United Kingdom

Topic: ESG

Subscribe to ESG RSS feed

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

The Greenhouse Gas Emissions Trading Scheme Auctioning (Amendment) Regulations 2021

On 11 May 2021, there was published on the legislation.gov.uk website The Greenhouse Gas Emissions Trading Scheme Auctioning (Amendment) Regulations 2021 together with an explanatory memorandum. The Regulations amend the Greenhouse Gas Emissions Trading Scheme Auctioning Regulations 2021 (the Auctioning Regulations). The Auctioning Regulations make provision for the auctioning of emissions allowances to emit 1 … Continue Reading

Commission launches call for public feedback on the environmental performance information that financial and non-financial undertakings should disclose

On 7 May 2021, the European Commission issued a call for public feedback on a draft Delegated Regulation specifying the disclosure obligations under Article 8 of the Taxonomy Regulation. The Commission has also published FAQs on the draft Delegated Regulation and how will it work in practice. Under Article 8(1) of the Taxonomy Regulation certain … Continue Reading

The Recognised Auction Platforms and Greenhouse Gas Emissions Trading Scheme Auctioning (Amendment) Regulations 2021

On 28 April 2021, there was published on the legislation.gov.uk website The Recognised Auction Platforms and Greenhouse Gas Emissions Trading Scheme Auctioning (Amendment) Regulations 2021. The statutory instrument comes into force on 19 May 2021. The statutory instrument amends the Recognised Auction Platforms Regulations 2011 (the RAP Regulations) and Greenhouse Gas Emissions Trading Scheme Auctioning … Continue Reading

New FCA webpages on climate change

On 23 April 2021, the FCA published the following new webpages: Climate change and sustainable finance. In the webpage the FCA explains what its sustainable finance strategy is and its international work in this area. It also provides information on the Task Force on Climate-related Financial Disclosures (TCFD), Climate Financial Risk Forum and Investor Stewardship. … Continue Reading

The Greenhouse Gas Emissions Trading Scheme Auctioning Regulations 2021

On 22 April 2021, there was published on the legislation.gov.uk website The Greenhouse Gas Emissions Trading Scheme Auctioning Regulations 2021 together with an explanatory memorandum. The statutory instrument makes provision for the auctioning of emissions allowances to emit 1 tonne of carbon dioxide equivalent under the UK Emissions Trading Scheme (UK ETS) and introduces mechanisms … Continue Reading

FMLC letter to HM Treasury on the International Platform on Sustainable Finance

On 21 April 2021, the Financial Markets Law Committee (FMLC) published its letter to HM Treasury regarding the UK joining the International Platform on Sustainable Finance. In the letter the FMLC draws attention to the risk of uncertainty due to divergence which may arise between sustainable finance standards adopted in the EU and the UK … Continue Reading

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
LexBlog