On 27 March 2019, HM Treasury published a letter from Economic Secretary, John Glen MP, to the Chair of the House of Lords European Union Committee. The letter provides an update on the progress of the EU Regulation on disclosures relating to sustainable investments and sustainability risks (the Regulation).
Trilogues began on the Regulation in mid-January, with a political agreement being reached on 7 March. The final text of the Regulation was agreed at the meeting of the Permanent Representatives Committee of 27 March 2019. The Regulation is expected to progress to the European Parliament in April, however it is uncertain when it will proceed to the European Council for final adoption. The final political agreement reportedly maintains the European Council’s general approach to the Regulation, with some additional compromise requirements as advocated by the European Parliament.
The letter addresses some questions raised by the Chair of the House of Lords European Union Committee in an earlier letter. In addressing these responses, amongst other things, the letter notes that, following concerns being raised, the Council’s general approach has allowed a wide spectrum of sustainable investment products to be captured by requirements within the Regulation – which had been argued as too narrow previously.
Mr Glenn expects the majority of the requirements within the Regulation to take effect 18 months following its adoption, although some requirements have provided for a 36 month transitional period. If these rules take effect during a Brexit implementation period, the will automatically apply in the UK.