In the context of the
COP 21, the French Parliament adopted, on July 22, 2015, the
Energy Transition Bill (the "Bill"), which is currently
being reviewed by the French Constitutional Court prior to its
publication in the Official Gazette. In essence, the Bill provides
for a national low-carbon strategy, as an implementation of the
decision 1/COP 16 (Cancun 2010) and of the European Regulation (525/2013) "on a
mechanism for monitoring and reporting greenhouse gas emissions and
for reporting other information at national and Union level
relevant to climate change."
The strategy, as defined by Article 48 of the Energy Transition
Bill, will allocate carbon budgets (i.e., greenhouse gas emission
thresholds) between key sectors and will provide sectoral and
national guidelines to meet the defined targets. This strategy will
cover, in particular, sectors that are not included in the
European Union's Emission Trading System. The implementing
decrees will define both carbon budgets and a roadmap. The roadmap
will take into account French international and European
undertakings as well as the competitiveness issues in sectors
facing international competition. In addition, governments will
have to assess the potential social, economical, and environmental
impacts of these new tools.
The Bill will add new reporting obligations for institutional
investors. To date, institutional investors are required to
indicate in their annual report how their investment policies
include social and environmental dimensions. Pursuant to the Bill,
institutional investors will have to demonstrate how these policies
contribute to energy transition and to mention their efforts to
meet the objectives of limiting global warming. If their
contribution is below the "indicative
targets"—determined in keeping with the low-carbon
strategy—institutional investors will have to justify in
their annual report the reasons for their insufficient
contribution. Moreover, institutional investors will have to
provide data on their exposure to climate risks.
Finally, the Bill will extend the reporting obligations applicable
to certain types of companies. Public companies will have to
provide in their annual report a list of measures implemented to
mitigate the climate-change-related financial risks and to respect
the national low-carbon strategy. Similarly, all limited liability
companies whose turnover will exceed the threshold (fixed by
decree) will have to include in their business report the impact on
climate change resulting from the use of the services and goods
they provide, along with the existing obligations to assess the
social and environmental impacts of their activities. These new
obligations will apply not only to limited liability parent
companies but also to their subsidiaries and controlled
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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A new Spanish Law on air pollution has been published and is
likely to lead to increasingly strict controls on air emissions
for many sectors.
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