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Topic: ESG

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Commission confirms delay to the application of the SFDR RTS

On 23 July 2021, the European Commission published a letter (dated 8 July 2021) to the European Economic and Financial Affairs Council (ECOFIN) and the Council of the EU, confirming that the RTS application date, under the Sustainable Finance Disclosure Regulation ((EU) 2019/2088) (SFDR), has been delayed until 1 July 2022. This letter is the … Continue Reading

FCA Dear CEO letter – authorized ESG and sustainable investment funds: improving quality and clarity

On 19 July 2021, the FCA published a Dear CEO letter which it had sent to authorised fund managers setting out its expectations on the design, delivery and disclosure of environmental, social and governance (ESG) and sustainable investment funds. The FCA notes that it receives a high volume of applications for the authorisation of funds … Continue Reading

SFDR draft RTS further delayed – what does it mean for firms?

Earlier this year, the European Supervisory Authorities (ESAs) 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). At the time of … Continue Reading

Platform on Sustainable Finance’s draft reports on a social taxonomy and on an extended taxonomy to support economic transition

On 12 July 2021, the Platform on Sustainable Finance (a permanent expert group of the European Commission) issued the following documents: A draft report for a social taxonomy. A consultation report on Taxonomy extension options linked to environmental objectives. The two draft reports are important steps in the Platform’s main deliverables to advise the Commission … Continue Reading

FSB publishes three climate-related reports

On 7 July 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 9 – 10 July 2021 meeting. Among other things the letter stresses the need for coordinated action to address financial risks posed by climate change, noting … Continue Reading

European Commission publishes its Renewed Sustainable Finance Strategy

On 6 July 2021, the European Commission (the Commission) published its Renewed Sustainable Finance Strategy (RSFS). The RSFS follows the Commission’s 2018 Sustainable Finance Action Plan, which aimed to channel more investment towards environmentally sustainable activities. Under the 2018 Sustainable Finance Action Plan, the Commission presented two main legislative proposals establishing the building blocks for … Continue Reading

European Commission publishes legislative proposal on European green bonds

On 6 July 2021, the European Commission published a legislative proposal on European green bonds (the EuGB Regulation). The EuGB Regulation will lay the foundation for a common framework of rules regarding the use of the “European Green Bond” (EuGB) designation for bonds that pursue environmentally sustainable objectives as defined by the Taxonomy Regulation.[1] It … Continue Reading

IOSCO consults on sustainability-related regulatory and supervisory expectations in asset management

On 30 June 2021, the International Organization of Securities Commissions (IOSCO) issued a consultation report on recommendations for sustainability-related practices, policies, procedures and disclosure in asset management. The consultation report focuses on investor protection issues and proposes that securities regulators consider setting regulatory and supervisory expectations for asset managers regarding sustainability-related risks and opportunities. The … Continue Reading

IOSCO report on issuers’ sustainability-related disclosures

On 28 June 2021, the International Organization of Securities Commissions (IOSCO) issued a report on issuers’ sustainability-related disclosures. The report: Provides background and context to IOSCO’s work in the area of sustainability disclosures. Summarises the work that IOSCO has done to develop its vision for an International Sustainability Standards Board (ISSB) under the International Financial … Continue Reading

EBA report on management and supervision of ESG risks for credit institutions and investment firms

On 23 June 2021, the European Banking Authority (EBA) published a report on the management and supervision of environmental, social and governance (ESG) risks. The report has been prepared in accordance with Article 98(8) of the Capital Requirements Directive V (CRD V) and Article 35 of the Investment Firms Directive (IFD). These provisions mandate the … Continue Reading

FCA consultations on enhancing climate-related disclosures

On 22 June 2021, the FCA published the following: Consultation Paper 21/17: Enhancing climate-related disclosures by asset managers, life insurers, and FCA-regulated pension providers (CP21/17). Consultation Paper 21/18: Enhancing climate-related disclosures by standard listed companies and seeking views on ESG topics in capital markets (CP21/18). Background In November 2020, the Government published a Roadmap towards … Continue Reading

BoE’s climate-related financial disclosure 2020/21

On 17 June 2021, the Bank of England (BoE) issued its second annual climate disclosure report setting out its approach to managing risks from climate change across its operations. In particular the report covers the BoE’s climate change strategy, the governance structures and processes around its climate-related work, and the measurement and management of climate-related … Continue Reading

European Commission publishes EU Taxonomy Compass

On 16 June 2021, the European Commission published an EU Taxonomy Compass which provides a visual representation of the contents of the EU Taxonomy, starting with the Delegated Act on the climate objectives, as adopted on 4 June 2021. Going forward, the EU Taxonomy Compass will be updated to include future delegated acts specifying technical … Continue Reading

Independent expert group appointed to advise Government on standards for green investment

On 9 June 2021, the Government announced the appointment of a Green Technical Advisory Group (GTAG). The GTAG will provide independent, non-binding advice to the Government on developing and implementing a Green Taxonomy in the UK context. This includes advising on: Approach to developing a UK Green Taxonomy that is usable and practicable for financial … Continue Reading

Key elements of the 2021 Biennial Exploratory Scenario: Financial risks from climate change

On 8 June 2021, the Bank of England (BoE) published the Climate Biennial Exploratory Scenario (CBES) which explores the resilience of the largest UK banks and insurers (together participants) to the physical and transition risks associated with climate change The key features of the CBES are: Three scenarios of early, late and no action built … Continue Reading

EU Taxonomy Climate Delegated Act

On 4 June 2021, there was published on the European Commission’s website: Adoption of the EU Taxonomy Climate Delegated Act (not in force until it is published in the Official Journal). Impact assessment accompanying the EU Taxonomy Climate Delegated Act. Summary of the impact assessment accompanying the EU Taxonomy Climate Delegated Act. Opinion of the … Continue Reading

NGFS publishes the second vintage of climate scenarios for forward looking climate risks assessment

On 7 June 2021, the Network for Greening the Financial System (NGFS) announced the following new documents: A new set of climate scenarios. In this second vintage, the NGFS scenarios have been brought up to date, including by incorporating countries’ commitments to reach net-zero emissions. They have also been enriched with an expanded set of … Continue Reading

TCFD public consultation

On 7 June 2021, the Task Force on Climate-Related Financial Disclosures (TCFD) issued two documents for public comment: Proposed Guidance on Climate-related Metrics, Targets, and Transition Plans. When the TCFD issued its Final Recommendations in 2017, it was aware of the limitations of reporting certain metrics as well as the nascency of climate-related reporting at … Continue Reading

Tackling climate for real: progress and next steps – speech by Andrew Bailey

On 3 June 2021, the Bank of England (BoE) published a speech by its Governor, Andrew Bailey, entitled Tackling climate for real: progress and next steps. In his speech Mr Bailey addresses three main areas of the BoE’s work: improving the understanding of climate-related financial risks across the financial system and macro-economy, developing and embedding … Continue Reading

EBA publishes results of EU-wide pilot exercise on climate risk

On 21 May 2021, the European Banking Authority (EBA) published the findings of its first EU-wide pilot exercise on climate risk. As the EU taxonomy and climate risk stress test frameworks are still developing, the pilot exercise was designed as a learning exercise to investigate how existing and newly developed climate risk assessment and classification … Continue Reading

UNEPFI guidance on financial inclusion and financial health target setting

On 11 May 2021, the United Nations Environment Programme published guidance on financial inclusion and financial health target setting. The guidance supports signatory banks in their efforts to set targets for financial inclusion and financial health, in line with the requirements of the Principles for Responsible Banking. Using the guide, banks can understand how to … Continue Reading

UK Emissions Trading Scheme markets

On 10 May 2021, the Department for Business, Energy and Industrial Strategy (BEIS) published a new webpage explaining the supply of allowances in the UK Emissions Trading Scheme (UK ETS) in the early years of the scheme. The UK ETS went live on 1 January 2021, replacing the UK’s participation in the EU Emissions Trading … Continue Reading
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