European Commission unveils policy priorities for 2022
The EC published its Work Programme for 2022, reiterating its commitment to continue with the implementation of the European Green Deal. Amongst other points, the EC underlined that green bonds play a key role in driving the decarbonisation of the European economy. Read more
ESMA’s priorities for 2022
The European Securities and Markets Authority (ESMA) published its 2022 work programme. ESMA lists sustainable finance as a cross-cutting theme to help achieve its objectives of enhancing investors’ protection and promoting stable and orderly financial markets. For that purpose, ESMA will develop rules on environmental, social, governance (ESG) disclosures and risk identification methodology for ESG, contribute to the work on sustainability reporting, and cooperate with national authorities to prevent the risk of greenwashing. ESMA will continue ensuring that ESG factors are considered in the EU single rulebook. Read more
ESMA’s enforcement priorities for 2021 annual financial reports
ESMA’s enforcement priorities for 2021 annual financial report include:
- climate-related matters, both as a priority related to IFRS financial statements and as a priority related to non-financial statements
- taxonomy-related disclosures, as a priority related to non-financial statements.
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ECA concludes that more EU action is needed to direct capital to sustainable investments
The European Court of Auditors (ECA) published a report on Sustainable Finance. The report signals that more consistent EU action is needed for capital to flow. ECA recommends that the EC:
- completes the Action Plan on sustainable finance (AP SF) measures and clarifies compliance and audit arrangements
- better contributes to sustainable finance by pricing greenhouse gas emissions
- reports on climate and environment related results of InvestEU
- increases efforts to generate a sustainable project pipeline
- applies the “do no significant harm principle” and the EU Taxonomy criteria consistently across the EU budget
- monitors and reports on the results of the AP SF and any future strategies
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European Parliament’s Greens share its view over Fitfor55 package
The European Parliament’s (EP) political group of Greens sent an open letter urging the EC to consider the following proposals in the context of the Fitfor55 package:
- ensure a massive acceleration of capacity build-up of renewable energy in Europe
- end the fossil fuel era; make “the energy efficiency first” principle a reality
- ensure 100% emissions-free car reality by 2030
- get rid of unnecessary CO2 certificates in the ETS
- rapid phase out of free allowances in the ETS
- earlier taxation of aviation and maritime sectors to ensure a level-playing field
- change the production of food; eliminate waste of resources
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Council of the EU approves conclusions on climate finance
The Council of the European Union published its conclusions on climate finance ahead of the COP26 in Glasgow. The document reaffirmed the EU’s commitment for implementation of the Paris Agreement goals. In particular, the Council welcomed the progress made on the Taxonomy, sustainability-related disclosures, green bonds, and corporate sustainability reporting. International partners were also encouraged to join the International Platform on Sustainable Finance. Read more
EP’s inputs for COP26
During its plenary, the EP approved a motion for a resolution indicating the main input for the COP26 meeting in Glasgow. The MEPs are asking for climate neutral economies for all the G20 countries. Specifically, they ask for at least 100 billion dollars invested in climate finance for developing countries, and a five-year timeframe to accelerate the pace of climate action. In the motion, MEPs also underlined the importance of further development and promotion of climate and sustainability-related financial disclosures by financial institutions and companies. Read more
ECB climate stress test
The European Central Bank (ECB) made a climate stress test on four million companies and 1600 banks in the euro area. The results showed that:
- firms and banks benefit from adopting green policies early on to foster the transition to a net zero economy
- the impact of climate risk is concentrated in certain regions and sectors
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Objections to the Taxonomy Delegated Acts
In its plenary, the EP voted on two motions for a resolution (ID Group and ECR Group) objecting the Taxonomy Climate Delegated Act (DA). The DA specifies the criteria for economic activities to qualify as contributing substantially to climate change mitigation and adaption, and whether they cause significant harm to other environmental objectives. Around the same time, the Economic and Monetary Affairs (ECON) and the Environment, Public Health and Food Safety (ENVI) committees held a joint vote on a motion for a resolution objecting the EU Taxonomy Disclosure DA supplementing Article 8 on disclosure obligations. The majority of MEPs in the plenary and the committees voted against the objections.
NGOs continue advocating over Taxonomy
Several NGOs signed an open letter to the EC asking for the exclusion of fossil gas from the Taxonomy. The NGOs fear that including those in the Taxonomy will undermine the credibility of the tool and it will represent a step backwards for the sustainable transition of EU economy. Read more
EC’s first green bond
The EC issued 12 billion euros of green bonds within the framework of NextGen EU. According to the EC, this is expected to fund the sustainable economic recovery from COVID-19 through green projects and investments. The NextGen EU green bond programme foresees to issue 250 billion euros in green bonds by the end of 2026. Read more
EFRAG to establish Expert Working Groups on standard setting
Eleven Expert Working Groups (EWG) composed of sustainability experts are expected to provide input for the development of draft European sustainability reporting standards. The decision on the EWGs composition is expected by the end of October 2021. Read more
Trade Unions convey to the EC that further delaying the Sustainable Corporate Governance initiative is unacceptable
Representatives of the European Trade Union Confederation (ETUC) and several other major trade union organisations (EPSU, EFFAT, IndustriAll Europe and UNI Europa) met with the cabinet of Commissioner Thierry Breton on 30 September to express their concerns about the delay in EU action on Sustainable Corporate Governance.
They are particularly worried about the postponement of the legislative proposal that was expected to be presented in June. They made clear that further delaying the initiative is unacceptable. They called on the EC to introduce mandatory due diligence, accompanied by dissuasive sanctions. Read more
EC Sustainable Corporate Governance proposals expected in December
After a considerable delay, the EC is now expected to launch its proposals on 8 December. The proposals will look into: i) the rules for supply chain due diligence, and ii) directors’ sustainability duties. In an effort to strengthen the momentum for reforms, Justice Commissioner Didier Reynders stated in a public event that the proposals are expected to be as ambitious as the EC intended initially.
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