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Topic: ESG

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Climate Financial Risk Forum publishes guide on climate-related financial risk management

On 29 June, the Climate Financial Risk Forum (CFRF) published its guide to climate-related financial risk management. The CFRF, which is co-chaired by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA), aims to build capacity and share best practice across financial regulators and industry to advance the sector’s approach to understanding and mitigating … Continue Reading

Taxonomy Regulation published in OJ

On 22 June 2020, there was published in the Official Journal of the EU (OJ) Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088. The Regulation enters into force following the twentieth day following … Continue Reading

Commission publishes draft delegated acts on the introduction of ESG considerations

On 8 June 2020, the European Commission published the long-awaited draft level 2 measures incorporating sustainability issues and considerations into the EU financial services regulatory framework, including the UCITS Directive, the Alternative Investment Fund Managers Directive (AIFMD), MiFID II, the Solvency II Directive, and the Insurance Distribution Directive (IDD). The draft delegated acts also aim … Continue Reading

ECB public consultation on its guide on climate-related and environmental risks

On 20 May 2020, the European Central Bank (ECB) published a draft guide for consultation that explains how it expects banks to safely and prudently manage climate-related and environmental risks and disclose such risks transparently under the current prudential framework. Whilst the ECB’s immediate attention is on the COVID-19 pandemic, it remains committed to further … Continue Reading

Basel Committee publishes stocktake report on climate-related financial risk initiatives

On 30 April 2020, the Basel Committee on Banking Supervision (Basel Committee) published a stocktake report on its members’ existing regulatory and supervisory initiatives on climate-related financial risks. The stocktake report notes that: the majority of Basel Committee members consider it appropriate to address climate-related financial risks within their existing regulatory and supervisory framework; an … Continue Reading

ESAs publish consultation paper on ESG disclosures

On 23 April 2020, the European Supervisory Authorities (ESAs) published a consultation paper seeking input on their proposed regulatory technical standards (RTS) on environmental, social and governance (ESG) disclosure for financial market participants, advisers and products. The RTS have been developed pursuant to the EU Regulation on sustainability-related disclosures in the financial services sector (SFDR), … Continue Reading

IOSCO report on sustainable finance and the role of securities regulators

On 14 April 2020, the International Organisation of Securities Commissions (IOSCO) published a report on sustainable finance and the role of securities regulators. The report provides an overview of current initiatives, both by regulators and the industry, and a detailed analysis of the most relevant ESG-related international initiatives and third-party frameworks and standards. It also … Continue Reading

European Commission sets out sustainability criteria for benchmarks

On Wednesday, 8 April 2020, the European Commission published three draft delegated regulations setting out sustainability criteria for benchmarks provided in accordance with the Regulation (EU) 2016/1011 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds (BMR). These measures follow amendments to the BMR introduced … Continue Reading

European Commission consults on Renewed Sustainable Finance Strategy – the focus areas

On 08 April 2020 the European Commission published a consultation on its forthcoming Renewed Sustainable Finance Action Plan [link]. The updated Commission action plan comes as a follow-up to its initial 2018 Sustainable Finance Action Plan and is meant to broaden and deepen the EU sustainable finance regulatory framework. Building on from the legislative and … Continue Reading

Signatories to the UN Principles for Responsible Banking publish a portfolio impact analysis tool for banks

On 31 March 2020, the United Nations Environment Programme Finance Initiative (UNEP FI) announced that a community of signatories to the Principles for Responsible Banking and UNEP FI member banks had developed a portfolio impact analysis tool for banks (the Tool) together with a guidance document. The Tool guides banks through a holistic analysis of … Continue Reading

EU Sustainable Finance expert group issues final report on taxonomy and guide on green bonds

On 9 March 2020, the European Commission Technical Expert Group on Sustainable Finance (TEG)  published its final report on the taxonomy. The final report and its Annex present the TEG’s final recommendations to the European Commission (Commission) relating to the overarching design of the taxonomy, the technical screening criteria for climate change mitigation objectives, climate change … Continue Reading

COP 26 Private Finance Agenda launched

On 27 February 2020, the Bank of England (BoE) announced the launch of the COP 26 Private Finance Agenda. This agenda has been launched to help private finance support the whole economy transition to net zero. To achieve net zero, every company, bank, insurer and investor will need to adjust their business models for a … Continue Reading

Climate change and the financial sector

On 27 February 2020, the European Central Bank (ECB) published a speech by its President, Christine Lagarde, entitled Climate change and the financial sector. Ms Lagarde focuses her remarks on climate change-related risks for the financial sector. Broadly speaking, the main risks fall into three categories: risks stemming from disregard, from delay and from deficiency. … Continue Reading

ESG in asset management – new webinar

As demand for environmental, social and governance (ESG) investments increases, we consider what is driving demand, and the implications for asset managers, including changes to their duties and disclosure obligations. This webinar focuses on developments in the EU, with a particular focus on the UK, the Netherlands and Germany. The webinar can be found on … Continue Reading

ESMA sets out strategy on sustainable finance

On 6 February 2020, the European Securities and Markets Authority (ESMA) announced its strategy on sustainable finance, setting out how the European Supervisory Authority will place sustainability at the core of its activities by embedding environmental, social and governance (ESG) factors at the forefront of its work. The key priorities for ESMA highlighted in the … Continue Reading

European Parliament compromise text on a Proposed Regulation on sustainable investment framework

On 24 January 2020, the European Parliament published an updated version of the procedure file for the proposed Regulation on the establishment of a framework to facilitate sustainable investment (known as the ‘Taxonomy Regulation’). The procedure file states that, on 16 January 2020, there was approval in committee of the text of the Taxonomy Regulation, … Continue Reading

EU technical expert group on sustainable finance handbook on climate benchmarks and ESG disclosures

On 20 December 2019, the EU technical expert group on sustainable finance (TEG) published a handbook on climate benchmarks and benchmarks’ environmental, social and governance (ESG) disclosures (the Handbook). The Handbook has been produced in response to frequently asked questions that the TEG encountered when presenting the EU Climate Transition Benchmark, the EU Paris Aligned … Continue Reading

Third meeting of the PRA and FCA’s joint Climate Financial Risk Forum

On 18 December 2019, the PRA and FCA published an update concerning their joint Climate Financial Risk Forum (CFRF) meeting in November. The update makes the following points: the meeting discussed the form of the outputs and the timeline for publishing them, as well as how to get wider industry input on draft guidance and … Continue Reading

Bank of England consults on its proposals for stress testing the financial stability implications of climate change

On 18 December 2019, the Bank of England (BoE) published a discussion paper which sets out its proposed framework for the 2021 Biennial Exploratory Scenario (BES) exercise. The objective of the BES is to test the resilience of the largest banks and insurers to the physical and transition risks associated with different possible climate scenarios, … Continue Reading

Council of EU invites approval of final compromise text of proposed ‘taxonomy Regulation’

On 18 December 2019, the Council of the EU (Council) published an ‘I’ Item note (dated 17 December 2019) on the proposed Regulation on the establishment of a framework to facilitate sustainable investment. Following negotiations between the Council and the European Parliament (Parliament), political agreement between the institutions was achieved on 17 December 2019 – … Continue Reading

European Green Deal announced

On 11 December 2019, the European Commission (Commission) presented The European Green Deal – a roadmap for making the EU’s economy sustainable by turning climate and environmental challenges into opportunities across all policy areas. To set into legislation the political ambition of Europe being the world’s first climate neutral continent by 2050, the Commission will … Continue Reading

Linking of Switzerland to the EU emissions trading system – entry into force on 1 January 2020

On 9 December 2019, the European Commission announced that on 1 January 2020 Switzerland will become the first country to successfully link its greenhouse gas emissions trading system with the EU emissions trading system. This completes a process which has taken almost 10 years. On 17 December 2010, the Council authorised the Commission to open … Continue Reading