Regulatory Radar

Following the revised Japan Revitalization Strategy in 2014, the Council of Experts Concerning the Corporate Governance Code was established in August of that year to formulate a Corporate Governance Code that would be adopted by the Tokyo Stock Exchange and applied to all companies, domestic or foreign, listed on the exchange. The Code outlines five general principles, focused on an overall goal of increasing mid- to long-term corporate growth.

As of Dec. 1, 2015, 154 companies have signed the American Business Act on Climate Pledge, representing operations in all 50 states, nearly 11 million employees, and more than $4.2 trillion in annual revenue. By signing this pledge, these companies demonstrate a commitment toward making improvements in their own practices and environmental targets, and voice support for a definitive resolution from the Paris climate change conference.

The EU is taking steps to reduce emissions from fluorinated greenhouse gases (F-gases,) including hydrofluorocarbons (HFCs). F-gases were adopted as replacements for ozone-depleting substances in sectors such as refrigeration and air-conditioning, but they too have been found to be damaging to the environment. Companies must report on production, import, export, feedstock use and destruction of fluorinated greenhouse gases and other greenhouse gases that contain fluorine.

In November of 2015, G20 leaders officially endorsed updates to the G20/OECD Principles of Corporate Governance. Originally released in 1999, and last revised in 2004, the Principles were once again in need of update following the rapidly changing landscape in both financial and corporate sectors, particularly due to the global financial crises of 2007/2008. According to a summary of the new Principles published in December of 2015, corporate governance is defined as “a means to create market confidence and business integrity, which in turn is essential for companies that need access to equity capital for long term investment.

Australia’s recently proposed Privacy Amendment (Notification of Serious Data Breaches) Bill 2015 impacts all entities covered by the Privacy Act 1988. The original act sets out rules for government agencies and private sector organizations to maintain and protect individuals’ private data, but does not require any specific reporting or notification in the event of a data breach. A draft bill is currently open to public comment until March 4, 2016. Once adopted, the bill would come into effect in 12 months.

In accordance with section 342 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, six federal agencies (Board of Governors of the Federal Reserve System, the Bureau of Consumer Financial Protection, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission) published the final standards for creating and monitoring diversity policies and practices in the entities they oversee on June 10, 2015.

On December 17, 2015, new EU data protection legislation was informally passed in the form of the EU General Data Protection Regulation (GDPR). The rules are expected to become official in the spring of 2016, at which point companies will have two years to adjust to the new regulations. According to a press release from the European Parliament: “Clear and affirmative consent to data processing, the right to be forgotten and strong fines for firms breaking the rules” are some of the new features. The hope is that by having one unified set of rules and processes in place, clarity will be increased for both firms and individuals.

Beginning January 1, 2012, California law required that large companies make public disclosures on the efforts to ensure that goods manufactured and sold were not produced by workers who were enslaved, coerced, or otherwise forced into labor. The law (California Civil Code Section 1714.43 - California Transparency in Supply Chains Act) is meant to promote greater accountability on firms to monitor their supply chains (whether domestic or international) for human trafficking.

The FDA Food Safety Modernization Act (FSMA) was signed into law by President Obama on Jan 4, 2011. It is intended to protect the public by allowing the FDA to take preventative, rather than reactionary approaches to food safety.

The Competition Ordinance came into full effect on December 14, 2015, after being introduced in 2010 and passed in 2012, giving businesses in Hong Kong ample time to comply with the new policies. The goal of the ordinance is to ensure that Hong Kong remains a free market by explicitly curbing anti-competitive measures, which will benefit consumers, businesses, and the economy as a whole down the line.

In September 2015, Democrats in the Senate outlined a new energy plan to reduce greenhouse gas emissions.

On February 9, 2016, the Supreme Court voted to block the Environmental Protection Agency's Clean Power Plan from going forward while the rule is challenged in court. This rule just became effective on December 22, 2015. It sought to limit the amount of carbon dioxide emissions produced by steam electric and natural gas fired power plants in the United States. Twenty-nine states and dozens of corporations and industry groups had issued a lawsuit challenging the rule. The court will hear arguments on June 2, 2016.