EU Platform on Sustainable Finance delivers its advice on financing the transition
The Platform provides recommendations on how to strengthen the transition financing’s potential through the Taxonomy criteria. It underlines the importance of the EU Taxonomy to identify the investments that are much needed to reach the Green Deal goals, and its role as a tool for companies to plan and finance transition investments to reach the Green Deal and climate targets.
Amongst other recommendations, the Platform highlights the need to ensure that the forthcoming reporting and disclosure standards are coherent, pragmatic and enable all market participants, from corporates to SMEs, to access the green finance for the transition.
The European Commission (EC) will consider the advice when finalising the delegated acts and the renewed sustainable finance strategy.
EBA, EIOPA and ESMA consult on Taxonomy–related product disclosures
EBA, EIOPA and ESMA seek input on the draft Regulatory Technical Standards (RTS). The European Supervisory Authorities (ESAs) ask for input regarding disclosures of financial products investing in economic activities that contribute to an environmental investment objective, as defined by the Taxonomy Regulation.
The proposed draft RTS aim to:
- facilitate disclosures to end-investors regarding the investments of financial products in environmentally sustainable activities
- create a single rulebook for sustainability disclosures under the SFDR and the Taxonomy Regulation, with minimum overlapping or duplicative requirements between the two regulations
Stakeholders are invited to contribute to the consultation by 12 May.
Sustainable Finance Disclosure Regulation (SFDR) entered into force on 10 March
The Regulation introduces changes in behavioural patterns in the financial sector discouraging greenwashing and promoting responsible and sustainable investments. The SFDR sets common EU rules on how:
- financial product manufacturers and advisers should inform end-investors about sustainability risks
- the impact of investments on the environment and society should be disclosed
- financial products that are marketed as sustainability-related actually meet the requirements
European Parliament (EP) adopts Corporate due diligence and corporate accountability report
Lara Wolter’s (S&D, Netherlands) report on Corporate Due Diligence and Corporate Accountability was adopted by a large majority at the EP plenary on 10 March.
The text calls on the EU to oblige companies to identify and address human rights, health, environmental and good governance risks arising from their activities throughout their supply chain. The EP also calls for a civil liability mechanism and legal remedies for victims. The EP expects that the report will be taken into consideration in the legislative proposals to be delivered by the EC in June.
ESMA proposes rules for Taxonomy alignment of non-financial undertakings and asset managers
ESMA published its advice to the EC on Article 8 of the Taxonomy Regulation regarding how and to what extent companies’ activities are associated with economic activities that qualify as environmentally sustainable under the Taxonomy Regulation. The advice addresses:
- definitions and criteria to calculate turnover, OpEx and CapEx KPIs
- a methodology to report against KPIs and recommendations on presentation of KPIs, including reference to the economic activities, for both asset managers and non-financial undertakings
EBA and EIOPA issued advice for financial institutions and insurance and reinsurance undertakings respectively.
EU Climate Adaptation Strategy
The EC adopted a strategy on climate adaptation which sets out how the European Union can adapt to the unavoidable impacts of climate change. It will be implemented in coherence with other initiatives of the European Green Deal.
The EC will explore further actions for the provision of climate-relevant insurance products in the context of the Renewed Sustainable Finance Strategy:
- examine natural disaster insurance penetration in Member States
- strengthen dialogue between insurers, policymakers and stakeholders
- identify and promote best practices in financial instruments for risk management
- explore the use of financial instruments and innovative solutions to deal with climate risks
EBA, EIOPA and ESMA recommendations on the SFDR
ESAs published a joint supervisory statement on the effective and consistent application and national supervision of the SFDR. The recommendations aim to:
- grant effective and consistent application of the SFRD
- promote level playing field
- protect investors