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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

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

Commission Delegated Regulations supplementing BMR on sustainable finance issues

On 17 July 2020, the European Commission updated its web page concerning implementing and delegated acts on the Benchmarks Regulation (BMR) by adding the following: Commission Delegated Regulation supplementing Regulation (EU) 2016/1011 of the European Parliament and of the Council as regards the explanation in the benchmark statement of how environmental, social and governance factors … Continue Reading

ESAs’ letter on the public consultation on a renewed sustainable finance strategy

On 15 July 2020, the European Supervisory Authorities (ESAs) jointly published a letter welcoming the European Commission’s public consultation on a renewed sustainable finance strategy as part of its European Green deal. In the letter the ESAs discuss the following topics that they feel would further bolster Europe’s future sustainable finance strategy: (i) high-quality, user … 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

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

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
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