Environment

Deposit Return Scheme (DRS) for England, Wales and Northern Ireland

DEFRA published its response to the 2021 DRS consultation on 20 January 2023.

The DRS scheme was initially expected to be introduced in or around late 2024, however, in its response, DEFRA indicated an intention to introduce the scheme by 1 October 2025.

Relevant Sources:

Introducing a Deposit Return Scheme for drinks containers in England, Wales and Northern Ireland – government response (publishing.service.gov.uk)

The contents of this ESG timeline do not constitute legal advice and are provided for general information purposes only. Specific legal advice should be sought before taking any
action based on the contents of this timeline.

Environment

Scottish Deposit
Return Scheme

Scotland's DRS has been delayed until at least October 2025, pushed back from the previously anticipated date of 1 March 2024.

The Scottish DRS will make drinks producers legally responsible for the collection and management of drinks containers in preparation for recycling.

Relevant Sources:

Deposit Return – gov.scot (www.gov.scot)

Environment

Illegal deforestation in UK supply chains

The UK Government proposes to introduce a new law through the Environment Act to require large businesses with a turnover over a specified threshold to conduct supply chain due diligence on any forest risk commodity (or a product derived from it) used in their UK commercial activities, and report annually on their due diligence.

The commodities in scope are cattle (beef and leather), cocoa, coffee, maize, palm oil, rubber and soy.

Relevant Sources:

Written questions and answers –
Written questions, answers and statements –
UK Parliament

Environment

Energy savings opportunity scheme (ESOS)

ESOS is a mandatory energy assessment and energy saving identification scheme for large undertakings (and their corporate groups) that have 250 or more staff and/or an annual turnover exceeding £44m and a balance sheet exceeding £38m on 31 December 2022.

The compliance deadline for reporting to the Environment Agency in respect of ESOS phase 3 (covering the period 6 December 2019 to 5 December 2023) is 5 June 2024.

Relevant Sources:

Microsoft Word – ESOS Phase 3 changes June 2023 (publishing.service.gov.uk)

Environment

Climate Transition Plans

As part of the new sustainability disclosure proposals in the UK, UK financial institutions and listed companies will be required to publish climate transition plans detailing how they will adapt and decarbonise as the UK moves to net zero by 2050.

Following a consultation, which closed in February 2023, the UK Transition Plan Taskforce (TPT) is expected to publish a final Disclosure Framework and Implementation Guidance in October 2023.

Relevant Sources:

TransitionPlanTaskforce-Update-July2023-FINAL pdf (transitiontaskforce.net)

Environment

Single-use plastics ban

From 1 October 2023, retailers, takeaways, food vendors and the hospitability industry will no longer be allowed to sell single-use plastic plates, trays, bowls, cutlery, balloon sticks, and some types of polystyrene cups and food containers.

The new ban excludes plates, trays and bowls used as “shelf-ready pre-packaged food items” such as salads.

The ban will be enforced through civil sanctions, but with the possibility of criminal penalties for repeated breaches. The Government published guidance on 23 May 2023 to help businesses to prepare for the ban.

Relevant Sources:

Single-use plastics ban: plates, bowls, trays, containers, cutlery and balloon sticks – GOV.UK (www.gov.uk)

Environment

Levelling-up and Regeneration Bill 2022-23

On 29 August 2023, the Department for Levelling Up, Housing and Communities (DLUHC) announced that the Government will introduce amendments to the Levelling-up and Regeneration Bill 2022-23 to remove Habitats Regulations requirements on Natural England (NE) to issue guidance to local planning authorities (LPAs) on the nutrient neutrality to be achieved by new housing developments.

The Bill is currently at the report stage in the House of Lords. A fifth day of report stage is scheduled for 4 September 2023.

Relevant Sources:

Levelling-up and Regeneration Bill – Parliamentary Bills – UK Parliament

Environment / Governance

UK Sustainability Disclosure Standards

On 2 August 2023, the Department for Business and Trade (DBT) published guidance on the Government's framework to create UK Sustainability Disclosure Standards.

The guidance provides that UK Sustainability Disclosure Standards will set out corporate disclosures on the sustainability related risks and opportunities that companies face. The standards will form the basis of future legislative or regulatory requirements for corporate sustainability reporting.

The guidance sets out that:

• UK Sustainability Disclosure Standards will be based on the IFRS Sustainability Disclosure Standards issued by the ISSB; and
• By July 2024, the Secretary of State for Business and Trade will consider the endorsement of the IFRS Sustainability Disclosure Standards to create the UK Sustainability Disclosure Standards.

It is expected that UK endorsed standards will only differ from the global baseline if necessary for UK specific matters.

Relevant Sources:

UK Sustainability Disclosure Standards – GOV.UK (www.gov.uk)

Environment

Updated guidance
on misleading environmental claims

On 23 June 2023, the Committee of Advertising Guidance (CAP) and the Broadcast Committee of Advertising Guidance (BCAP) published updated guidance on misleading environmental claims.

The guidance comes after a line of decisions from the Advertising Standards Authority (ASA) finding that various companies had exaggerated their overall environmental credentials. The guidance is intended to draw on the principles from the CMA's September 2021 Guidance "Making environmental claims on goods and services".

Relevant Sources:

Update to CAP and BCAP guidance on misleading environmental claims – ASA | CAP

Environment

CMA guidance on sustainability collaboration

The CMA published draft guidance in relation to environmental sustainability agreements on 28 February 2023.

The draft guidance assists companies to assess whether their ESG arrangements (particularly Environmental Sustainability Agreements and Climate Change Agreements) are likely to be caught by the Chapter I prohibition in the Competition Act 1998.

The CMA consulted on the draft guidance from 28 February 2023 to 11 April 2023. A response to the consultation is awaited as well as the final guidance.

Relevant Sources:

Draft guidance on environmental sustainability agreements – GOV.UK (www.gov.uk)

Environment

MEES Regulations

From 1 April 2023, landlords will be prohibited from continuing to let commercial properties (regardless of when the lease was entered into) where the property has an EPC rating of "F" or less.

Local authorities have various enforcement powers, including the ability to impose financial penalties.

Relevant Sources:

Domestic private rented property: minimum energy efficiency standard – landlord guidance – GOV.UK (www.gov.uk)

Environment

Green Finance Strategy

The UK Government published an updated Green Finance Strategy in March 2023.

In the strategy report, the Government reaffirmed
its commitment to creating a UK Green Taxonomy
(a common framework for determining which activities can be defined as environmentally sustainable).

The Green Finance Strategy sets out various Government commitments in 2023 and early 2024. These include:

• A consultation on the UK Green Taxonomy (expected in Autumn 2023);
• Launching a call for evidence on scope 3 emissions reporting (in Q3 2023); and
• Engaging with stakeholders on an update to the Environmental Reporting Guidelines (in Q3 2023).

Relevant Sources:

Mobilising Green Investment – 2023 Green Finance Strategy (publishing.service.gov.uk)

Environment

Extended Producer Responsibility (EPR)

New Data Reporting Regulations came into force, requiring 'producers' caught under the new EPR regime to collect data for the packaging they handle and supply on the UK market.

The new EPR regime requires data to be reported during 2024 (or during 2023 for large organisations and data collection is required in order to calculate the waste fees of each producer payable under the new EPR regime when it comes into force.

On 25 July 2023, DEFRA announced that EPR will come into force in October 2025.

Relevant Sources:

Extended producer responsibility for packaging: who is affected and what to do – GOV.UK (www.gov.uk)

Environment

Net Zero Target Review

BEIS published the independent review of the Government's approach to delivering its net zero target by 2050 following a judicial review and High Court ruling in 2022 that the previous Net Zero Strategy was inadequate.

The Government was required to republish its Net Zero Strategy by March 2023. They did so in March 2023 under the policy paper, "Powering Up Britain".

Relevant Sources:

Powering up Britain – GOV.UK (www.gov.uk)

Social

Neonatal Care
(Leave and Pay) Act

The Neonatal Care (Leave and Pay) Act received Royal Assent on 24 May 2023 and will come into force in April 2025.

The Act introduces up to 12 weeks' leave and pay for employees who are caring for babies receiving neonatal care.

Relevant Sources:

Neonatal Care (Leave and Pay) Act 2023 – Parliamentary Bills – UK Parliament

The contents of this ESG timeline do not constitute legal advice and are provided for general information purposes only. Specific legal advice should be sought before taking any action based on the contents of this timeline

Social

Worker Protection (Amendment of Equality Act 2010) Bill

The Worker Protection (Amendment of Equality Act 2010) Bill seeks to create new legal liabilities for employers in relation to harassment of employees by third parties in the course of employment.

It also seeks to introduce a new proactive duty on employers to take reasonable steps to prevent sexual harassment of their employees.

The Bill passed through the House of Commons without amendment and no opposition being raised. It passed the Committee stage in the House of Lords on 14 July 2023. It is anticipated that the Report stage will commence in September 2023.

Relevant Sources:

Worker Protection (Amendment of Equality Act 2010) Bill Committee stage – Parliamentary Bills – UK Parliament

Social

Employment Relations (Flexible Working) Act

The Employment Relations (Flexible Working) Act received Royal Assent on 20 July 2023. It introduces key developments for employees seeking to make flexible working requests. These include:

• The right to make 2 flexible working requests
  in any 12-month period;
• An obligation on employers to consult with employees before rejecting a request for flexible working; and
• A deadline of 2 months for employers to decide whether a request for flexible working is to be granted, unless a longer period is agreed.

The Government has indicated an intention to create a "day one right" to make a flexible working request, but this is not yet in law.

Relevant Sources:

Draft Code of Practice on dismissal and
re-engagement – GOV.UK (www.gov.uk)

Social

Carer’s Leave Act

The Carer's Leave Act received Royal Assent on 24 May 2023. The Act gives certain employees who are unpaid carers a "day one right" to take up to 1 week (5 working days) of unpaid leave per year to care for a dependant.

Further regulations are awaited to detail how the rights afforded in this Act can be used.

Relevant Sources:

Carer's Leave Act 2023 – Parliamentary Bills –
UK Parliament

Social

Code of Practice on Dismissal and
Re-engagement

The Government published a draft copy of the Code of Practice on Dismissal and Re-engagement on 24 January 2023.

This set out the responsibilities employers hold when seeking to change contractual terms and conditions. It emphasised that dismissal and re-engagement should only be used as a last resort after all other options have been considered.

As it stands, the Draft Code allows an uplift of up to 25% on employee compensation by tribunals where the Code has not been reasonably followed.

A 12-week consultation on the Draft Code ended on 18 April 2023. A response to the consultation is awaited.

Relevant Sources:

Draft Code of Practice on dismissal and
re-engagement – GOV.UK (www.gov.uk)

Social

Ethnicity Pay Gap Reporting

Although ethnicity pay gap reporting will continue to be voluntary, Government Guidance was published on 17 April 2023 to assist businesses who want to publish data, including guidance on how to produce a diagnosis and action plan.

Relevant Sources:

Ethnicity pay reporting: guidance for employers – GOV.UK (www.gov.uk)

Social

Parker Review
Committee Report

The Parker Review Committee published its latest report on 13 March 2023, setting out the 2022 survey results of FTSE 100 companies on the ethnic diversity of their boards.

Many recommendations were made on targets for diversity in top UK companies and in relation to the reporting of diversity data.

Relevant Sources:

The Parker Review – Encouraging greater diversity of UK boards

Social

Government consultation on holiday entitlement for part-year workers following Harpur Trust v Brazel

The Government launched a consultation on holiday and entitlement pay for part-year and irregular hour workers on 12 January 2023. This comes following on from the Supreme Court ruling that part-year workers should not have their paid holiday pro-rated.

In brief, the consultation paper proposes a reversal of outcome of Harpur Trust v Brazel. Employers would be able to return to pro-rating holiday for part-year workers based on a 12.07% method.

The consultation closed on 9 March 2023.
A response is awaited.

Relevant Sources:

Calculating holiday entitlement for part-year and irregular hours workers – GOV.UK (www.gov.uk)

Environment / Governance

FCA consultation on Sustainability Disclosure Requirements (SDR), labelling and greenwashing

The FCA's consultation on SDR (CP22/20) closed on 25 January 2023.

SDR will require companies, certain financial institutions and occupational pension schemes to disclose sustainability-related information in their annual report.

Given the large amount of responses received (around 240 written responses), the FCA intend to publish the Policy Statement in Q4 2023. This is a further delay from the initially anticipated publication by the end of H1 2023.

The requirements will come into force on a staged basis after publication of the Policy Statement.

Relevant Sources:

FCA updates on its Sustainability
Disclosure Requirements (SDR) and investment labels consultation | FCA

Governance

FRC Consultation on the UK Corporate Governance Code

The Financial Reporting Council (FRC) released their consultation on the UK Corporate Governance Code in May 2023.

The consultation focused on the legislative and governance reforms proposed by the Government in its May 2022 consultation response titled "Restoring trust in audit and corporate governance".

The deadline for comments on the proposed changes is 13 September 2023.

Relevant Sources:

Consultations | Financial Reporting Council
(frc.org.uk)

Governance

Online Safety Bill

The long-awaited UK Online Safety Bill is the UK's response to the EU's Digital Services Act and would create a new regulatory regime to address illegal and harmful online content. The Online Safety Bill (as currently drafted):

Requires platforms to conduct risk assessment –
to manage and mitigate the risks of harm _
to individual users; _

Requires all big social platforms to offer the option –
of identity verification for adult users; and _

Creates new threatening communications offences. –

The Bill commenced its passage through the final stages in the UK Parliament after the third reading in the House of Lords took place on 6 September 2023. The House of Commons will now consider amendments made on 12 September 2023.

Relevant Sources:

Online Safety Bill – Parliamentary Bills – UK Parliament

Governance

Call for evidence on non-financial reporting requirements

The Department for Business and Trade (DBT) and Financial Reporting Council (FRC) published a call for evidence in relation to the non-financial reporting requirements that UK Companies are required to comply with.

The call for evidence was published on 8 June 2023 and closed on 16 August 2023. A more detailed public consultation is expected in 2024.

Relevant Sources:

Smarter regulation non-financial reporting review: call for evidence – GOV.UK (www.gov.uk)

Environment / Governance

UK Sustainability Disclosure Standards

On 2 August 2023, the Department for Business and Trade (DBT) published guidance on the Government's framework to create UK Sustainability Disclosure Standards.

The guidance provides that UK Sustainability Disclosure Standards will set out corporate disclosures on the sustainability related risks and opportunities that companies face. The standards will form the basis of future legislative or regulatory requirements for corporate sustainability reporting.

The guidance sets out that:

UK Sustainability Disclosure Standards will be –
based on the IFRS Sustainability Disclosure _
Standards issued by the ISSB; and _

By July 2024, the Secretary of State for Business –
and Trade will consider the endorsement of the _
IFRS Sustainability Disclosure Standards to create _
the UK Sustainability Disclosure Standards. _

It is expected that UK endorsed standards will only differ from the global baseline if necessary for UK specific matters.

Relevant Sources:

UK Sustainability Disclosure Standards – GOV.UK (www.gov.uk)

Governance

Digital Markets, Competition and Consumer Bill

The Digital Markets, Competition and Consumer Bill had its first reading on 25 April 2023. The House of Commons Committee Stage concluded in July 2023, with the dates for the Report Stage to be announced. It is expected that it will enter into force in 2024.

Amongst other things, the Bill will give the CMA powers to enforce certain consumer protection legislation directly and impose fines of up to 10%
of global annual turnover without the need to
go to court.

Relevant Sources:

Digital Markets, Competition and Consumers Bill – Parliamentary Bills – UK Parliament