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Topic: ESG

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UNEPFI – Guidelines for Climate Target Setting for Banks

On 21 April 2021, the United Nations Environment Programme Finance Initiative (UNEPFI) published guidelines for climate targets setting for banks. The guidelines outline key principles to underpin the setting of credible, robust, impactful and ambitious targets in line with achieving the objectives of the Paris Agreement. The guidelines outline four principles for target-setting: Banks shall … Continue Reading

The Recognised Auction Platforms (Amendment and Miscellaneous Provisions) Regulations 2021

On 21 April 2021, there was published on the legislation.gov.uk website The Recognised Auction Platforms (Amendment and Miscellaneous Provisions) Regulations 2021 together with an explanatory memorandum. The statutory instrument is part of the legislative effort to establish a United Kingdom (UK) Emissions Trading Scheme (ETS) and accompanying emission allowance market. The statutory instrument updates existing … Continue Reading

European Commission adopts legislative and regulatory package on sustainable finance

The European Commission (Commission) has published a number of legislative and regulatory initiatives in the context of its Sustainable Finance Action Plan. The aim of the Sustainable Finance Action Plan, which was first presented in 2018, is to channel more investment towards sustainable activities. The Commission has published the following initiatives: A Delegated Regulation under … Continue Reading

Basel Committee report on climate-related risk drivers and their transmission channels

On 14 April 2021, the Basel Committee on Banking Supervision (Basel Committee) published a report ‘Climate-related risk drivers and their transmission channels’. The report explores how climate-related financial risks can arise and impact both banks and the banking system. By synthesising existing literature, it illustrates how physical and transition climate risk drivers affect banks’ financial … Continue Reading

FSB chair updates G20 on COVID-19 support measures, and a roadmap to address climate-related financial risks

On 6 April 2021, the Financial Stability Board (FSB) published a letter from its Chair, Randal K. Quarles, to G20 Finance Ministers and Central Bank Governors ahead of their virtual meeting on 7 April. The FSB also delivered to the G20 a report on factors to be considered in extending, amending and ending COVID-19 support … Continue Reading

Building your sustainable finance proposition: an initial checklist

On 1 July 2020, the Prudential Regulation Authority (PRA) published a “Dear CEO letter”, which stated that firms (i.e. UK-incorporated entities) need to have fully embedded their approaches to managing climate related financial risks by the end of 2021.  The end of 2021 deadline represents more than two and a half years since the PRA … Continue Reading

Climate considerations now fully embedded across UK principal financial regulators

On 24 March 2021, HM Treasury sent a letter to the Prudential Regulation Committee (PRC) discharging its duty under the Bank of England Act 1998 to make, at least once in each Parliament, recommendations to the PRC about aspects of the economic policy of the government to which the PRC should have regard to when … Continue Reading

Consultation Paper on mandatory climate-related financial disclosures by publicly quoted companies, large private companies and LLPs

On 24 March 2021, the Department for Business, Energy & Industrial Strategy published a Consultation Paper on proposals to mandate climate-related financial disclosures by: Relevant Public Interest Entities – UK companies that are currently required to produce a non-financial information statement (i.e UK companies with more than 500 employees that have transferable securities admitted to … Continue Reading

ECB blog – Shining a light on climate risks: the ECB’s economy-wide climate stress test

On 18 March 2021, the European Central Bank (ECB) published a blog post by its Vice-President, Luis de Guindos. The blog post, Shining a light on climate risks: the ECB’s economy-wide climate stress test, describes the framework for the economy-wide climate stress test that the ECB is currently conducting. The stress test is the first … Continue Reading

ESAs consult on Taxonomy–related product disclosures

On 17 March 2021, the three European Supervisory Authorities (ESAs) issued a consultation paper on draft regulatory technical standards (RTS) regarding disclosures of financial products investing in economic activities that contribute to an environmental investment objective. The Taxonomy Regulation empowers the ESAs, by amending the Regulation on sustainability-related disclosures in the financial sector (SFDR), to … Continue Reading

UK Government launches online registry for modern slavery statements

On 11 March 2021, the Home Office launched an online registry for slavery and human trafficking (SHT) statements. This follows the Government’s response in September 2020 to a 2019 public consultation on potential options for strengthening section 54 of the Modern Slavery Act 2015 (the MSA), which requires certain commercial organisations to publish an SHT statement … Continue Reading

CP21/6: Regulating bidding for Emissions Allowances under the UK Emissions Trading Scheme

On 8 March 2021, the FCA published Consultation Paper 21/6: Regulating bidding for Emissions Allowances under the UK Emissions Trading Scheme (CP21/6). In December 2020, the government announced that it was creating a UK emissions trading scheme (UK ETS) that would replace the UK’s participation in the EU emissions trading scheme (EU ETS) from 1 … Continue Reading

EBA advises the Commission on KPIs for transparency on institutions’ environmentally sustainable activities, including a green asset ratio

On 1 March 2021, the European Banking Authority published an opinion in response to the European Commission’s call for advice on key performance indicators (KPIs) and related methodology for the disclosure by credit institutions and by investment firms of information on how and to what extent their activities qualify as environmentally sustainable in accordance with … Continue Reading

EBA launches public consultation on draft technical standards on Pillar 3 disclosures of ESG risks

On 1 March 2021, the European Banking Authority (EBA) issued a consultation paper on draft implementing technical standards (ITS) on Pillar 3 disclosures on environmental, social and governance (ESG) risks. The draft ITS put forward comparable disclosures that show how climate change may exacerbate other risks within institutions’ balance sheets, how institutions are mitigating those … Continue Reading

ESMA proposes rules for Taxonomy-alignment of non-financial undertakings and asset managers

On 1 March 2021, the European Securities and Markets Authority (ESMA) published its final report on advice under Article 8 of the Taxonomy Regulation, which covers the information to be provided by non-financial undertakings and asset managers to comply with their disclosure obligations under the Non-Financial Reporting Directive (NFRD). According to Article 8(1) of the … Continue Reading

ESAs issue recommendations on the application of the Regulation on sustainability-related disclosures

On 25 February 2021, the European Supervisory Authorities (ESAs) published a joint supervisory statement designed to mitigate the risk of divergent application of the Regulation on sustainability related disclosures in the financial sector (SFDR) from 10 March 2021 to the application date of the regulatory technical standards (RTS) on the content, methodologies and presentation of … Continue Reading

IOSCO sees an urgent need for globally consistent sustainability disclosure standards and announces its priorities and vision for a Sustainability Standards Board

On 24 February 2021, the International Organization of Securities Commissions (IOSCO) issued a press release following a board meeting in which it discussed the progress made over the past year by its Sustainable Finance Task Force (STF). In the statement the ISOCO board identifies three priority areas for improvement in sustainability-related disclosures by companies and … Continue Reading

FSB Chair’s letter to G20 Finance Ministers and Central Bank Governors: February 2021

On 25 February 2021, the Financial Stability Board (FSB) published a letter from its chair to G20 Finance Ministers and Central Bank Governors. The letter notes the unprecedented challenges faced by the FSB due to the COVID-19 pandemic and the imposition of containment measures across the globe. The letter also discusses the key priorities in … Continue Reading

Further draft statutory instruments for the UK Emissions Trading Scheme

On 12 February 2021, there was published on the legislation.gov.uk website a draft of The Recognised Auction Platforms (Amendment and Miscellaneous Provisions) Regulations 2021. The draft statutory instrument is part of the legislative effort to establish a UK Emissions Trading Scheme (ETS) and accompanying emissions allowances market. The UK ETS was established by the Greenhouse … Continue Reading

Commission summary report of stakeholder consultation on the Renewed Sustainable Finance Strategy

On 10 February 2021, the European Commission (Commission) published a summary report of the stakeholder consultation on the Renewed Sustainable Finance Strategy. On 11 December 2019, the Commission adopted its Communication on a European Green Deal (EGD), which significantly increases the EU’s climate action and environmental policy ambitions. However, the financial system as a whole … Continue Reading

ESG for asset managers: 10 things you need to know

We have published a new online briefing note – ESG for asset managers: 10 things you need to know. Our asset management regulation hub located on the Norton Rose Fulbright Institute contains a dedicated sustainable finance page setting out numerous resources to help financial institutions and investors who are facing a growing requirement to assess, … Continue Reading

ESAs publish final report and draft RTS on disclosures under SFDR

On 4 February 2021, the European Supervisory Authorities published a final report containing draft regulatory technical standards (RTS) on the content, methodologies and presentation of sustainability-related disclosures under the empowerments set out in Articles 2a, 4(6) and (7), 8(3), 9(5) and 10(2) and 11(4) of the Sustainable Finance Disclosure Regulation (SFDR). The draft RTS relate … Continue Reading

Joint Statement on the International Platform on Sustainable Finance

On 3 February 2021, HM Treasury issued guidance concerning a joint statement on the International Platform on Sustainable Finance (IPSF). The IPSF was launched on 18 October 2019. Its members are public authorities in charge of developing environmentally sustainable finance policies in Argentina, Canada, Chile, China, Hong Kong Special Administrative Region of the People’s Republic … Continue Reading

Letter to Mairead McGuinness from the Chair on ESG ratings and assessment tools

On 29 January 2021, the European Securities and Markets Authority (ESMA) published a letter it had sent to the European Commission setting out its views on the main challenges in the area of environmental, social and governance (ESG) ratings and assessment tools. The letter builds on ESMA’s response to the Commission consultation on the renewed … Continue Reading
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