EC adopts the EU Taxonomy Climate Delegated Act
The EU Taxonomy Climate Delegated Act aims to support sustainable investment by specifying which economic activities contribute the most to the EU’s environmental objectives. The delegated act will set the first technical screening criteria to define which activities contribute positively to climate change adaptation and mitigation, based on the scientific advice by the Technical Expert Group on Sustainable Finance. The text will be scrutinised by the European Parliament (EP) and the Council in the next four months.
EU co-legislators reach a provisional political agreement on the European Climate Law
The EU Climate Law turns the EU Green Deal targets into legal obligations to reduce the greenhouse gas emissions 55% by 2050 and to reach climate neutrality. The deal introduces elements to strengthen the European climate action framework, for example, such as a process for setting a 2040 climate target and a commitment to negative emissions after 2050. The EC will have to prepare sector-specific roadmaps on reaching climate neutrality in the European economic system. The provisional political agreement is subject to approval by the Council and EP, before going through the formal steps of the adoption procedure.
Nathan Fabian, Chair of Sustainable Finance Platform, comments on the EU Taxonomy developments
Nathan Fabian stated in a letter to the EC that the EU institutions should resist to political pressure made by stakeholders and Member States. Instead, the EC should stick to science-based evidence to maintain the credibility and goals of the Taxonomy Regulation itself, i.e. mitigate the effects of climate change and reduce the level of emissions.
Read his statement on the announcement of the first delegated act.
ESMA reports on enforcement of corporate disclosures
ESMA published its Annual Report on Enforcement and Regulatory Activities related to corporate reporting in the EEA. The report provides an overview of ESMA’s and European accounting enforcers’ activities that examine compliance of financial and non-financial statements of European issuers. 132 enforcement actions resulted from the inspection of non-financial statements, and the presentation and disclosure of alternative performance measures in management reports.
Reactions on the EU Taxonomy developments
A group of stakeholders published an open letter calling on the EC to maintain the high ambition of its initial proposals in the Taxonomy to produce clean hydrogen on 31 March. WWF also wrote to the EC expressing their concerns over the forestry and bioenergy criteria in the climate mitigation taxonomy draft delegated act. Some experts of the Sustainable Finance Platform also raised concerns over the provisions on forestry, bioenergy and fossil gas in the draft climate Taxonomy Delegated Act. They believe that those are in breach of the Taxonomy Regulation and in clear contradiction to climate science.
MEPs expressed concerns over certain provisions in the EU Taxonomy
MEP Sven Giegold (Greens/EFA) reacted to the EU Taxonomy Climate Delegated Act saying that the draft does not go as far as recently feared. MEP previously expressed concerns over the labelling of certain activities in the draft delegated act of EU Taxonomy. Previously, MEPs Simona Bonafè (S&D/IT) and Paul Tang (S&D/NL) co-signed a letter to the EC expressing three main concerns over the then upcoming delegated act:
- classification of investment in certain gas-powered heat and power plants
- outdated criteria for bioenergy
- inclusion of nuclear energy
EFRAG meets with international sustainability reporting setters and other related organisations
EFRAG and the EC met with CDP, CDSB, GRI, IFRS Foundation, SASB & IIRC, TCFD, UN Global Compact, UN Guiding Principles Reporting Framework, WICI, to define the potential collaboration of the future EU standard setter and these organisations.
IIGCC letter to President von der Leyen and Commissioner McGuinness
In the letter, the Institutional Investors Group on Climate Change (IIGCC) recommend that the draft Delegated Regulation under the Taxonomy Regulation:
- upholds the level of climate ambition and screening criteria recommended by the Technical Expert Group on Sustainable Finance
- does not include in its scope natural gas without abatement, e.g. without carbon capture