On 15 January 2021, the Joint Committee of the European Supervisory Authorities (ESAs) published a letter it had sent to the European Commission concerning priority issues relating to the draft regulatory technical standards (RTS) under Regulation 2019/2088 on sustainability-related disclosures in the financial services sector (SFDR). The letter reports that areas of uncertainty have been … Continue Reading
The European Insurance and Occupational Pensions Authority (EIOPA) has published a sensitivity analysis of climate-related transition risks in the investment portfolios of European insurers. The report considers the current holdings by European insurers of corporate bonds and equity that relate to key climate-policy related sectors such as fossil fuel extraction (i.e. coal mining), carbon‐intensive industries, … Continue Reading
The European Insurance and Occupational Pensions Authority (EIOPA) has published a discussion paper on non-life underwriting and pricing in light of climate change. The discussion paper is a follow-up to the EIOPA opinion on sustainability within Solvency II (published in September 2019) in which EIOPA noted that it was common for non-life business not to … Continue Reading
On 15 December 2020, the Network for Greening the Financial System (NGFS) announced the following new members: US Federal Reserve System, Central Bank of Paraguay, Financial Regulatory Authority of Egypt, Financial Services Authority of Indonesia, Central Bank of Iceland, Polish Financial Supervision Authority, Central Bank of Uruguay and the European Securities and Markets Authority. The … Continue Reading
The United Nations Environment Programme Finance Initiative (UNEP FI) is a partnership between UNEP and the global financial sector to mobilize private sector finance for sustainable development. The Principles for Responsible Banking (PRB) are a unique framework for ensuring that signatory banks’ strategy and practice align with the vision society has set out for its … Continue Reading
On Thursday, 3 December 2020, the long-anticipated delegated acts on the environmental, social and governance (ESG) disclosure requirements for benchmark administrators authorised or registered under European Benchmark Regulation (BMR) were published in the EU Official Journal (OJ). In addition to the delegated acts on the ESG disclosure requirements, a delegated act on the EU Climate … Continue Reading
On 27 November 2020, the European Central Bank (ECB) published its final and amended guide on climate-related and environmental risks following a public consultation. The guide outlines the ECB’s understanding of the safe and prudent management of climate-related and environmental risks under the current prudential framework. It describes how the ECB expects institutions to consider … Continue Reading
On 22 November 2020, the European Commission issued a consultation on a draft delegated act under the Taxonomy Regulation. The Taxonomy Regulation establishes the framework for the EU taxonomy by setting out four conditions that an economic activity must meet in order to qualify as environmentally sustainable: It contributes substantially to one or more of … Continue Reading
On 23 November 2020, the Financial Stability Board (FSB) published a report that discusses the potential implications of climate change for financial stability. It investigates channels through which climate-related risks might impact the financial system. The report: Sets out the ways in which physical and transition risks from climate change can affect financial stability, as … Continue Reading
On 26 October 2020, the European Commission (the Commission) launched a public consultation[1] on sustainable corporate governance (the Consultation), soliciting responses from stakeholders on a possible EU sustainable corporate governance initiative with the aim of ensuring “that environmental and social interests are embedded in business strategies”. The Consultation will, according to the Commission, complement the … Continue Reading
On 5 November 2020, the European Securities and Markets Authority (ESMA) issued a consultation paper containing in draft form its advice to the European Commission (Commission) on Article 8 of the Taxonomy Regulation. Article 8 of the Taxonomy Regulation obliges undertakings covered by the Non-Financial Reporting Directive to publish information on how and to what … Continue Reading
On 3 November 2020, the European Banking Authority (EBA) issued a discussion paper on the management and supervision of environmental, social and governance (ESG) risks for credit institutions and investment firms. In the discussion paper ESG factors and ESG risks are identified and explained, giving particular consideration to risks stemming from environmental factors and especially … Continue Reading
On 30 October 2020, the European Commission published a letter from it to the chairs of the European Supervisory Authorities. The letter was with regard to the application of Regulation (EU) 2019/2088 on the sustainability related disclosures in the financial services sector and related technical standards. Key points in the letter include: The co-legislators agreed … Continue Reading
As the regulatory framework concerning environmental, social and governance (ESG) issues continues to develop, new rules will govern how impact investing is undertaken. Although the core focus of the ESG agenda has been on environmental sustainability, social matters have also been addressed and are likely to grow in importance in the coming years, particularly in … Continue Reading
On 29 October 2020, the Financial Stability Board’s (FSB) task force on climate-related financial disclosures (TCFD) published its 2020 status report on TCFD-aligned disclosures by firms. The FSB established the TCFD in 2015 and tasked it with developing a set of voluntary, consistent disclosure recommendations for use by companies in providing information to investors, lenders … Continue Reading
On 14 October 2020, the Bank for International Settlements published a speech by Kevin Stiroh (Co-Chair of the Task Force on Climate-related Financial Risks of the Basel Committee on Banking Supervision and Executive Vice President of the Federal Reserve Bank of New York) on the Basel Committee’s initiatives on climate-related financial risks. In his speech … Continue Reading
The European Insurance and Occupational Pensions Authority (EIOPA) has published for consultation a draft Opinion on the supervision of the use of climate-change risk scenarios in the ORSA. The ORSA is an internal risk management assessment of all the various risks that might impact an insurer’s balance sheet and is a requirement under Solvency II. … Continue Reading
On 21 September 2020, the European Supervisory Authorities (ESAs) published a survey seeking public feedback on presentational aspects of product templates, pursuant to Article 8(3), Article 9(5) and Article 11(4) of the Regulation on sustainability‐related disclosures in the financial services (SFDR). In particular, the ESAs are inviting stakeholders to comment on the layout of the … Continue Reading
On 17 September 2020, the European Banking Authority (EBA) published an online survey to receive input from credit institutions on their practices and views in the area of disclosure of information on environmental, social and governance (ESG) risks. The survey, which is addressed to large credit institutions that will be required to disclose prudential information … Continue Reading
The new European Disclosure Regulation provides the central schedule of obligations for ESG-related disclosures in the EU financial services sector. Many of the disclosure requirements start to apply from 10 March 2021 and therefore all financial market participants and financial advisors need to start considering the content of the requirements in order to address the … Continue Reading
On 10 September 2020, the Central Banks and Supervisors’ Network for Greening the Financial System (NGFS) issued the following publications: The Overview of Environmental Risk Analysis by Financial Institutions. This report provides wide-ranging examples of how environmental risks translate into financial risks, and an in-depth review of the tools and methodologies for environmental risk analysis … Continue Reading
On 3 September 2020, the Network for Greening the Financial System (NGFS) announced its 2020 – 2022 work program that will include continuing its work on climate scenario analysis and scaling up green finance. The NGFS will also create two new work streams focussing on addressing data gaps and research. The NGFS, launched at the … Continue Reading
We have been working with a number of institutions, helping them to navigate the complexities of requirements around sustainable finance and managing the financial risks posed by climate change. One of the areas where this has been most pronounced, is in relation to branches and subsidiaries of third-country banks, who are required to both consider … Continue Reading
On 28 July 2020, the European Commission published, for consultation, a roadmap on a Delegated Regulation on taxonomy-related disclosures by undertakings reporting non-financial information supplementing the Taxonomy Regulation. The Delegated Regulation will specify the requirements for entities subject to the Non-Financial Reporting Directive (NFRD) (i.e., large listed undertakings, large banks and large insurance undertakings with … Continue Reading
