On 2 October 2018, the European Parliaments’ Committee on Economic and Monetary Affairs (ECON) published a draft report (the Report) on the European Commission’s proposal for Regulation of the European Parliament and of the Council amending Regulation (EU) 2016/1011 on low carbon benchmarks and positive carbon impact benchmarks, published on 24 May 2018 (see our blog here).

The rapporteur for the Report, Neena Gill MEP, is generally welcoming of the proposals put forward by the Commission as a first step towards introducing minimum standards for harmonising the methodology applicable to sustainable benchmarks. However, the Report expresses the need for the European Parliament to show a higher degree of ambition in line with the Parliament’s own-initiative report on sustainable finance. The following amendments are proposed to the Commission’s proposal:

  • by 2022, benchmark providers should have to ensure that all the benchmarks provided and published are aligned with the Paris Agreement commitments as implemented in EU legislation;
  • benchmark providers should describe precisely in a standardised way in all the benchmark statements what the climate impact is of the benchmarks used and how these are to be aligned with the Paris Agreement commitments;
  • to ensure future consistency and legal certainty, it is imperative that as and when the EU taxonomy regulation comes into force, there is coherence between both texts;
  • the Commission should investigate whether the benchmark sector is sufficiently competitive, and if appropriate, should adopt measures to boost the competitiveness of the sector should be implemented into the Commission’s proposal; and
  • the inclusion of a review clause to analyse the impact of this new regulation in terms of making the financial benchmark sector aligned with the Paris agreement commitments as well as with the requirements set in the Regulation of the European Parliament and the European Council on the Governance of the Energy Union.