EP Study on corporate social responsibility and its implementation into EU company law
A new study launched by the European Parliament (EP) examines to what extent EU’s legislation on Corporate Social Responsibility (CSR) have been implemented within selected Member States (France, Germany, Italy, the Netherlands, Poland and Spain). The study looks into whether CSR strategies are mandatory or voluntary and what enforcement mechanisms are foreseen. Due diligence requirements applicable to companies, including in their supply and subcontracting chain, are one of the focal points of the paper. This study will assist the EP Committee on legal affairs (JURI) in its work on comprehensively re-thinking CSR in the EU, by providing a number of recommendations to this end. Read more
ESMA consults on its draft advice on the EU Taxonomy related disclosures
ESMA seeks feedback on its draft advice to the Commission regarding reporting obligations under Art. 8 of the EU Taxonomy Regulation. As per Commission’s request, ESMA’s draft advice covers content, methodology and presentation of the key performance indicators that non-financial undertakings and asset managers are required to disclose under Article 8.
EBA and EIOPA were also invited to provide similar recommendations on the delegated act to be adopted within their respective remits. The three authorities are coordinating the opinions which will be delivered to the Commission by the end of February 2021. Read more
Commissioner McGuinness delivered a speech at Paris Climate Finance week
Commissioner McGuiness, responsible for Financial Affairs, during her speech noted the importance of sustainable finance in rebooting the European real economy. The Commissioner indicated that the renewed Sustainable Finance strategy is expected for early 2021. The strategy will deliver on three main areas: 1) strengthen the foundations for sustainable investment by creating an enabling ecosystem; 2) increase the opportunities for citizens, financial institutions and companies to have a positive impact on sustainability; 3) climate and environmental risks need to be managed and fully integrated into financial institutions and the system as whole. Commissioner also noted that the Commission will put forward a new initiative on sustainable corporate governance later in 2021. Read more
EBA consults on ESG risk management and supervision
EBA launched a consultation paper on Environmental, Social and Governance (ESG) risk management and supervision aiming to collect feedback for the preparation of its final report on the topic.
The authority remarked the need for incorporating ESG risks into institutions’ business strategies and proportionately including them into their internal governance arrangements. This could be done by setting ESG objectives, engaging with customers and considering the development of sustainable products.
EBA also proposed to improve the existing supervisory reviews with ESG factors and introduce a new area of analysis and evaluation of business models’ long-term resilience. Read more
European accounting enforcers to enhance transparency on COVID-19 impact
ESMA published its annual public statement on European Common Enforcement Priorities. The statement sets out the priorities that EEA corporate reporting enforcers will consider when examining the listed companies’ 2020 annual financial reports. The document also highlights the requirements to disclose non-financial information with regards to the impact of the Covid-19 on non-financial matters, social and employee issues, business model and value creation, risk related to climate change, and considerations on the application of the ESMA Guidelines on alternative performance measures in relation to Covid-19. Read more
Council reaches agreement on parts of the European Climate Law proposal
The Council reached agreement on a partial general approach on the proposed European climate law. The aim of the proposal is to set in law the objective of a climate-neutral EU by 2050, which was endorsed by the European Council in December 2019. The Council’s position is partial because it does not yet specify an updated 2030 greenhouse gas emission reduction target. This issue will be furtherly discussed in December’s meeting. Read more
Accountancy Europe joins as a partner the Sustainable, long-term investments & competitive European Industry Intergroup
In October, the European Parliament’s (EP) Intergroup on Sustainable, long-term investments & competitive European industry was officially launched. This Intergroup serves as a forum to exchange views between MEPs as well as with stakeholders. The Intergroup will play a key role in two interconnected areas: 1) the growing debate on sustainable finance, a greener MFF & EU budget, and the implementation of the Sustainable Europe Investment Plan in the context of the Green Deal 2) stimulate discussions on the conditions needed for the European industry to thrive and improve its competitiveness/leadership in the new green and digital economy. Read more
Commission seeks input on Sustainable Corporate Governance
The Commission launched a public consultation on Sustainable Corporate Governance on 26 October. The Commission indicated that this initiative is complementary to the review of the Non-Financial Reporting Directive (NFRD). Whilst the NFRD is based on incentives ‘to report’, the sustainable corporate governance initiative aims to introduce duties ‘to do’. Auditors and other assurance providers are particularly welcome to provide their views. The consultation will be open until 8 February 2021. Read more
JURI Committee discussed the initiative on Corporate Due Diligence and Corporate Sustainability
The European Parliament’s Committee on Legal Affairs (JURI) discussed the amendments tabled to two own-initiative draft reports – by MEP Lara Wolters (Socialist Dutch) and MEP Pascal Durand (Liberal French). Among the issues the MEPs debated were whether legislation should also cover non-EU companies, the inclusion of SMEs within the scope and whether due diligence should apply to the entire value chain.
The political groups are now working to reach agreement before the vote in the JURI Committee, scheduled for 16 November on the ‘Durand’ report and 2-3 December on the ‘Wolters’ report.
Commission’s Work Programme 2021: From strategy to delivery
The Commission adopted its Work Programme for 2021. The Commission foresees an effective delivery of actions concerning all the main political priorities. Above all: the importance of combining digital and green transition to recovery from the Covid-19 crisis, and to create a new sustainable and inclusive European economy. A legislative proposal for the establishment of an EU Green Bond Standard was pencilled in for Q2 2021. Read more