EC delays the proposals on Sustainable Corporate Governance
According to the latest news, the EC proposal on Sustainable Corporate Governance, which was due to be launched in June, will now be delayed until autumn. The file now will also be shared between Justice Commissioner Didier Reynders and Internal Market Commissioner Thierry Breton.
Commissioner McGuinness invites EFRAG to start developing draft sustainability reporting standards
These standards should be built on the proposals of EFRAG’s project task force on EU non-financial reporting standards. This work is to be undertaken in parallel to the negotiations of the proposed CSRD, and to the establishment of the new governance structures for EFRAG as set out in the proposals by EFRAG’s President.
EFRAG is expected to deliver the first set of draft standards on 15 June 2022 only after:
- its governance reforms have been finalised and
- the co-legislators have reached an agreement on European Commission (EC)’s proposals on the CSRD
European Parliament (EP) plenary adopts the Just Transition Fund (JTF)
The JTF will help EU countries deal with the economic and social impact of the transition towards climate neutrality. It will focus on aspects like training and workers’ inclusion, funding to micro-enterprises, business incubators and universities, and investments in new sustainable technologies. Member States’ commitment to the climate goals by 2050 is a key condition to access the fund. As a next step, the JTF must be adopted by the Council.
Taxonomy’s Article 8 draft delegated act unveiled
The EC published the Taxonomy’s Article 8 draft delegated act. It will ensure transparency in the market and prevent greenwashing. The draft delegated act specifies the disclosure obligations under Article 8 of the Taxonomy Regulation (content of KPIs related to turnover, capital and operational expenditure, methodology and presentation of information).
Stakeholders can provide feedback on the draft delegated act until 2 June 2021.
Five NGOs leave EU Platform on Sustainable Finance after Taxonomy Climate delegated act publication
WWF, BEUC, ECOS, BirdLife, and Transport&Environment suspended their activities within the EU Platform on Sustainable Finance due to their concerns over the labelling of certain activities in the EC’s EU Taxonomy proposal presented on 21 April. In their view, the political interference has undermined the Taxonomy principles and led to an approach which is not based on scientific evidence. The main issue was the classification of the industrial logging and biomass energy as green investment.
Chair of the EU Platform on Sustainable Finance concerned over the Taxonomy Climate delegated act
Nathan Fabian, Chair of the EU Platform on Sustainable Finance, called for a review of the governance and transparency in the decision making of the EU Taxonomy criteria, following the publication of the EC Climate delegated act on 21 April. He confirmed the engagement of the EU Platform in keeping the science-based evidence at the core of the Taxonomy. It will ask for a review of the proposal if those would not be met. The EU Platform continues advising the EC on extension of the Taxonomy and criteria for further environmental objectives. Further recommendations are due shortly.
Business organisations express concern on the upcoming Sustainable Corporate Governance initiative
BETTER FINANCE, ecoDa, European Family Businesses, EuropeanIssuers, Federation of European Securities Exchanges, Invest Europe, and SMEUnited shared their concerns over the Sustainable Corporate Governance proposal in a joint letter to the EC. Signatories consider that:
- due diligence and corporate governance should be treated separately
- directors’ duties are already included in many corporate governance codes
- the initiative should not go beyond the form of recommendations, to not paralyse the board’s functioning and obstruct companies’ sustainable transition
Council and EP reached interinstitutional provisional agreement on the European Climate Law
The initiative aims to make the EU’s climate targets legally binding, notably climate neutrality by 2050 and the reduction of GHG emissions of 55% by 2030. The EP’s ENVI Committee approved the agreement reached in the Council at ambassadors’ level on 10 May. The proposal will be submitted to the plenary vote between 23 and 24 June. The Council will then need to approve the proposal at ministerial level.
CEPS final report on the NFRD
The Centre for European Policy Studies (CEPS) published a study as part of the ongoing monitoring of the implementation of Non-Financial Reporting Directive (NFRD). The EC’s DG FISMA has commissioned this report to CEPS. The report analysed the data of 17 million companies within the EU. Among the main findings:
- 2.000 companies (excluding subsidiaries) are within the scope of NFRD (EU27)
- 10.000 companies are obliged to prepare non-financial statements based on broader transposition of the Accounting Directive and NFRD into national legislation
- 9.000 public interest entities (PIEs) and large non-PIEs report without a legal requirement
- the average administrative yearly costs to provide non-financial statements under the NFRD is 82.000 €