EFRAG welcomes Climate standard prototype working paper
The EFRAG Project Task Force on European sustainability reporting standards (PTF-ESRS) made public the working paper ‘Climate standard prototype’, which will further develop to a draft standard. This working paper is made publicly available for transparency purposes and is not submitted to public consultation at this stage.
EC unveils renewed Sustainable Finance strategy
The European Commission (EC) adopted a Sustainable Finance Package. Specifically:
- the renewed sustainable finance strategy sets out six actions, focusing on expansion of the EU Taxonomy, SMEs and retails investors, enhancing the financial system’s resilience to sustainability risks, international sustainable finance initiatives and standards, etc
- the EU Green Bond Standard proposal introduces a voluntary standard for green bond issuance. The standard will provide issuers a tool to show that they are funding activities aligned with the Taxonomy. Investors will also receive clear information on their investments and their positive impacts on the environment, avoiding greenwashing
- the EU Taxonomy Delegated Act on Article 8 specifies the content, methodology and presentation of information that non-financial and financial companies will have to disclose. The delegated act is subject to the co-legislators’ scrutiny
EC accelerates issuance of NextGenerationEU green bonds
The EC intends to issue up to 250 billion euros green bonds starting October, as part of the NextGeneration EU recovery instrument. The fund will deliver 800 billion euros to support EU’s recovery from pandemic, 250 of them will be delivered in green bonds. For the green bond issuance, the EC adopted a Green Bond framework which is in line with the principles established by the International Capital Market Association.
Controversial report on ESG integration within the banking system
BlackRock published a study on the integration of ESG factors in the supervision of banks. The report states that, despite the efforts made by banks and supervisors, integration of ESG indicators within risk management and business strategies should be accelerated. The NGOs Change Finance and Reclaim Finance were critical towards this study. In their views, the involvement of BlackRock in coal, gas, and oil industry could slow down or derail the EC from achieving the objectives of the Paris Agreement.
EFRAG calls for sustainability reporting experts
The PTF-ESRS has kicked off their technical work to develop EU sustainability reporting standards. The PTF-ESRS is organised in clusters, which are currently scoping, researching, documenting and drafting the very first version of the standards. The PTF-ESRS aims to have pre-exposure draft version ready by mid-October.
To this end, EFRAG calls for experts to join Working Groups and provide input on the draft sustainability reporting standards being developed.
Technical screening criteria for Taxonomy under review
The EU Platform on Sustainable Finance called for feedback on the preliminary recommendations for the EU Taxonomy technical screening criteria by 24 September. The report presented a first set of priority economic activities and draft recommendations for associated substantial contribution and do no significant harm technical screening criteria. These are related to the remaining four environmental objectives: water, circular economy, pollution prevention, and biodiversity/ecosystems.
ECOFIN exchange of views on Sustainable Finance package
Economic and Finance Ministers (ECOFIN) held a public deliberation on the EC’s Sustainable Finance Package on 13 July. After the EC’s presentation, Member States shared their views on the proposals. Indicatively:
- Poland, Bulgaria, and Czechia pushed for the inclusion of nuclear energy and natural gas in the Taxonomy
- Czechia, Hungary, Romania and Slovakia asked for a flexible approach in the transition towards sustainability
- Bulgaria and Estonia asked to keep a proportional approach for SMEs regarding sustainable finance regulations
EU Platform on Sustainable Finance works on Social and extended Taxonomies
Over the summer, the EU Platform on Sustainable Finance presented a report on Social Taxonomy that aims to define activities substantially contributing to social objectives. Also, the Platform issued a report on Taxonomy extension options linked to environmental objectives. The report investigates ways to support the transition in the whole economy. It further clarifies activities that are significantly harmful to environmental sustainability and those activities that have no significant impact. This is to support the transition of significantly harmful activities to a ‘greener’ level.
EFRAG signs statements of cooperation with GRI and Shift
EFRAG will contribute to key technical projects of GRI and Shift and have them as observers in their respective technical groups to work towards international sustainability reporting convergence.
Five Member States are against the EC’s JRC opinion on nuclear energy
Five Member States – Austria, Denmark, Luxembourg, Spain, and Germany – signed a joint letter asking the EC to keep out nuclear energy from the Taxonomy. Those countries consider it as harmful and deeply criticised the JRC’s report on the topic. They stated that it failed to address the residual nuclear risk, the question related to nuclear waste, and, finally, they raised doubts on the expertise of the scientific committees who drafted the report itself.
EC Sustainable Corporate Governance initiative: MEPs demand ambition and expected EC discussions
Several MEPs sent a letter to the EC President von der Leyen and 13 Commissioners in view of the delayed EC’s legislative proposal on Sustainable Corporate Governance. They insisted on the inclusion of the European Parliament key demands laid out in its legislative own-initiative resolution. These pertain to the scope of the future Directive, extending the due diligence obligation to all risks along the entire value chain, proportionality and prioritisation, and liability.
President Von der Leyen received a second letter from the Presidents of EPP, S&D, Renew, GreensEFA and the Left urging to ensure the EC proposal takes the EP’s views into account.
The College of Commissioners indicatively plans to discuss Sustainable Corporate Governance initiative on 27 October 2021.
NGO recommendations on Sustainable Corporate Governance
Leading NGOs have published a briefing with key recommendations to help clarify directors’ responsibilities to oversee sustainability. NGOs urge to reflect their recommendations in the legislation that should apply to all companies and in particular those whose business activities are linked to significant sustainability risks and impacts.