IBA European Regional Forum – Nordic Region: Copenhagen seminar with focus on ESG reporting and green marketing and recent political developments in the region

After a very long period on virtual platforms, the ERF Nordic Region has the pleasure of an in-person seminar in Copenhagen on 23 May 2022. The gathering also marked the first time that many of the current members of the ERF Nordic Region met in person.

The day was spent with external speakers that had been invited to bring perspectives on two of the focus areas of the Nordic Region in 2022, which includes ESG as well as the reaction to audit and other consultancy firms incorporating law firms and expanding their legal advisory services. In addition, the former prime minister of Denmark, Lars Løkke Rasmussen, also came by to discuss the current political situation in the Nordic Region with a focus on the security situation.

Key take-aways from the discussions:

1. Lars Løkke Rasmussen, former prime minister of Denmark (2009-2011 & 2015-2019): Perspectives on the political collaboration in the Nordics and the Baltics with a focus on the expansion of the EU towards the east as well as the NATO alliance’s meaning for the Nordic and Baltic countries in light of the situation in Russian and Ukraine

• From Lars Løkke Rasmussen’s perspective, the Russian invasion in Ukraine made it “crystal clear” that things are changing and has been changing for a while in Europe and welcomes Sweden and Finland’s historical applications to join NATO.
• The invasion constituted a “wake-up-call” to Europe by empathizing the challenges regarding dependence on Russian energy, miscalculation of the Europe’s security landscape having distributed the ‘peace dividend’ after the fall of the Berlin wall, etc.
• We should be less naïve, take greater responsibility for our own safety and destiny in all perspectives – this means both in military co-operations and business-vise.
• The expansion of EU in the last decades opened up numerous possibilities for both the Baltic- and Scandinavian countries as likeminded small economies in the EU.

2.  Lise Mejholm, Nasdaq Nordics: Nasdaq’s work with the ESG Reporting Guide and learnings in that regard including recent trends

• Nasdaq creates the bridge between the investor and the co-operations with an essential focus on creating a more sustainable capital market, which at the same time is transparent and sufficient.
• Nasdaq’s initiative involves that Nasdaq, in their transactions, tradings and listings, gather information about sustainable bonds, which potentially leads to companies being flagged as a green designation or transaction. The criteria for being “green” is based on the EU taxonomy.
• In 2017, Nasdaq made the first ESG-reporting guide, which is a way to help companies on which areas they can be more sustainable. This guide was updated in 2019, where Nasdaq included the newest regulation in the area, new reports etc. The ESG-reporting guide is reported on by the issuers through assessments within four recommended areas, which hereafter preferably is evaluated by a third party, before Nasdaq collects the information. The reports from Nasdaq with issuers’ information is made available to investors against a fee.
• Further, Nasdaq have created a portal called “ESG footprint”, where investors can see the issuers’ impact in relation to use of water, carbon, ect., On the basis of this portal, the investors can collect knowledge which can help them create their personal portfolio from both a risk perspective, as well as what is what the individual view as “good investments”.
• Even though, the ESG-report is currently a voluntary reporting framework, Nasdaq expect that it move toward actual requirements for companies to prepare.

3.  Henrik Øe, former Advocate General at the Court of Justice of the European Union and former Danish Consumer Ombudsmand and now partner at Gorrissen Federspiel: Perspectives on the work of the Court of Justice of the European Union and EU regularity initiatives and trends within the area of green marketing

• Henrik Øe the process for the word of the Court of Justice of the European Union and the General Advocates role. He emphasized that the Court works completely independent, also from their own member states.
• In relation to green claims, the Court has developed a notice on this, which sets out that green factual claims and statements are, as a point of departure, not forbidden as long as they are not in violation with the provisions of the UCP Directive 2005/29/EF.
• A proposal to amendments in the Directive is currently being discussed in the Council with the purpose to make regulation more clear and sufficient in the area. This involves amendments to Article 6 and Article 7, as well as Annex I.
• Further, a certification scheme is to be developed to make sure that companies’ sustainability labels will be legitimate.
• He also touched upon the guidelines from the Danish Consumer Ombudsman which sets out the applicable principles companies can conduct green marketing e.g. the fact that claims should be factually correct and substantiated.

4.  Paul Mollerup, CEO of the Association of Danish Law Firms: Perspective on competition in the market for legal services including perspectives on key competitors and expected regulatory initiatives

• The overall perspective of the Association of Danish Law Firms regarding the issue on regulation of competition in the legal sector is that they want to welcome competitors on equal terms in the market.
• Their perspective is that lawyers do not have monopoly in Denmark, since a distinction must be made between lawyer as a profession, the law industry and legal services. As for legal services, there are no restrictions in Denmark on who can deliver legal services, but there are restrictions on using the title “lawyer”.
• Therefore, the Association of Danish Law Firms finds that the market for delivery of legal services is an open market of which lawyers, using the protected title, constitute less than half of the market. This distinction is important, because only lawyers working under the protected title can deliver advice using that title which is required to be independent.
• The Danish Competition Council recently prepared a report, which encouraged new regulation to increase competition on the legal services market. However, the Danish Ministry of Justice have decided to only pursue few recommendations from the Danish Competition Council noting that the interest in protection the rule of law and basic legal rights takes precedence over increasing competition witing legal services. The Association of Danish Law Firms is pleased with this position.

After a full afternoon with interesting speakers and good discussions in the group bring perspective from the various jurisdictions, we finished the days with a nice dinner and more conversations.

The day therefore brought extremely interesting perspectives on everything from Russia invasion into Ukraine, views on the Baltics and their relationship to Russia and Europe, explanation of Finish history in the region, understanding the feelings from Sweden on abandoning neutrality for the first time since 1814, world trade, power balance in EU post-Brexit, law firm structures and competition, ESG, "Green washing", free speech and the ability to attract and retain talent (among the new generation of young lawyers) and alternative profit sharing models etc.