Rolling back or building back better?

As governments globally introduce emergency support to combat the impacts of covid-19, there have been calls to ensure this is aligned with environmental, social, and governance (ESG) objectives. However, covid-19 has also prompted many governments to lift or suspend regulations to reduce burdens on corporates. Where does the balance lie? Global Counsel is tracking ESG policy measures globally – in stimulus packages, in bailout conditions and in related regulatory changes, such as lessening or strengthening ESG legislation – in order to understand whether ESG rhetoric is matched by reality, and to identify where policies and regulations are changing materially for corporates and investors.

In many countries there is a mix of both ESG conditionality and regulatory changes, which means that it isn’t easy to say which are ‘rolling back’ or ‘building back better’. To track both the risks and opportunities for corporates and investors, Global Counsel is weighing up the various measures in each jurisdiction. The map and accompanying table illustrate where there is evidence of E, S, or G measures in stimulus or bailouts and which sector(s) these affect. This is weighed against any evidence of a delay, lessening, or strengthening of existing regulation, which may also have a material impact on corporates and investors. In some places there is a clear move towards or away from attention to ESG factors, whereas in others the case is mixed.

This is a moving target as countries are only just starting to develop their recovery policies. Global Counsel will continue to track developments and we will regularly revise our analysis of how changes break down across E, S, and G factors.

Highlights to date:

• France stands out as the strongest ESG champion, attaching strict environmental conditions to bailout provisions in the transport sector and withholding support for companies based in tax havens;
• The US, Brazil and Australia stand out for rolling back ESG measures across all sectors, particularly environmental requirements.
• Most other countries are a mixed bag, in many cases with delays to environmental policies, alongside some strengthening of social and governance measures.

For more information and to receive bi-weekly updates, please contact [email protected]

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