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Climate – the law governing operations that emit Greenhouse Gases (e.g. carbon trading) is addressed by Environment and Climate Change international guides, in respect of ESG: a. Is there any statutory duty to implement net zero business strategies; b. Is the use of carbon offsets to meet net zero or carbon neutral commitments regulated; c. Have there been any test cases brought against companies for undeliverable net zero strategies; d. Have there been any test cases brought against companies for their proportionate contribution to global levels of greenhouse gases (GHGs)?
a. Is there any statutory duty to implement net zero business strategies;
There are no such statutory duties to implement net zero business strategies in Sweden. However, a proposal for a European Union (“EU”) directive on corporate sustainability due diligence (the “CSDDD”) is close to being adopted. It will require businesses within the scope of the directive to adopt and put into effect a transition plan for climate change mitigation which aims to ensure, through best efforts, that the business model and strategy of the company are compatible with the transition to a sustainable economy and with the limiting of global warming to 1.5 °C in line with the Paris Agreement and the objective of achieving climate neutrality as established in Regulation (EU) 2021/1119 (the “European Climate Law”). Once adopted, the CSDDD must be implemented by the Member States two years from the entry into force of this directive.
The CSDDD, according to the most recently agreed text, will apply to EU companies which individually or on group level have:
- 1000 employees on average, and,
- EUR 450 million in net worldwide turnover.
Also, companies or groups which have entered into royalty agreements where the total royalties received from these agreements exceeds EUR 22.5 million are within scope of the CSDDD, if the company itself, or as the head of a group, reported a net worldwide turnover exceeding EUR 80 million worldwide in that same fiscal year.
Additionally, the CSDDD will also apply to non-EU companies if they either generated a net turnover of more than EUR 450 million in the Union in the financial year preceding the last financial year, are a ultimate parent company of a group that on a consolidated basis reaches the aforementioned threshold in the financial year preceding the last financial year, or has entered into royalty agreements where the total royalties received from these agreements exceeds EUR 22.5 million in the union, are within scope of the CSDDD, if the company itself, or as the head of a group, reported a turnover exceeding EUR 80 million in the union.
b. Is the use of carbon offsets to meet net zero or carbon neutral commitments regulated;
As a Member State of the EU, Sweden is part of the EU Emission Trading System (“ETS”). The EU ETS is designed to support the EU’s overall goal to reduce carbon emissions by at least 55% by 2030 compared to 1990 levels, in line with the European Green Deal, the European Climate Law and the EU’s commitment to global climate action under the Paris Agreement. The system operates on the ‘cap and trade’ principle which covers around 40% of the EU’s greenhouse gas emissions. Offsetting is allowed in relation to emissions verified as captured and transported for permanent storage to a facility for which a permit is in force in accordance with Directive 2009/31 (the “EU Carbon Capture and Storage Directive”) and in respect of emissions of greenhouse gases which are considered to have been captured and utilised in such a way that they have become permanently chemically bound in a product so that they do not enter the atmosphere under normal use, including any normal activity taking place after the end of the life of the product.
In addition, the EU is currently preparing a new directive on Green Claims. The proposed directive sets out requirements on, inter alia, transparency and accuracy, which have to be met in order for a company to be allowed to make certain green claims on products, such as claims relating to making carbon offsets in order to meet net zero or carbon neutral commitments.
c. Have there been any test cases brought against companies for undeliverable net zero strategies;
To the extent of our knowledge, there have not been any such cases brought in Sweden. However, such cases have been brought against unsubstantiated sustainability claims in relation to products, see question 12.
d. Have there been any test cases brought against companies for their proportionate contribution to global levels of greenhouse gases (GHGs)?
To the extent of our knowledge, there have not been any such cases in Sweden.
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Biodiversity – are new projects required to demonstrate biodiversity net gain to receive development consent?
The Swedish Environmental Code (Sw. (Miljöbalken (1998:808)) governs environmental matters, including those related to biodiversity and land development. The code is designed to promote sustainable development in a way that ensures a healthy and good environment for present and future generations. When it comes to new projects and development consent, the Swedish Environmental Code sets out a framework that requires consideration of environmental impacts in collaboration with relevant authorities and/or municipalities. This includes the assessment of potential effects on biodiversity. The code emphasizes the importance of protecting valuable natural and cultural environments. Developers are normally required to conduct environmental impact assessments when their projects are likely to have significant environmental effects.
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Water – are companies required to report on water usage?
There is no general requirement for companies to report their water usage. However, under the Swedish Environmental Code, activities that may have a significant impact on the environment are subject to reporting and permit requirements. This includes the use of water resources, which can be a critical environmental issue, particularly in areas where water is scarce or where there are sensitive ecosystems.
Companies that engage in operations that require large amounts of water, or that may affect water quality, are typically required to obtain permits. These permits can include conditions related to the monitoring and reporting of water use. The specifics of these requirements may vary depending on the nature of the business, the amount of water used, and the potential impact on the environment.
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Forever chemicals – have there been any test cases brought against companies for product liability or pollution of the environment related to forever chemicals such as Perfluoroalkyl and Polyfluoroalkyl Substances (PFAS)?
There have been some high-profile cases against companies for product liability or pollution of the environment related to PFAS, notably:
Case T 486-23 of the Swedish Supreme Court concerned product liability related to PFAS. The case was brought by some 150 residents against Ronneby Miljö och Teknik AB, a company wholly owned by Ronneby municipality supplying drinking water to the urban areas in the municipality. The action was based on the Swedish Product Liability Act, which transposes Directive (85/374/EEG) (the “EU Product Liability Directive“) and concerned the company’s distribution of PFAS-contaminated drinking water. The plaintiffs alleged personal injury due to PFAS exposure as a result of the company’s distribution of PFAS-contaminated drinking water and demanded that the company be declared liable to compensate them for the personal injury The Supreme Court examined whether the plaintiffs suffered personal injury through elevated PFAS levels in their blood. Aligning the term “personal injury” in the Product Liability Act with that of the Swedish Tort Liability Act, the Court emphasized the necessity of a tangible impairment of the body. It further underscored that an increased risk of future harm alone did not constitute personal injury.
The Supreme Court nevertheless concluded that the contaminated water significantly impacted the plaintiffs’ bodies as “the considerable physical deterioration manifested in the high levels of PFAS in each appellant’s blood must be regarded as constituting an impairment which is a personal injury for the purposes of tort law”. Consequently, the Supreme Court held the company liable for compensating the plaintiffs for these personal injuries. However, the Court refrained from deciding the determination of the extent to which the personal injuries had given rise to consequences of the injuries entitling the plaintiffs to compensation as well as the amount of the compensation.
On 9 April 2024, the Land and Environmental Court of Appeal ordered the Swedish Armed Forces to pay Uppsala Vatten och Avfall, a company owned by the municipality of Uppsala, approx. SEK 37 200 000 in damages plus interest and legal costs for damages caused by PFAS contamination in soil and groundwater in areas where the Swedish Armed Forces had used firefighting foam containing PFAS.
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Circularity – the law governing the waste hierarchy is addressed by the Environment international guide, in respect of ESG are any duties placed on producers, distributers or retailers of products to ensure levels of recycling and / or incorporate a proportionate amount of recycled materials in product construction?
There are no such general obligations placed on producers, distributers, or retailers. However, there are industry specific legislation setting out the responsibility of producers of e.g. packaging and producers of non-reusable products.
For instance, pursuant to the Swedish Ordinance on Producer Responsibility for Packaging (Sw. Förordningen (2022:1274) om producentansvar för förpackningar), partly transposing Directive 2019/904 on the reduction of the impact of certain plastic products on the environment, a number of duties are placed on producers of packages, such as:
- Producers are required to limit unnecessary packaging;
- All packaging entering the Swedish market must be reusable or recyclable;
- Producers of plastic bottles made primarily from PET must include at least 25% recycled plastic by the end of 2024, unless their volume is above three liters or if they are produced for specific medical use;
- Plastic lids and bottles have to be connected;
- Producers must report annually to the Swedish Environmental Protection Agency ( Naturvårdsverket), the amount of packaging provided on the Swedish market, including the amount of recycled plastic used in PET bottles.
Furthermore, according to the Swedish Ordinance on Single-use Products (Sw. Förordningen (2021:996) om engångsprodukter), fast food providers and providers of single-use cups, are obliged to offer the possibility to have their products served in a re-usable box/cup and to take effective measures so that their boxes and cups can be reused several times.
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Plastics – what laws are in place to deter and punish plastic pollution (e.g. producer responsibility, plastic tax or bans on certain plastic uses)?
Rules concerning plastics in Sweden are dispersed across various acts and ordinances, notably the following.
Levy on plastic bags
Pursuant to the Swedish Act on Tax on Plastic Carrier Bags (Sw. Lagen (2020:32) om skatt på plastbärkassar), a levy is imposed on plastic carrier bags. The law defines plastic carrier bags as bags that consist of more than a negligible amount of plastic and are intended for consumers to pack goods at the place they are supplied or to carry goods from that point, and which are not intended for long-term use. The levy is set at SEK 3 per bag (approx. EUR 0.30), with a reduced amount of SEK 0.30 for bags with a wall thickness less than 15 micrometers and a volume not exceeding seven litres. Tax liable are authorised ware housekeepers, manufacturers of taxable goods, and those who import or receive taxable goods from another EU Member State. Exemptions from tax liability, include personal imports not exceeding 40 plastic carrier bags and goods for personal use by individuals or their families.
The Government decided in 2023 that the tax will be abolished in November 2024 due to high administrative costs and increased usage of other plastic products by consumers.
Mandatory return systems
The Swedish Ordinance on Producer Liability for Packaging (Sw. Förordningen (2022:1274) om producentansvar för förpackningar) sets out a mandatory return system for beverage containers, specifically for plastic bottles and metal cans, intended for the Swedish market. It requires producers that professionally bottled beverages or professionally import beverages in such containers to ensure their inclusion in an recognized return system, with an exemption for dairy products (which is set to expire in 2029). The ordinance defines the term ‘plastic’ as polymer that can be used as the main structural component in final products and ‘polymer’ in alignment with the EU REACH Regulation (1907/2006). The ordinance also covers the marking of containers to indicate the return system and refund value, public information duties and prohibitions on the transfer of containers not included in a recognized return system.
Ban on certain single-use products
The Swedish Ordinance on Single-use Products (see also above question 5) aims to reduce littering and promote a circular economy by regulating single-use products in Sweden. Additional provisions can be found in other ordinances concerning specific products like chemicals, packaging, tobacco, balloons, wet wipes, and in an ordinance on littering fees for certain products. Definitions within the ordinance clarify terms such as polymers, plastics, and various types of single-use items, including cups, food containers, and plastic bags. A significant aspect of the ordinance is the prohibition of certain single-use plastic products, such as cotton swabs, expanded polystyrene containers, cutlery, and plates. It mandates that alternatives to single-use cups and food containers be offered, with a focus on reusable options, and sets a target to reduce the consumption of single-use plastic cups and food containers by 50% by 2026 compared to 2022 levels. The ordinance also includes requirements for marking and consumer information to encourage responsible disposal and reduce littering.
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Equality Diversity and Inclusion (EDI) – what legal obligations are placed on an employer to ensure equality, diversity and inclusion in the workplace?
In Sweden, the legal obligations for employers regarding Equality, Diversity, and Inclusion (EDI) in the workplace are primarily governed by the Discrimination Act (Sw. Diskrimineringslagen (2008:567)), which aims to combat discrimination and promote equal rights and opportunities regardless of gender, gender identity or expression, ethnicity, religion or other belief, disability, sexual orientation, or age.
Key Provisions of the Discrimination Act
- Prohibition of Discrimination: Employers are prohibited from discriminating against employees and job applicants on any of the grounds mentioned above. Discrimination can be direct, such as treating someone less favorably because of their age, or indirect, such as implementing a policy that disproportionately affects a certain group without a legitimate aim.
- Active Measures: Employers are required to take active measures to promote equal rights and opportunities in the workplace. This involves regular analysis of the work environment to identify risks of discrimination, taking steps to prevent harassment, and promoting equal employment opportunities for all, especially in recruitment, training, and promotion processes.
- Victimization: The act also protects employees from victimization, which refers to adverse treatment of an individual who has made a complaint about discrimination or has participated in an investigation of such a complaint.
- Accessibility for Persons with Disabilities: Employers must ensure that the workplace is accessible to persons with disabilities, which may involve making reasonable adjustments to the work environment or providing support that enables the persons concerned to carry out their work.
Employer Responsibilities
- Policy Implementation: Employers should implement policies that outline their commitment to EDI and the steps they will take to ensure a non-discriminatory work environment.
- Training and Awareness: Employers should provide training to all staff, including management, on EDI issues to raise awareness and ensure that the principles of non-discrimination are understood and practiced.
- Complaints Procedure: A clear procedure should be in place for employees to report discrimination or harassment. Employers must investigate such complaints promptly and take appropriate action.
- Documentation and Follow-up: Employers are required to document their EDI efforts and the results of these efforts. This documentation can be requested by the Equality Ombudsman (Sw. Diskrimineringsombudsmannen), the government agency responsible for monitoring compliance with the Discrimination Act.
Enforcement and Compliance
The Equality Ombudsman oversees the enforcement of the Discrimination Act. Employers who fail to comply with their obligations under the Act may face legal action, which may result in orders to take corrective measures and/or financial penalties.
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Workplace welfare – the law governing health and safety at work is addressed in the Health and Safety international guide, in respect of ESG are there any legal duties on employers to treat employees fairly and with respect?
While there are no explicit provisions in Swedish legislation stating that employers shall treat employees fairly and with respect, there are a number of acts to that effect.
Work Environment Act (Arbetsmiljölagen)
The Swedish Work Environment Act (Sw. Arbetsmiljölagen (1977:1160)) places a duty on employers to provide a safe working environment that prevents bad health and accidents. The act covers various aspects of the work environment, including:
- Physical working conditions,
- Psychological and social work conditions,
- Opportunities for personal development and training, and
- Prevention of work-related injuries and illnesses
Discrimination Act (Diskrimineringslagen)
See Question 7.
Co-Determination at Work Act (Lagen om medbestämmande i arbetslivet)
The Co-Determination at Work Act (Sw. Lagen (1976:580) om medbestämmande i arbetslivet) is a law that provides employees with the right to influence the work environment and the terms of employment. It establishes the framework for negotiations between employers and employees’ unions and includes provisions for employee participation in decision-making processes.
Annual Leave Act (Semesterlagen)
The Annual Leave Act (Sw. Semesterlagen (1977:480)) ensures that employees are entitled to annual leave, which is an important aspect of employee welfare. This act stipulates a minimum amount of at least 25 paid vacation days that employees are entitled to each year, contributing to their well-being and work-life balance.
Parental Leave Act (Föräldraledighetslagen)
The Parental Leave Act (Sw. Föräldraledighetslagen (1995:584)) provides for parental leave in connection with childbirth or adoption, of a combined 480 days/child to be divided between the parents. The allowance for 390 of these days is based on the income of the parent taking the leave, while the allowance for the other 90 days is at minimum level of 180 SEK/day. If the parents have shared custody, 90 days are reserved for each parent, while the rest may be divided as the parents see fit. This act supports the welfare of employees by allowing them to take time off work to care for their children, promoting a balance between work and family life.
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Living wage – the law governing employment rights is addressed in the Employment and Labour international guide, in respect of ESG is there a legal requirement to pay a wage that is high enough to maintain a normal standard of living?
In Sweden, the concept of a living wage is not explicitly mandated by law. Sweden has a well-established tradition of collective bargaining agreements that play a significant role in determining wages. These agreements are negotiated between trade unions and employers or employers’ associations and are legally binding for the signatory parties. A large proportion of the Swedish workforce is covered by collective agreements.
The EU have adopted Directive (EU) 2022/2041 on Adequate Minimum Wages in the EU, which mandate adequate minimum wages. However, Sweden fulfils the requirements in the Directive by having a sufficiently high proportion of the workforce being covered by a collective agreement. Therefore, Sweden is not required to implement a minimum wage in law.
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Human rights in the supply chain – in relation to adverse impact on human rights or the environment in the supply chain: a. Are there any statutory duties to perform due diligence; b. Have there been any test cases brought against companies?
a. Are there any statutory duties to perform due diligence;
Currently, there are no statutory duties in Swedish law to perform due diligence in relation to human rights or the environment. However, the CSDDD, which is mentioned under question 1, will require EU Member States to implement measures such as ensuring that companies conduct risk-based human rights and environmental due diligence by e.g. integrating due diligence in their policies and risk management systems
b. Have there been any test cases brought against companies?
There has been one high-profile case concerning responsibility in the supply chain concerning waste management in the mining operations. The case involved Arica Victims, a Swedish company representing 796 Chilean citizens, and Boliden Mineral AB, a Swedish mining and smelting company. The plaintiffs claimed that Boliden exported 20,000 tons of smelting waste containing arsenic and other heavy metals to Chile in the mid-1980s, which caused environmental and health damages to the residents in the Polygono area. The defendant argued that it acted in accordance with the applicable laws and standards at the time, and that it was not responsible for the waste management by the Chilean company Promel.
The case was heard by the Skellefteå District Court and the Court of Appeal of Northen Norrland, which both applied Chilean law to the case. The courts rejected the majority of the claims, finding that the arsenic levels in the plaintiffs’ urine did not exceed the threshold for damage under Chilean law, and that there was no adequate causal link between Boliden’s actions and the measured arsenic levels. The courts dismissed the case and ordered the plaintiffs to pay Boliden’s legal costs.
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Responsibility for host communities, environment and indigenous populations – in relation to adverse impact on human rights or the environment in host communities: a. Are there any statutory duties to perform due diligence; b. Have there been any test cases brought against companies?
a. Are there any statutory duties to perform due diligence;
The Swedish legal order has rules adopted to protect human rights, the environment, and the rights of indigenous populations, such as the Sami people. This framework is based on both national legislation and international agreements to which Sweden is a party.
- Environmental Law: Swedish environmental legislation is comprehensive, and the central act is the Environmental Code. Companies operating in Sweden must comply with the Environmental Code, which includes conducting environmental impact assessments for activities that may have a significant impact on the environment.
- Human Rights: Sweden is a signatory to various international conventions, including the European Convention on Human Rights (the “ECHR”). The ECHR is applicable as Swedish law pursuant to the Swedish Act on the European Convention on Human Rights (Sw. Lagen (1994:1219) om den europeiska konventionen angående skydd för de mänskliga rättigheterna och de grundläggande friheterna). Additionally, as a member of the EU, Sweden is bound by the EU Charter of Fundamental Rights. The Instrument of Government (Sw. Regeringsformen), which is a central part of the Swedish Constitution, also contains a catalogue of fundamental rights that protect human rights and freedoms.
- Rights of Indigenous Populations: The Sami people, an indigenous population in Sweden, have specific rights recognized by Swedish law such as the Reindeer Husbandry Act (Sw. Rennäringslagen (1971:437)) and the Sami Parliament Act (Sametingslagen (1992:1433)). These laws are related to land use, cultural preservation, and political representation. Companies engaging in activities that may affect the Sami are to a large extent obliged to engage in consultations.
- Rights for national minorities: Pursuant to the Act on National Minorities and Minority Languages (Sw. Lagen (2009:724) om nationella minoriteter och minoritetsspråk), Sweden recognizes five national minorities, which are the Sami, Swedish Finns, Tornedalers, Roma, and Jewish people. These groups have a historical presence in Sweden and distinctive cultural identities. The rights of these minorities include the right to education and communication in their minority languages, as well as measures to preserve and develop their cultural heritage.
b. Have there been any test cases brought against companies?
There have been several instances where Sami villages have filed lawsuits against inter alia wind power projects that they claim infringe on their traditional lands and negatively impact their reindeer herding practices. These cases often involve complex issues of indigenous rights, environmental law, and commercial interests.
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Have the Advertising authorities required any businesses to remove adverts for unsubstantiated sustainability claims?
The Swedish consumer ombudsman has brought several cases against unsubstantiated sustainability claims and the Patent and Market Courts have found several of them to be prohibited. As a general rule, traders have the burden of proof that the claims are accurate (Sw: vederhäftighet). The Patent and Market Courts have held that the threshold for accuracy regarding sustainability statements in marketing is high. This means e.g. that consumers must have access, in direct proximity to the sustainability claim, to information explaining the contents of the claim.
For instance, in the judgment of 23 February 2023 in PMT 17372-21, the Patent and Market Court prohibited a major Swedish milk-producer from using the expression “net zero carbon footprint” (Sw. netto noll klimatavtryck) on milk packeting, mainly because the net zero carbon footprint would be achieved 100 years after the emission event.
Furthermore, The Consumer Ombudsman, in the judgment of 5 September 2022 in PMT 1782-21, challenged the use of certain claims and certifications by a Swedish organic food retailer in its marketing, as being vague and potentially misleading regarding the ecological and organic content of the products. The claims and certifications included “Cosmos Organic” and “Ecocert Cosmos Organic”. The Patent and Market Court of Appeal ruled that references to eco-labels/environmental certifications create the impression that the goods have a positive impact on the environment. Since the trader had not demonstrated that consumers had received information explaining the impact, the marketing was considered misleading and unfair.
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Have the Competition and Markets authorities taken action, fined or prosecuted any businesses for unsubstantiated sustainability claims relating to products or services?
To the extent of our knowledge, no such actions have been taken in Sweden.
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Have there been any test cases brought against businesses for unsubstantiated enterprise wide sustainability commitments?
To the extent of our knowledge, no such cases have been brought in Sweden.
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Is there a statutory duty on directors to oversee environmental and social impacts?
There is not such express duty. However, as stated under question 17, pursuant to the Annual Accounts Act (Sw. Årsredovisningslagen (1995:1554)), companies of a certain size are required to prepare a sustainability report. The sustainability report, which inter alia shall address the company’s environmental and social impact, is a part of the annual report of a company, and pursuant to the Annual Accounts Act, board members and the CEO are responsible for the contents therein. In addition, board members and the CEO may be held personally liable for the performance of his or her duties, if he/she intentionally or negligently causes damage to the company or if he/she (in line with any individual) commits a criminal act, for instance participates in a decision that entails that e.g. that an environmental crime is committed. Hence, arguably, there is an implied duty for board members and the CEO to oversee environmental and social aspects.
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Have there been any test cases brought against directors for presenting misleading information on environmental and social impact?
To the extent of our knowledge, no such cases have been decided by Swedish courts.
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Are financial institutions and large or listed corporates required to report against sustainable investment criteria?
Under Chapter 6 of the Annual Accounts Act, which transposes the Corporate Sustainability Reporting Directive 2022/2464 (the “CSRD”), companies are required to prepare a sustainability report if they meet at least two of the following three criteria:
- A balance sheet total of more than 175 million SEK during the last two years.
- Net sales of more than 350 million SEK during the last two years.
- An average of more than 250 employees during the last two fiscal year.
Such companies must include non-financial information in their annual reports, or in a separate sustainability report, which shall cover environmental, social, and employee-related matters, respect for human rights, anti-corruption, and bribery issues. The report shall also include a description of the business model, policies, due diligence processes, outcomes, and risks related to these areas.
Further, see also under question 18.
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Is there a statutory responsibility on businesses to report on managing climate related financial risks?
See answer to question 17. Further, regarding sustainable investment criteria for the financial sector specifically, pursuant to Regulation (EU) 2019/2088 on sustainability‐related disclosures in the financial services sector (the “SFDR”), financial market participants shall publish on their websites information about their policies on the integration of sustainability risks in their investment decision‐making process.
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Is there a statutory responsibility on businesses to report on energy consumption?
According to the Swedish Energy Auditing Act (Sw. Lagen (2014:266) om energikartläggning i stora företag), companies with at least 250 employees and an annual turnover exceeding EUR 50 million or an annual balance sheet total exceeding EUR 43 million, shall make an energy audit at least every four years. An energy audit should include a detailed review of the company’s energy use and proposals for cost-effective measures to save energy and improve energy efficiency. The results of the energy audit should be presented in a report. Companies subject to the obligation to carry out an energy audit shall, at the request of the Swedish Energy Agency, provide the information and documents necessary for supervision.
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Is there a statutory responsibility on businesses to report on EDI and / or gender pay gaps?
Pursuant to the Discrimination Act, (see further under question 7), in order to discover, rectify, and prevent arbitrary differences in wages and other employment terms and conditions between women and men, the employer shall study and analyse wage discrepancies between women and men, who perform work which is considered equal or equivalent. This information should be reported to the trade union to which the employer is bound through a collective agreement.
There is no similar provision on reporting on ethnicity pay gaps.
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Is there a statutory responsibility to report on modern day slavery in the supply chain?
If the company qualifies under the criterion of the Annual Accounts Act (see question 17), the company is required to submit information regarding the consequences of the operations on, inter alia, human rights. Pursuant to the wording of the CSRD Directive, the provision is to be read in the light of international conventions, e.g., ECHR, and ILO conventions, why it should also include reporting on modern day slavery in the supply chain.
Furthermore, EU legislators recently reached an agreement on the Forced Labour Regulation, which lays down rules prohibiting economic operators from placing and making available on the Union market or exporting from the Union market products made with forced labour. ‘Forced labour’ is defined as forced or compulsory labour, including forced child labour, as defined in Article 2 of the Convention on Forced Labour, 1930 (No. 29) of the International Labour Organization, and the regulation includes a prohibition on products made with forced labour, including such that are offered through distance selling. The regulation is currently pending adoption and will apply as of 36 months following its publication.
Sweden: Environmental, Social and Governance
This country-specific Q&A provides an overview of Environmental, Social and Governance laws and regulations applicable in Sweden.
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Climate – the law governing operations that emit Greenhouse Gases (e.g. carbon trading) is addressed by Environment and Climate Change international guides, in respect of ESG: a. Is there any statutory duty to implement net zero business strategies; b. Is the use of carbon offsets to meet net zero or carbon neutral commitments regulated; c. Have there been any test cases brought against companies for undeliverable net zero strategies; d. Have there been any test cases brought against companies for their proportionate contribution to global levels of greenhouse gases (GHGs)?
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Biodiversity – are new projects required to demonstrate biodiversity net gain to receive development consent?
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Water – are companies required to report on water usage?
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Forever chemicals – have there been any test cases brought against companies for product liability or pollution of the environment related to forever chemicals such as Perfluoroalkyl and Polyfluoroalkyl Substances (PFAS)?
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Circularity – the law governing the waste hierarchy is addressed by the Environment international guide, in respect of ESG are any duties placed on producers, distributers or retailers of products to ensure levels of recycling and / or incorporate a proportionate amount of recycled materials in product construction?
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Plastics – what laws are in place to deter and punish plastic pollution (e.g. producer responsibility, plastic tax or bans on certain plastic uses)?
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Equality Diversity and Inclusion (EDI) – what legal obligations are placed on an employer to ensure equality, diversity and inclusion in the workplace?
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Workplace welfare – the law governing health and safety at work is addressed in the Health and Safety international guide, in respect of ESG are there any legal duties on employers to treat employees fairly and with respect?
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Living wage – the law governing employment rights is addressed in the Employment and Labour international guide, in respect of ESG is there a legal requirement to pay a wage that is high enough to maintain a normal standard of living?
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Human rights in the supply chain – in relation to adverse impact on human rights or the environment in the supply chain: a. Are there any statutory duties to perform due diligence; b. Have there been any test cases brought against companies?
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Responsibility for host communities, environment and indigenous populations – in relation to adverse impact on human rights or the environment in host communities: a. Are there any statutory duties to perform due diligence; b. Have there been any test cases brought against companies?
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Have the Advertising authorities required any businesses to remove adverts for unsubstantiated sustainability claims?
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Have the Competition and Markets authorities taken action, fined or prosecuted any businesses for unsubstantiated sustainability claims relating to products or services?
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Have there been any test cases brought against businesses for unsubstantiated enterprise wide sustainability commitments?
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Is there a statutory duty on directors to oversee environmental and social impacts?
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Have there been any test cases brought against directors for presenting misleading information on environmental and social impact?
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Are financial institutions and large or listed corporates required to report against sustainable investment criteria?
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Is there a statutory responsibility on businesses to report on managing climate related financial risks?
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Is there a statutory responsibility on businesses to report on energy consumption?
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Is there a statutory responsibility on businesses to report on EDI and / or gender pay gaps?
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Is there a statutory responsibility to report on modern day slavery in the supply chain?