In this year-end market alert, we provide an overview of regulatory and commercial developments in ESG in 2023 and what to expect in 2024.

ESG: 2023 in retrospect – 1. Robust regulation

Despite geopolitical and economic turbulence, 2023 was a year of growth for ESG. This growth can be attributed to increasingly stringent regulations coupled with a growing understanding of how such regulations affect the market and key trading partners. To echo Deborah Meaden in her keynote address at the Hogan Lovells 2023 ESG Game Changers Summit, “[regulation] is changing at the speed of knots. For business, that means there can be huge risks and huge opportunities.” The introduction of high-quality investor-level ESG disclosure requirements has supported the changing regulatory environment. The European Commission's adoption of detailed European Sustainability Reporting Standards (ESRS) in connection with the Corporate Sustainability Reporting Directive (CSRD) is likely to have far-reaching effects on a wider range of companies, particularly through the standardization and strengthening of ESG disclosure. Similarly, the UK Transition Plan Working Group has published its final disclosure framework, which sets out standards and guidance for entities designing their transition framework. ( Nicola Evansová, Patrik Sarch, Aun Hussain)