khaldoon A. from University of Glasgow Adam Smith Business School, Schotland, the UK and Dr Lara Al-Haddad from Yarmouk University, Jordan. This paper explores whether the relationship between corporate environmental disclosure and earnings management is influenced by the corporate governance characteristics of listed firms in Jordan. For more details, please find the link below: https://lnkd.in/e8P2jMz9

#SMUYPHSL 𝗡𝗼𝘃𝗲𝗺𝗯𝗲𝗿 𝗥𝗲𝘀𝗲𝗮𝗿𝗰𝗵 𝗦𝗲𝗺𝗶𝗻𝗮𝗿 𝗛𝗶𝗴𝗵𝗹𝗶𝗴𝗵𝘁𝘀: 5 November: Prof. Giuseppe Marino (Università degli Studi di Milano) delivered a seminar titled 𝘊𝘰𝘰𝘱𝘦𝘳𝘢𝘵𝘪𝘷𝘦 𝘛𝘢𝘹 𝘊𝘰𝘮𝘱𝘭𝘪𝘢𝘯𝘤𝘦 𝘞𝘪𝘵𝘩𝘪𝘯 𝘵𝘩𝘦 𝘌𝘯𝘷𝘪𝘳𝘰𝘯𝘮𝘦𝘯𝘵𝘢𝘭, 𝘚𝘰𝘤𝘪𝘢𝘭, 𝘢𝘯𝘥 𝘎𝘰𝘷𝘦𝘳𝘯𝘢𝘯𝘤𝘦 (𝘌𝘚𝘎) 𝘍𝘳𝘢𝘮𝘦𝘸𝘰𝘳𝘬, introduced and moderated by SMUYPHSL’s Asst Prof Vincent Ooi. Prof. Marino explored the intersection of ESG principles and tax compliance, discussing frameworks like the OECD’s Tax Control Framework and the European Trust and Cooperation Approach. He emphasized how reputational risks, such as tax scandals, highlight the need for cooperative compliance to foster sustainability and transparency. 18 November: Asst Prof. Yueming Yan (The Chinese University of Hong Kong) presented the 𝘜𝘱𝘥𝘢𝘵𝘦𝘥 𝘐𝘓𝘖 𝘚𝘵𝘢𝘯𝘥𝘢𝘳𝘥𝘴 𝘢𝘯𝘥 𝘛𝘩𝘦𝘪𝘳 𝘐𝘮𝘱𝘢𝘤𝘵 𝘰𝘯 𝘌𝘤𝘰𝘯𝘰𝘮𝘪𝘤 𝘈𝘨𝘳𝘦𝘦𝘮𝘦𝘯𝘵𝘴, with the session chaired by SMUYPHSL’s Asst Prof. Mark McLaughlin. Asst Prof. Yan examined the legal implications of recent expansions in ILO standards, particularly the addition of a safe and healthy working environment principle. Her analysis delved into how these updates reshape the interpretation of labor provisions in trade and investment agreements. 19 November: Prof. Armin Cuyvers (Leiden Law School) delivered the Jean Monnet Seminar on 𝘚𝘰𝘷𝘦𝘳𝘦𝘪𝘨𝘯𝘵𝘺, 𝘗𝘰𝘱𝘶𝘭𝘪𝘴𝘮 & 𝘗𝘳𝘰𝘵𝘦𝘤𝘵𝘪𝘰𝘯𝘪𝘴𝘮: 𝘞𝘩𝘢𝘵 𝘈𝘴𝘪𝘢 𝘢𝘯𝘥 𝘌𝘶𝘳𝘰𝘱𝘦 𝘔𝘢𝘺 𝘓𝘦𝘢𝘳𝘯 𝘧𝘳𝘰𝘮 𝘌𝘢𝘤𝘩 𝘖𝘵𝘩𝘦𝘳 𝘰𝘯 𝘌𝘧𝘧𝘦𝘤𝘵𝘪𝘷𝘦 𝘊𝘰𝘭𝘭𝘢𝘣𝘰𝘳𝘢𝘵𝘪𝘰𝘯, moderated by SMUYPHSL’s Prof. Pasha L. Hsieh. Prof. Cuyvers reflected on global challenges like climate change and AI amidst rising populism and protectionism. Using the EU and ASEAN as examples, he underscored the importance of legal mechanisms for effective international collaboration while rethinking constructs like sovereignty in an evolving geopolitical landscape. Each seminar provided fresh perspectives on law, governance, and international frameworks, addressing critical global challenges. We thank all distinguished speakers for their valuable insights. #SMULAW #SMUSOL #ShapingtheFutureofLaw #ESGCompliance #ILOStandards #GlobalCollaboration

I recently wrote about the background to the overturning of the Chevron Principles. As Kenneth writes here, in an increasingly turbulent economy and environment, all decisions that have been made by administrative agencies will be transferred to the courts. These decisions lack the necessary scientific and domain expertise. By limiting the administrative agencies' authority to create and enforce regulations, the Supreme Court has opened the door to the Balkanization of the U.S. economy. The vacuum in regulatory making at the federal level will mean that important issues will increasingly be addressed by the states. The U.S. will likely become a collection of smaller regional and state economies, often organized around ideology and local business interests, rather than a large, cohesive economy of 330 million people subject to the same rule of law. This risks becoming a highly inefficient economy. This kind of judicial overreach could significantly slow down efforts to address climate change. Here, Kenneth writes, "The abandonment of the Chevron Principles will eliminate the predictability that is essential to a healthy economy and stable capital markets. Virtually every rule that federal agencies have ever imposed will now be subject to challenge. Judges and juries without professional training will be deciding issues that have previously been decided, or at least informed, by expert and scientific authorities. This is important because it means that when contentious issues are left to experts, we can predict with some accuracy what the outcome will be. When those same issues are left to judges and juries, I fear that this will not be the case." I cannot help but be concerned about the US economy becoming like this.

We are happy to announce that we have been shortlisted at the FT Innovative Lawyers Europe 2024 Awards in the category of Innovative lawyers in unlocking finance! This award category recognises projects that are innovative and have a trailblazing approach to environmental legislation reforms to foster a more secure and attractive climate for investment. Our shortlisted project was led by Partner Casper Herler ⭐ #FTInnovativeLawyers #Awards2024 #EnvironmentalLegislation #InvestmentProjects Financial Times

🎓 Milestone Achieved! 📚 I'm excited to share the submission of my final dissertation project, tackling a critical contemporary issue at the intersection of international investment law and climate change mitigation: Research Question: "How can International Investment Agreements (IIAs) be reformed to achieve a balance between states' obligations to meet the temperature goal through mitigation of high greenhouse gas-emitting sources under the Paris Agreement and investor rights, while promoting a just transition?" Central Idea: My research suggests a broader approach to Just Transition and to leverage that to reform IIAs by expressly incorporating it. This framework aims to: - Safeguard states' policy space for climate action - Redefine investors' legitimate expectations and obligations - Transform the Investor-State Dispute Settlement (ISDS) mechanism Key findings include: - Analysis of current obstacles in IIAs hindering climate action - Critique of existing reform attempts - Suggestions for expressly integrating Just Transition principles into IIA preamble and substantive provisions - Potential drawbacks of the suggested framework This work contributes to the ongoing dialogue on aligning international investment law with urgent climate goals, offering a nuanced perspective on balancing economic interests and environmental imperatives. I'm immensely grateful to my supervisor, Ana Maria Daza, for not just guiding me but also for challenging me to critically think about different perspectives of the recognised issue. My sincere thanks to University of Edinburgh Law School for providing the resources and support necessary to conduct this in-depth analysis. I'm eager to engage with professionals and researchers in international law, climate policy, and sustainable finance. Let's connect and discuss how we can drive meaningful change in global investment practices while mitigating climate change! #InternationalInvestmentLaw #ClimateAction #JustTransition #ParisAgreement #SustainableFinance #GraduateResearch #UniversityofEdinburgh #LawSchool #Dissertation #UNCTAD