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Lisa DeMarco

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The Global Risk Institute (GRI) yesterday published a paper titled “Climate-Related Legal Risks for Financial Institutions: Executive Brief” (the “Paper”), authored by Dr. Janis Sarra with the Canada Climate Law Initiative and Resilient LLP’s Lisa DeMarco. The Paper provides an overview of the many risks now faced by the financial sector including regulatory liability, securities law litigation, fiduciary duty risk, professional indemnity insurance risk, “greenwashing” litigation, commercial contract risk, litigation against governments, and civil lawsuits. The Paper also provides “best practice tips” for financial institutions, risk managers, and board risk committees to consider and implement as a means to limit their liability and reduce their climate-related risks. These recommendations include, among others: Undertaking a high-level assessment of litigation exposure across loan and policy books, investment portfolios, and operations; Embedding management of climate-related risks as part of core business risk management; Investigating and disclosing climate-related vulnerabilities in investment portfolios; and Creating an action plan to reduce Scope 1, 2, and 3 carbon emissions as evidence of a financial institution’s due diligence in addressing climate-related financial risk. The first page of the Paper appears below. The full text of the paper is available on the Global Risk Institute website here. For further information or to discuss the contents of this bulletin, please contact Lisa DeMarco at lisa@resilientllp.com.

The Taskforce on Scaling Voluntary Carbon Markets (TSVCM) today launched its Phase II Report (the Report), setting out an accelerated roadmap to a scaled, high-integrity voluntary market for the trading of carbon credits. The TSVCM is a private sector-led initiative working to scale an effective and efficient voluntary carbon market (VCM) to meet the goals of the Paris Agreement. The TSVCM was launched by Mark Carney, UN Special Envoy for Climate and Finance and former governor of the Bank of Canada and the Bank England and is chaired by Bill Winter, Group Chief Executive, Standard Chartered (read our earlier bulletins on the TSVCM here and here). Resilient LLP’s Lisa DeMarco is a member of the Legal principles and contracts Working Group of the TSVCM and Resilient LLP is a proud signatory of the TSVCM endorsement letter. This bulletin briefly summarizes the Report’s key points:   Objectives and focus of the TSVCM. The Report indicates that the TSVCM’s primary focus is to raise public awareness of the climate and co-benefits of VCMs and engage with stakeholders to drive both demand and supply in these markets.   Governance. The Report summarizes the Terms of Reference of the new umbrella governance body, which will have a mandate to (i) mitigate climate change and accelerate the transition to net zero; (ii) establish Core Carbon Principles (CCP) eligibility guidelines and additional attributes, an assessment framework for standard setters, and eligibility principles for suppliers and validation and verification bodies (VVBs); (iii) oversee standard setting organizations adherence to the CCPs; (iv) coordinate the work of, and manage interlinkages between, governance bodies; and (v) serve as a steward for the VCM. In addition, the TSVCM is seeking recommendations on the following five topics ahead of establishing the new umbrella body: • Modalities and procedures for the Board of Directors; • Transparency mechanism; • Grievance mechanism; • Transversal…

The Taskforce on Scaling Voluntary Carbon Markets (the TSVCM) today released its Phase 2 Public Consultation Report (the Report). The Report provides background on TSVCM activities and current thinking in support of consultations launched today to help inform and provide stakeholder feedback for the Phase 2 Final Report, to be published in July (read our previous bulletin on the TSVCM’s Phase 1 Final Report on creating large-scale carbon credit trading markets here). The TSVCM is conducting public consultation between May 21 and June 21, 2021 on the proposed governance design and preliminary recommendation guidelines from interested parties, particularly those interested in being a Founding Sponsor, Independent Board Member, Expert Panel Member or Executive Secretariat Host for the new governance body. Interested parties are encouraged to contact Lisa DeMarco at lisa@resilientllp.com to discuss opportunities for engagement with the TSVCM. Background. The TSVCM was launched in 2020 by Mark Carney, UN Special Envoy for Climate Action and Finance and former governor of both the Bank of Canada and the Bank of England, and is chaired by Bill Winters, Group Chief Executive, Standard Chartered, and sponsored by the Institute of International Finance (IIF) through the leadership of Tim Adams, President and CEO, with Annette Nazareth, former Commissioner of the US Securities and Exchange Commission, serving as TSVCM’s Operating Lead. Objectives and focus of the TSVCM. The Report provides the objectives and focus of the TSVCM, which include increasing public awareness of the climate and co-benefits associated with voluntary carbon markets (VCM). In addition, the TSVCM focuses on: High-integrity carbon credits and robust, transparent, and liquid markets; Addressing the oversight needs for an at-scale market; Legal principles and contracts through harmonization and liquidity by streamlining standard Terms of Use and developing general trading terms; Credit level integrity with respect to Core Carbon Principles (CCPs)…