On 27 April, the Technical Expert Group (TEG) on Sustainable Finance issued a statement on the importance of sustainable finance for recovery from the COVID-19 pandemic. The TEG believes that EU taxonomy, EU Green Bond Standard, and Paris-Aligned and Climate Transition Benchmarks are the right tools to use for the recovery policies. Read more
On 23 April, the three European Supervisory Authorities (ESAs) – EBA, EIOPA and ESMA – issued a consultation to seek input on proposed environmental, social and governance disclosure standards for financial markets participants, advisers and products. Under the Sustainability Disclosure Regulation in financial services, ESAs are mandated to develop Regulatory Standards on the content, methodology and presentation of ESG disclosures both at entity level and at product level. The consultation also contains proposals on the do no significant harm principle under the Taxonomy regulation. ESAs welcome responses by 1 September 2020. Read more
On 15 April, the Council of the EU adopted its position on the regulation laying the foundation for the taxonomy on sustainable finance. The Regulation has now to be adopted by the European Parliament. The taxonomy is expected to be in place by the end of this year in order to be applicable by the end of 2021. Read more
On 8 April, the European Commission launched a public consultation on a renewed sustainable finance strategy. The EC consults on a very broad range of topics to revise a sustainable finance strategy, also building on the 2018 Action Plan on Financing sustainable growth. The renewed sustainable finance strategy will predominantly focus on three areas:
A communication on a renewed strategy is expected by Q3 2020. The EC welcomes responses to the consultation by 15 July 2020. Read more
On 6 April, the European Commission opened feedback period on three draft delegated regulations:
On 2 April, ESMA published its annual report on enforcement and regulatory activities related to corporate reporting within the EEA.
European enforces increased their enforcement activities on non-financial information due to growing importance of ESG disclosures. This led to the examination of 937 non-financial statements (an increase compared to 819 examinations in 2018).
In 2020, ESMA will focus on double-materiality, environmental and climate-change disclosures and disclosures of key performance indicators. Read more
European Reporting Lab @EFRAG extended its deadline for to join the new European Lab Task Force on Reporting Non-Financial Risks and opportunities and linkage to the business model.
New date – 4 May 2020. Read more
The European Commission extended the deadline to provide comments to a public consultation on the revision of the Non-Financial Reporting Directive. New date – 11 June 2020. Read more
On 23 March, the European Commission started its work on Delegated Acts to establish technical screening criteria for the EU Taxonomy Regulation on sustainable finance, which lays the fundamentals for determining whether an economic activity is environmentally sustainable. The first Delegated Act focuses on climate change mitigation and adaptation (expected to be adopted in Q4 2020). A second Delegated Act will cover screening criteria for other four environmental objectives defined in the Taxonomy Regulation. A separate Delegated Act will complement the Regulation in relation to the requirements for large undertakings to publish information on how and to what extent their activities align with the EU taxonomy (mid-2021). Read more
On 9 March, the Technical Expert Group (TEG) on Sustainable Finance presented its final recommendations on the overarching design of the Taxonomy and guidance on how companies and financial institutions can make disclosures using the taxonomy. The TEG also prepared a technical annex containing:
The TEG also published a user guide to the European Green Bond standard. The European Commission will publish its communication on what form the final EU Green Bond standard should have after evaluation of feedback to a public consultation on a renewed sustainable finance strategy and an internal impact assessment.
The TEG will continue its work until September 2020.
On 11 March, the European Commission adopted a new Circular Economy Action Plan. The new Action Plan aims to make the EU economy fit for a green future, strengthen the competitiveness while protecting the environment and give new rights to consumers. The plan and the initiatives therein will be developed with the close involvement of the business and stakeholder community. Read More
On 5 March, the Council adopted the EU’s long-term low greenhouse gas emission development strategy on behalf of the EU and its Member States. This will now be submitted to the United Nations Framework Convention on Climate Change (UNFCCC) as required by the Paris Agreement. The EU’s strategy recalls the full commitment of the EU and its member states to the Paris Agreement and its long-term goals and achieving climate neutrality by 2050. Read More
On 4 March, the European Commission published a proposal for a regulation to enshrine in a legislation the EU’s political commitment to be climate neutral by 2050. This Regulation sets out a binding objective of climate neutrality in the EU by 2050 and provides a framework for achieving progress in pursuit of the global adaptation goal established in the Paris Agreement. That is a flagship initiative of the European Commission. The Climate Law also aims to enhance efforts on adaptation to climate change. Member States will also be required to develop and implement adaptation strategies to strengthen resilience and reduce vulnerability to the effects of climate change. Read More
On 23 April, GRI opened a public consultation to help determine the areas that the Global Sustainability Standards Board (GSSB) should focus for the next three years. The draft programme identifies priorities for reviewing and updating GRI standards, and consideration for new topic-specific standards, but also continue with sector specific program. Deadline for comments – 23 June 2020. Read more
On 14 April, the International Organization of Securities Commissions (IOSCO) published its report on Sustainable Finance and the Role of Securities Regulators and IOSCO. The report highlights three themes: multiple and diverse sustainability frameworks and standards, incl. sustainability-related disclosure, a lack of common definitions of sustainable activities, and greenwashing and other challenges to investor protection. Read moreThis curated content was brought to you by Vita Ramanauskaité, Accountancy Europe senior policy advisor since 2015. You can send her tips by email, follow her on Twitter and connect with her on LinkedIn.