ESG Global Vision

Environment, corporate governance

Varies between participating states 

CORSIA applies to airline operators who fulfil the following criteria:

• their annual CO2 emissions from international flights using aeroplanes with a take-off mass greater than 5,700kg exceed 10,000 tonnes (all major carriers meet this relatively low threshold);
• they are responsible for international flights (flights by state aircraft and humanitarian, medical, and firefighting flights, as well as flights before or after such flights which are carried out by the same aeroplane and are needed for these activities, are not included); and
• they are registered in one of the participating states (see the list as of 1 January 2026 here; notable omissions include India and China).

In 2010, the International Civil Aviation Organisation (ICAO), a United Nations Agency that sets global standards and regulations for international civil aviation, adopted a sectoral aspirational goal for carbon neutral growth from 2020 onwards. Whilst operational and technological improvements are seen as a key part of achieving this goal, the ICAO took the view that a market based scheme was required to fill the remaining emissions gap and to achieve carbon neutral growth. Accordingly, the International Standards and Recommended Practices for the implementation of CORSIA were adopted as an Annex to the Chicago Convention in 2016, to apply to all of ICAO’s 193 member states from 1 January 2019.

CORSIA is being implemented in three phases:

• The Pilot Phase (2021-2023) and the First Phase (2024-2026). During these phases participation by ICAO member states was voluntary. 126 member states participated, with flights between participating states subject to reporting and offsetting requirements.
• The Second Phase (2027-2035). During this phase, with some exemptions, such as for Least Developed Countries and Small Island Developing States, participation will become mandatory for all ICAO member states and all international flights will be subject to offsetting requirements. The Second Phase will be split into three-year compliance periods.

In scope airline operators are under the following obligations:

• To monitor and report emissions from international flights on an annual basis.
  • At the beginning of each 3-year compliance period, an operator is required to submit an Emissions Monitoring Plan to its administering state which, once approved, the operator will use for the entire compliance period.
  • Under the plan, the operator is required to monitor and record its fuel use for international flights over the course of each calendar year. The operator must then estimate their annual CO2 emissions and report them to the national authority of their administering state by 30 April the following year. To guarantee the accuracy of the data reported, operators will need their annual emissions report to be verified by an impartial third-party verification body prior to submission.
  • Aggregated emissions are required to be reported by each administering state to ICAO, which will publish the total emissions from individual operators.
• To offset their emissions.
  • Under the scheme, the administering state calculates the annual offsetting requirements for each operator by multiplying the operator’s CO2 emissions by a ‘Growth Factor’, which is calculated by the ICAO and represents the percentage growth of the aviation sector’s international CO2 emissions covered by CORSIA’s offsetting requirements in a given year compared to the sector’s baseline emissions (being 85% of 2019 emissions levels).
  • Upon completion of each 3-year compliance period, the operator will have to show they have met their offsetting requirements by purchasing and cancelling the appropriate number of certified CORSIA Eligible Emissions Units (“CEEUs”) (each representing a tonne of CO2). The price of these units varies considerably depending on the type of project ($0.50 to $45/tCO2e during 2020-2021 with a weighted average of $3.08/tCO2eq in 2021).
  • Operators can also reduce their offsetting requirements by using CORSIA Eligible Fuels (“CEFs”) that meet the CORSIA sustainability criteria, which includes fuels with at least 10% lower CO2e emissions on a life-cycle basis compared to a reference fossil fuel value of 89.1 gCO2e/MJ. It is worth noting that as the baseline for calculating emissions reduction targets is 85% of 2019 emissions levels, offsetting requirements will only cover the growth in emissions since 2019 and therefore it is anticipated that the percentage of their total emissions that operators will have to offset will remain modest for the first few years of implementation of the scheme.

For more information, please follow the link here.

Penalties and enforcement:

National aviation authorities of participating states determine the sanctions for non-compliance, so these vary between countries. In the UK, for example, typical civil penalties can include a £20,000 penalty with a further daily penalty of £500 for failing to: (i) apply or revise an emissions monitoring plan; (ii) monitor emissions properly; or (iii) submit emissions reports. In recent consultations, the UK government has indicated that the penalties for failing to cancel CEEUs on time in line with an airline’s offsetting requirements would be £100 for each uncancelled unit.

Law

Entry into force: 25 September 2020

National or foreign commercial companies (domiciled in the country) that voluntary decide to adopt the regulation

This administrative resolution establishes standards within the framework of good corporate governance aimed at ensuring equitable treatment for shareholders of the same class, transparency and ethics with respect to the relevant issues of the company (financial situation, performance and administration, ensuring the effectiveness of mechanisms of internal and external control. These rules are mandatory only for those companies that voluntarily decide to adopt them.

Environment, corporate governance

Varies between participating states 

CORSIA applies to airline operators who fulfil the following criteria:

• their annual CO2 emissions from international flights using aeroplanes with a take-off mass greater than 5,700kg exceed 10,000 tonnes (all major carriers meet this relatively low threshold);
• they are responsible for international flights (flights by state aircraft and humanitarian, medical, and firefighting flights, as well as flights before or after such flights which are carried out by the same aeroplane and are needed for these activities, are not included); and
• they are registered in one of the participating states (see the list as of 1 January 2026 here; notable omissions include India and China).

In 2010, the International Civil Aviation Organisation (ICAO), a United Nations Agency that sets global standards and regulations for international civil aviation, adopted a sectoral aspirational goal for carbon neutral growth from 2020 onwards. Whilst operational and technological improvements are seen as a key part of achieving this goal, the ICAO took the view that a market based scheme was required to fill the remaining emissions gap and to achieve carbon neutral growth. Accordingly, the International Standards and Recommended Practices for the implementation of CORSIA were adopted as an Annex to the Chicago Convention in 2016, to apply to all of ICAO’s 193 member states from 1 January 2019.

CORSIA is being implemented in three phases:

• The Pilot Phase (2021-2023) and the First Phase (2024-2026). During these phases participation by ICAO member states was voluntary. 126 member states participated, with flights between participating states subject to reporting and offsetting requirements.
• The Second Phase (2027-2035). During this phase, with some exemptions, such as for Least Developed Countries and Small Island Developing States, participation will become mandatory for all ICAO member states and all international flights will be subject to offsetting requirements. The Second Phase will be split into three-year compliance periods.

In scope airline operators are under the following obligations:

• To monitor and report emissions from international flights on an annual basis.
  • At the beginning of each 3-year compliance period, an operator is required to submit an Emissions Monitoring Plan to its administering state which, once approved, the operator will use for the entire compliance period.
  • Under the plan, the operator is required to monitor and record its fuel use for international flights over the course of each calendar year. The operator must then estimate their annual CO2 emissions and report them to the national authority of their administering state by 30 April the following year. To guarantee the accuracy of the data reported, operators will need their annual emissions report to be verified by an impartial third-party verification body prior to submission.
  • Aggregated emissions are required to be reported by each administering state to ICAO, which will publish the total emissions from individual operators.
• To offset their emissions.
  • Under the scheme, the administering state calculates the annual offsetting requirements for each operator by multiplying the operator’s CO2 emissions by a ‘Growth Factor’, which is calculated by the ICAO and represents the percentage growth of the aviation sector’s international CO2 emissions covered by CORSIA’s offsetting requirements in a given year compared to the sector’s baseline emissions (being 85% of 2019 emissions levels).
  • Upon completion of each 3-year compliance period, the operator will have to show they have met their offsetting requirements by purchasing and cancelling the appropriate number of certified CORSIA Eligible Emissions Units (“CEEUs”) (each representing a tonne of CO2). The price of these units varies considerably depending on the type of project ($0.50 to $45/tCO2e during 2020-2021 with a weighted average of $3.08/tCO2eq in 2021).
  • Operators can also reduce their offsetting requirements by using CORSIA Eligible Fuels (“CEFs”) that meet the CORSIA sustainability criteria, which includes fuels with at least 10% lower CO2e emissions on a life-cycle basis compared to a reference fossil fuel value of 89.1 gCO2e/MJ. It is worth noting that as the baseline for calculating emissions reduction targets is 85% of 2019 emissions levels, offsetting requirements will only cover the growth in emissions since 2019 and therefore it is anticipated that the percentage of their total emissions that operators will have to offset will remain modest for the first few years of implementation of the scheme.

For more information, please follow the link here.

Penalties and enforcement:

National aviation authorities of participating states determine the sanctions for non-compliance, so these vary between countries. In the UK, for example, typical civil penalties can include a £20,000 penalty with a further daily penalty of £500 for failing to: (i) apply or revise an emissions monitoring plan; (ii) monitor emissions properly; or (iii) submit emissions reports. In recent consultations, the UK government has indicated that the penalties for failing to cancel CEEUs on time in line with an airline’s offsetting requirements would be £100 for each uncancelled unit.

Law

Entry into force: 20 October, 2008

Individuals and legal entities

• It contemplates specific obligations for private individuals and legal entities in relation to respect for human rights and the environment and obliges them to put the general interest before the individual interest.
• Each person involved in the processes of production, distribution, marketing and use of goods or services assumes direct responsibility for preventing any environmental impact, mitigate and repair any damage, and to maintain a permanent environmental control system.
• The regulations provide for a strict liability regime for environmental damage that is not subject to statute of limitations.

Law

Entry into force 10 August 2014

Individuals and legal entities

• Penalties are established for individuals and legal entities for committing crimes against the environment (e.g., related to the invasion of protected areas, forest fires, environmental pollution).
• In cases of crimes against the environment and nature, legal entities could be found liable and subject to different sanctions including business dissolution (final closure) and fines. Also, those declared responsible are obliged to implement necessary measures to repair the environment comprehensively.

Law

Entry into force: 12 April 2017

Individuals and legal entities

The law refers mainly to the right to live in a healthy environment and the rights of nature. To this end:

• it includes several environmental principles (e.g. sustainable development, cooperation, participation, non-regression, in dubio pro natura, prevention, and polluter pays),
• it develops a strict liability regime for environmental damage. Liability for environmental damage is imposed on the agent, regardless of the degree of intent with which he may have acted. The burden of proof regarding the non-existence of environmental damage falls on the operator of the activity.
• it creates the instruments for maintaining a permanent environmental control system. The law adjusts the strictness of the licensing and control regimen depending on the impact that the activity may have on the environment; and,
• in general, regulates the State's activities and powers to prevent and control environmental impacts and damages. 

Numerous administrative offenses and sanctions are contemplated.

Law

Entry into force: 10 August 2014

Modified on 17 February 2021 (Official Registry No. 392)

Individuals who hold senior administrative positions in private companies, private companies and, in some cases, third parties (external to the company).

Penalties are established for private companies that commit acts of corruption in the private sector in order to benefit themselves or third parties in the context of their commercial activities. In addition, the company's senior administrative persons  and any person external to the company (who offers or grants any type of undue gift) could also be liable for this type of crime.

Law

Entry into force: 10 July 2020

Individuals and legal entities that are suppliers of goods and services

• This law regulates the relations between consumers and suppliers. Ecuador's products' liability law does not allow to limit the supplier's liability.
• Patents, authorizations, licenses or other documents or permits granted by the Government to certain suppliers for the purpose of research, development or commercialization of goods or the provision of services that may be dangerous or harmful to the health of the consumer, shall not represent in any case an exemption from liability for damages actually caused to said consumers, damages that under the provisions of this or other statutes, will be borne by the suppliers and all those who have participated in the production chain, distribution and marketing of the aforementioned goods.
• Producers, manufacturers, importers, distributors, merchants and every entity who branded the product or the service, shall be jointly and severally liable for civil damages resulted for defective goods or defective services provided. Are also liable those who participated or influence in such damages.
• Numerous offenses and sanctions are contemplated for the violation of consumers rights.

Law

Entry into force: 26 May 2021

Individuals and legal entities that handle personal data

This law regulates, foresees and develops principles, rights, obligations and protection mechanisms with the purpose of guaranteeing the right to the protection of personal data, which includes access to and decision on information and personal information. Establishes regulatory control procedures and sanctions that will come into force in May 2023.

Law

Entry into force: 5 November 1999

Last modified: 10 December 2020

All commercial entities

• This statute regulates the main corporate obligations of commercial companies in Ecuador.
• In February 2020, the category of "Company of collective benefit or interest" was included for those companies that want to generate a positive material impact in the areas of governance, working capital, community, customers and the environment.
• The law allows companies in exceptional circumstances to carry out activities outside their corporate purpose, in the case of research activities and those considered as reasonable contributions of a civic or social nature.

Law

Entry into force: 16 December 16 2005

Last modified: 4 November 2021

Individuals and legal entities with Ecuadorian employees

This law regulates, in general, all aspects of the relationship between employer and employee. Based on different criteria, it creates several burdens for employers, such as: the implementation of internal regulations related to occupational hygiene and safety, the creation of daycare centers for the children of workers, the hiring of social workers and occupational physicians.

Law

Entry into force: 2 June 2012

Individuals and legal entities with public funding or access to public resources

• Under this statute the Office of the National Comptroller exercises its powers through control and audit procedures (financial, management, public works, environmental, among others). The control entity can determine civil responsibilities of individuals and private entities, who are obligated to collaborate with the procedures and to hand all information and documentation that is required.  For example, in the context of an environmental audit, the civil liability of a public servant and a legal entity could be determined jointly.
• Also, the control authority (CGE) could issue reports with indications of criminal liability against legal entities for acts of corruption, with the purpose that such acts be investigated by the attorney general's office.