New EU Commission delayed
Over the last couple of weeks, the European Parliament held a series of hearings with Commissioner nominees, before making a final decision on the new Commission, led by Ursula von der Leyen. But as MEPs rejected three candidate-commissioners, the new EU Commission is expected to start work with a delay of one month, at least.
Sustainable finance remains the priority for Dombrovskis
At his hearing on 8 October, future Vice-President Valdis Dombrovskis (financial services) highlighted the importance of scaling up the investments to achieve climate-neutral economy. To that end, he will work on developing Sustainable Investment Plan. The EU must swiftly agree on a unified taxonomy, but also the EC needs to expand the taxonomy into other areas. Standards for green bonds and ecolabels will equally play an important role.
He also highlighted the need to strengthen the foundation of green finance by exploring ways to improve corporate disclosure on sustainability – the Non-Financial Reporting Directive will be revised.
His letter to MEPs on the priorities.
European Green Deal – climate-neutrality to be embedded in all EU policies
Future Vice-President Frans Timmermans was entrusted with the supervision of a European Green Deal. To achieve climate-neutrality by 2050, a European Green Deal will play an important role. But to meet the objectives, the EU needs to scale up public investment and direct private capital toward climate action, also incentivise behavioural change. Timmermans will present the new EU Climate Law within the first 100 days to ensure that climate-neutrality objective is embedded in all EU policies.
His letter elaborating on the priorities.
Council outlines EU position for COP25
On 4 October, the Council adopted conclusions on the EU preparations for COP25 taking place in December 2019. The Council expressed a deepening concern regarding the increasing impact of climate change and the importance of stepping up global climate action.
It is stressed that all parties need to contribute to making global finance flows consistent with a pathway towards low carbon emissions and in line with the Paris Agreement. Sustainable finance needs to be promoted in this context. Read more
Council agreed on its position on the taxonomy
On 25 September, the Council agreed its position regarding a unified classification system to identify what economic activity can be considered as environmentally sustainable. The Council did not exclude ‘nuclear’ projects from taxonomy, despite the demands of Germany, Austria and Luxembourg. The Parliament intends to push back against this during the trilogue negotiations – which are ready to start.
The taxonomy should be established by the end of 2021 for its full application by end of 2022.
ESMA is preparing for 2020
ESMA sets out its priorities for the upcoming year – sustainability is amongst key issues to be dealt with. Under sustainable finance, ESMA will develop the technical standards required by the new regulatory framework on the disclosure for sustainable investments. ESMA will also monitor and act upon the developments regarding the taxonomy. Also, ESMA will continue monitoring the developments in sustainability matters; and will continue its supervision and enforcement role in corporate reporting matters.
EIOPA issues its opinion on sustainability within Solvency II framework
Last year, the Commission requested EIOPA to provide its opinion on sustainability within Solvency II, in particular focusing on aspects relating to climate change mitigation. The opinion covers amongst others sustainable finance considerations. EIOPA’s opinion will feed back into the preparation of the Commission’s report on the Solvency II Directive.