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COP26

Regulation

One of COP26’s overarching goals is to ‘secure global net zero and keep 1.5 degrees within reach’, with the UN calling on countries to phase out coal more quickly, reduce deforestation, accelerate the transition to electric vehicles and encourage investment in renewables.

Regulation is one of the key levers being used to accelerate this change. Governments are introducing tax incentives to encourage more sustainable business practices, while financial regulators increasingly recognize climate change as a material threat to market stability and are demanding more from financial institutions around how they test, plan for and disclose the climate risks they face. At the same time, the EU is rethinking its state aid rules to support the delivery of its Green Deal, and regulation is helping foster global convergence and comparability in sustainability disclosure.

But while regulation can be a catalyst, it can also be an obstacle. Meaningful progress on climate change will require unprecedented levels of collaboration between businesses, governments and civil society, yet participating in this effort could raise significant antitrust risks for corporations as they join forces with competitors.

Here, our teams share their insights on all aspects of climate-related regulation, including our work to advance thinking around corporate sustainability reporting. As a precursor to COP26 we will also be publishing a report that seeks to understand how ESG considerations could influence competition law to enable greater corporate cooperation.

Key thinking