The global trend on sustainability is gaining momentum in many aspects. Corporate entities are being obliged to operate with more sophisticated social responsibility towards all stakeholders. This time we discuss the developing legal landscape of human rights due diligence, another elements in the “S” of the ESG (environment, social and governance) movement.
On 14 March 2022, the OECD published its long awaited commentary to the model GloBE rules. At more than 200 pages, the commentary will take some time to fully absorb. However, it appears that the guidance still leaves some fundamental issues unanswered, such as how the GloBE rules co-exist with the US’s GILTI regime, and what simplifications/safe-harbors will be available to taxpayers to reduce their compliance burden. It is expected that this will be further addressed in the implementation framework, for which a public consultation was launched on the same day.
The Financial Services Regulatory (FSR) Momentum Monitor is a horizon-scanning tool enabling financial service providers to plan and prepare for coming developments across the jurisdictions in which they operate. Grouping upcoming changes into key business-relevant themes, the FSR Momentum Monitor highlights the extent and expected impact of upcoming regulatory intervention in multiple jurisdictions across the globe.
In addition to the traditional (corporate and/or securities-based) ratings commonly obtained by an issuer in connection with an international debt offering, corporates may now avail themselves of a new metric — the ESG rating. To date, there is no consensus on how ESG ratings, which assess a company’s ESG performance, are derived or what they reflect. Baker McKenzie lawyers Rob Mathews and Ben Bierwirth from our London office consider some of the challenges posed by ESG ratings in the context of debt securities offerings.
Heightened geopolitical global activity can lead to an increase in cyber risk for businesses. “Grey zone” and “hybrid” are two terms relating to cyber attacks that are widely used at the moment. Both terms now typically relate to geopolitical activity; “grey zone” activity is activity by or attributed to a nation state actor which is between normal peacetime relations and traditional kinetic warfare. Hybrid is a reference to the fact that modern warfare is almost always a combination of traditional kinetic action and cyber (or other non-kinetic) activity.
Companies undertaking capital raisings can approach the world’s capital markets in various ways. Through an initial public offering, listing either in its home jurisdiction or cross-border, a company can access major global finance hubs and capital from a deep pool of investors around the world.
In addition, an IPO can help a company raise its profile with customers, suppliers and the media as well as providing it with an opportunity to improve internal systems and controls, and increase the general operating efficiency for the business to conform with the regulatory scheme for public companies.
We are delighted to have joined this ground-breaking initiative supporting The Payments Association and other private industry stakeholders in the creation of the Green Paper report examining the potential for Central Bank Digital Currencies, ‘A New Era for Money’. The paper advocates for closer public-private collaboration to advance exploration of a digital currency in the UK, before a real-world pilot of ‘digital pound’ (dSterling).
In response to increased global enforcement, Baker McKenzie partners developed their unique Investigations Academies, a highly practical and interactive offering that serves to train and educate clients in all aspects of dealing with internal and regulator-imposed investigations. These bespoke training sessions are designed to enhance a company’s existing compliance program and are targeted at increasing awareness within the compliance and legal functions, as well as the broader business leadership group, including HR, finance, commercial, IT and procurement. Click here to access the Investigations Academies brochure.
Beyond resilience, the supply chains of the future are expected to be sustainable, embracing ESG principles. In the seventh webinar of our Supply Chain Series, our panel of experts will discuss the emerging and anticipated business issues, practical applications and legal considerations that companies need to consider, as they integrate corporate governance into the value chain, look at access to medicines and medical devices in a post-pandemic era, explore sustainable alternatives such as corporate power purchase agreements, and navigate the growing convergence of antitrust and ESG.
On 18 February 2022, the OECD released a new public consultation document with respect to the draft model rules for Amount A. This time, the draft model rules cover the Tax Base Determinations building block which deals with enabling an MNE group in scope of Amount A to determine the taxable profit which will be partially reallocated to so-called market jurisdictions. This document comes only two weeks after the OECD issued its first extensive publication on Amount A covering the two components Nexus and Revenue Sourcing. It should be noted that the latest draft model rules are a work-in-progress and subject to changes. The OECD welcomes comments from the public before 4 March 2022, following which more detailed commentary on a number of technical items is expected to be released.