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Topic: ESG

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Bank of England is restarting the Climate Biennial Exploratory Scenario

On 13 November 2020, the Bank of England (BoE) announced that it will be restarting the Climate Biennial Exploratory Scenario (CBES) from June 2021. The announcement lists those institutions that have been invited to take part in the CBES and the planned engagement with participants ahead of the June 2021 launch. Planned engagement before June … Continue Reading

UK Finance Sustainable Finance White Paper

On 12 November 2020, UK Finance issued a White Paper on Sustainable Finance.   The White Paper sets out UK Finance’s recommendations on principles that should underpin the measurement of multi-year commitments to sustainable finance. The principles were developed though discussion with a panel of a dozen firms and approved by UK Finance’s senior sustainability … Continue Reading

UK joint regulator and government TCFD Taskforce: Interim Report and Roadmap

On 9 November 2020, HM Treasury published an Interim Report of the UK’s Joint Government-Regulator TCFD Taskforce together with a roadmap towards mandatory climate-related disclosures. The Taskforce on Climate-related Financial Disclosures (TCFD) is a private sector led group convened by the Financial Stability Board in 2015 to “develop voluntary, consistent climate-related financial disclosures that would … Continue Reading

BoE and FCA speeches on climate change

On 9 November 2020, there was published the following speeches: The time to push ahead on tackling climate change. In this speech the Governor of the Bank of England (BoE), Andrew Bailey, discusses climate change and the role of the financial system. Among other things Mr Bailey announces the launch date of a climate stress … Continue Reading

First steps taken towards a mandatory human rights due diligence law

On 26 October 2020, the European Commission (the Commission) launched a public consultation[1] on sustainable corporate governance (the Consultation), soliciting responses from stakeholders on a possible EU sustainable corporate governance initiative with the aim of ensuring “that environmental and social interests are embedded in business strategies”. The Consultation will, according to the Commission, complement the … Continue Reading

ESMA consults on draft advice to the Commission under Article 8 of the Taxonomy Regulation

On 5 November 2020, the European Securities and Markets Authority (ESMA) issued a consultation paper containing in draft form its advice to the European Commission (Commission) on Article 8 of the Taxonomy Regulation. Article 8 of the Taxonomy Regulation obliges undertakings covered by the Non-Financial Reporting Directive to publish information on how and to what … Continue Reading

EBA discussion paper on management and supervision of ESG risks for credit institutions

On 3 November 2020, the European Banking Authority (EBA) issued a discussion paper on the management and supervision of environmental, social and governance (ESG) risks for credit institutions and investment firms. In the discussion paper ESG factors and ESG risks are identified and explained, giving particular consideration to risks stemming from environmental factors and especially … Continue Reading

Letter to ESAs – application of Regulation (EU) 2019/2088 on the sustainability-related disclosures in the financial services sector

On 30 October 2020, the European Commission published a letter from it to the chairs of the European Supervisory Authorities. The letter was with regard to the application of Regulation (EU) 2019/2088 on the sustainability related disclosures in the financial services sector and related technical standards. Key points in the letter include: The co-legislators agreed … Continue Reading

Regulatory initiatives applicable to impact investing

As the regulatory framework concerning environmental, social and governance (ESG) issues continues to develop, new rules will govern how impact investing is undertaken. Although the core focus of the ESG agenda has been on environmental sustainability, social matters have also been addressed and are likely to grow in importance in the coming years, particularly in … Continue Reading

FSB task force on climate-related financial disclosures – 2020 status report

On 29 October 2020, the Financial Stability Board’s (FSB) task force on climate-related financial disclosures (TCFD) published its 2020 status report on TCFD-aligned disclosures by firms. The FSB established the TCFD in 2015 and tasked it with developing a set of voluntary, consistent disclosure recommendations for use by companies in providing information to investors, lenders … Continue Reading

BIS speech – The Basel Committee’s initiatives on climate related financial risks

On 14 October 2020, the Bank for International Settlements published a speech by Kevin Stiroh (Co-Chair of the Task Force on Climate-related Financial Risks of the Basel Committee on Banking Supervision and Executive Vice President of the Federal Reserve Bank of New York) on the Basel Committee’s initiatives on climate-related financial risks. In his speech … Continue Reading

The Sustainable Finance Regulation Video Series

  Volume 2: key risk and governance considerations   Over the next few months, Norton Rose Fulbright’s financial services conduct team will be releasing a series of videos focussing on sustainable finance regulation issues affecting financial services firms. In volume 2 of the series, John Coley discusses the key risk and governance issues emerging in … Continue Reading

ESAS launch survey on environmental and/or social financial product templates

On 21 September 2020, the European Supervisory Authorities (ESAs) published a survey seeking public feedback on presentational aspects of product templates, pursuant to Article 8(3), Article 9(5) and Article 11(4) of the Regulation on sustainability‐related disclosures in the financial services (SFDR). In particular, the ESAs are inviting stakeholders to comment on the layout of the … Continue Reading

EBA seeks input from institutions on their ESG disclosure practices

On 17 September 2020, the European Banking Authority (EBA) published an online survey to receive input from credit institutions on their practices and views in the area of disclosure of information on environmental, social and governance (ESG) risks. The survey, which is addressed to large credit institutions that will be required to disclose prudential information … Continue Reading

ESG Compass for the Disclosure Regulation

The new European Disclosure Regulation provides the central schedule of obligations for ESG-related disclosures in the EU financial services sector. Many of the disclosure requirements start to apply from 10 March 2021 and therefore all financial market participants and financial advisors need to start considering the content of the requirements in order to address the … Continue Reading

NGFS technical document: overview of environmental risk analysis by financial institutions

On 10 September 2020, the Central Banks and Supervisors’ Network for Greening the Financial System (NGFS) issued the following publications: The Overview of Environmental Risk Analysis by Financial Institutions. This report provides wide-ranging examples of how environmental risks translate into financial risks, and an in-depth review of the tools and methodologies for environmental risk analysis … Continue Reading

NGFS publishes its 2020-2022 work program and announces changes in the governance

On 3 September 2020, the Network for Greening the Financial System (NGFS) announced its 2020 – 2022 work program that will include continuing its work on climate scenario analysis and scaling up green finance. The NGFS will also create two new work streams focussing on addressing data gaps and research. The NGFS, launched at the … Continue Reading

FMLC response to ESAs’ joint consultation paper on ESG disclosures

On 2 September 2020, the Financial Markets Law Committee (FMLC) published its response to the joint consultation paper that the European Supervisory Authorities (ESAs) published on 22 April 2020 dealing with proposed regulatory technical standards (RTS) under the Sustainable Finance Disclosure Regulation (SFDR). The FMLC has submitted a response drawing attention to the divergence in … Continue Reading

The Sustainable Finance Regulation Video Series

Volume 1: Foreign Banks Operating in the UK Over the next few months, Norton Rose Fulbright’s financial services conduct team will be releasing a series of videos focussing on sustainable finance regulation issues affecting financial services firms. In volume 1 of the series, Hannah McAslan discusses the sustainable finance regulation issues impacting on foreign banks … Continue Reading

New briefing note: Sustainable finance considerations for UK branches/subsidiaries of foreign banks

We have been working with a number of institutions, helping them to navigate the complexities of requirements around sustainable finance and managing the financial risks posed by climate change. One of the areas where this has been most pronounced, is in relation to branches and subsidiaries of third-country banks, who are required to both consider … Continue Reading

Commission roadmap on Delegated Regulation on taxonomy-related disclosures by undertakings reporting non-financial information

On 28 July 2020, the European Commission published, for consultation, a roadmap on a Delegated Regulation on taxonomy-related disclosures by undertakings reporting non-financial information supplementing the Taxonomy Regulation. The Delegated Regulation will specify the requirements for entities subject to the Non-Financial Reporting Directive (NFRD) (i.e., large listed undertakings, large banks and large insurance undertakings with … Continue Reading

FSB stock take on climate-related risks in financial stability monitoring

On 22 July 2020, the Financial Stability Board (FSB) published a stocktake of financial authorities’ experience in including climate-related risks in financial stability monitoring. It draws on information provided by FSB member national authorities, international bodies and a workshop with the private sector. The stocktake finds that financial authorities vary in terms of whether – … Continue Reading
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