EDITORIAL

The evolution of sustainability regulations has gained further momentum this year - in the European Union, several plans, regulations and directives continue to build into the architecture of the European transition.
 
The Directive on Renewable Energies, progress on the European Duty of Care via the CS3D, the Deforestation Directive, the FuelEU Maritime initative, Initiative for Sustainable Fuel for Aviation, Draft Directive against Greenwashing in the marketing of products, Climate Stress Tests and increased consideration of climate issues in the portfolios of the European Central Bank are just a few examples of strategic and regulatory frameworks undergoing profound change.

Other regions and countries are not lagging behind, with, for example, the UK’s Green Finance Strategy, the new climate transparency obligations in Canada or the ESG Reporting obligations for listed companies in India.
 
In terms of legal obligations, the context is changing here too and two significant steps have been taken. Firstly, the United Nations resolution encouraging the International Court of Justice to define obligations in terms of climate responsibility. And secondly, inherited from the "soft law" on business and human rights proposed by the United Nations and the OECD, the French and German laws on duty of care already define a binding framework for companies, while waiting for the CS3D. An example of this is the proceedings initiated by a trade union and two NGOs representing Bangladeshi workers under the German Supply Chain Act, 10 years after the Rana Plaza tragedy, highlighting the fact that there is still a long way to go to build responsible supply chains.
 
This changing environment continues to put pressure on companies to be more transparent and to evolve their business models. All of this is leading the way to greater transparency and accountability, and these developments are of course forcing private sector actors to reorganise and re-evaluate priorities to comply with and minimise the environmental and social risks associated with their operations.
 
However, reporting and transparency do not necessarily imply true change – we need to truly transform business models from the inside to push for more positive impact and even towards a regenerative economy. And this is what will protect and support the activities of companies and the portfolios of financial players in the future.
 
For instance, the issue of water – which is crucial for our societies and economic activities, and which has already been greatly affected by the climate crisis here in Japan or in France, for example. And yet there is not much mention of it in the regulatory and legal frameworks mentioned above. It is therefore imperative to take this opportunity of evolution in the regulatory landscape to rethink the biggest challenges of our time and develop new models, strategic collaborative initiatives and new products that reflect the vision and values of organisations and their alignment with the SDG agenda, while complying with regulatory requirements.
 
This is certainly not only the direction of the future but also our only collective salvation, and this is what Ksapa and its ecosystem of partners and clients are working towards through our various activities and initiatives.
 
We look forward to discussing more on this subject!
 

Raphael Hara, Managing Director