ECON considers amendments to the CSRD
The European Parliament (EP) Economic and Monetary Affairs (ECON) committee considered the tabled amendments (AMs 68 – 237 & AMs 238 – 523) to its draft opinion on the Corporate Sustainability Reporting Directive (CSRD).
MEP Jessica Polfjärd (EPP/Sweden) – rapporteur for opinion – noted that there are several matters where views differ, e.g., scoping in SMEs of high-risk sectors. Some MEPs noted that it is important to consider the international sustainability standards adopted by the International Accounting Standards Board (IASB). Others would like to see a European sustainability reporting board (i.e., body responsible for the EU standard setting) that would be a public body.
ECON vote is foreseen on 28 February. Leading Legal Affairs committee (JURI) is expected to vote in March.
ECON amendments on the green bonds proposal
The EP’s ECON committee tabled amendments (AMs 214-510) to the draft report by the lead MEP Paul Tang (S&D/Netherlands). Among other changes, the MEP proposes that external reviewers shall not provide services other than activities concerning the EU green bonds. Consideration of AMs is scheduled for 28 February. The committee is expected to vote on the file on 31 March.
ESMA on possible challenges on EU green bonds
European Securities and Markets Authority (ESMA) Chair Venera Ross sent a letter to the EP and the European Commission (EC) on the proposal for EU green bonds regulation. To recall, ESMA is expected to undertake a supervisory role for external reviewers. In this letter, Chair shared ESMA’s key observations on possible challenges concerning their expected mandate, in particular:
- timeline for measures’ implementation – there are provisions (in level 2) for ESMA to deliver prior to the start of its supervisory mandate and within 12 months after entry into force
- functioning of the third country regimes
- resourcing and funding model provided for ESMA’s supervision
Guidance on the Taxonomy Disclosures Delegated Act implementation FAQs on Article 8
The EC issued a second FAQs batch to clarify the provisions in the Disclosures Delegated Act, aiming to help with its implementation. The FAQs are meant to assist large banks, investors, insurers and non-financial companies to report EU Taxonomy eligibility disclosures.
EU Taxonomy Complementary Delegated Act
The EC approved in principle a Complementary Climate Delegated Act (DA) that covers certain gas and nuclear activities. The DA introduces:
- additional economic activities from the energy sector into the EU Taxonomy
- specific disclosure requirements for businesses related to their activities in the gas and nuclear energy sectors
The College of Commissioners reached a political agreement, and it will be formally adopted once it is translated to all EU languages. The DA will be subject to co-legislators’ scrutiny.
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EU Platform on Sustainable finance concerns over the Complementary Delegated Act
EU Platform on Sustainable finance provides feedback on the Complementary Delegated Act on fossil gas and nuclear energy. The report provides feedback on the technical screening focusing on environmental performance and usability aspects.
The Platform also:
- identified limitations and recommendations for companies and financial products in case the DA is adopted
- noted that the draft DA activities are not in line with the Taxonomy Regulation and most members see a serious risk of undermining the sustainable Taxonomy framework
- expressed its concerns about the draft criteria and how they would work in practice while many of its members are alarmed about the potential environmental impacts
EFRAG PTF-ESRS publishes Batch 1 of Working Papers on ESRS
This Batch 1 includes the preparatory documents for five standards and two reporting guidelines. The working papers, which are not open to public consultation, include:
- four cross-cutting standards:
- strategy and business model
- sustainability governance and organisation
- sustainability material impacts, risks and opportunities
- definitions for policies, targets, action plans and resources
- one topical standard:
- two conceptual guidelines:
- double materiality
- characteristics of information quality
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13 new member organisations join EFRAG’s Sustainability Reporting Pillar
The European Financial Reporting Advisory Group (EFRAG) welcomed thirteen new member organisations as part of its sustainability pillar in its organisational structure.
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EFRAG calls for candidates for its Sustainability Reporting Board, Chair and Members of its Sustainability Reporting TEG
EFRAG launched a call for candidates for the Sustainability Reporting Board, which will be responsible for developing European Sustainability Reporting Standards (ESRS). Only EFRAG Member Organisations can nominate candidates, and the deadline for doing so is January 10.
In parallel, EFRAG Administrative Board launched two calls for candidates, one for the Chair and the other for the Members of the EFRAG Sustainability Reporting Technical Expert Group (TEG). Applications must be submitted by 28 February.
Sustainable Corporate Governance – latest developments
The EC’s proposal on Sustainable Corporate Governance is now scheduled for 23 February. According to our information, its focus is likely to be environmental and human rights due diligence, with lower level of ambition regarding directors’ duties.
In parallel, French MEP Pascal Canfin and a group of CEOs and business leaders urge the EC, in a joint letter, to link the executive pay to sustainability objectives. In a separate move, over 100 companies, investors and business associations have also called on the EU to swiftly adopt due diligence legislation. Furthermore, a group of MEPs have asked the EC to provide more clarity behind the decisions of the Regulatory Scrutiny Board.
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