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Topic: ESG

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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

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

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

IOSCO sees an urgent need for globally consistent sustainability disclosure standards and announces its priorities and vision for a Sustainability Standards Board

On 24 February 2021, the International Organization of Securities Commissions (IOSCO) issued a press release following a board meeting in which it discussed the progress made over the past year by its Sustainable Finance Task Force (STF). In the statement the ISOCO board identifies three priority areas for improvement in sustainability-related disclosures by companies and … Continue Reading

FSB Chair’s letter to G20 Finance Ministers and Central Bank Governors: February 2021

On 25 February 2021, the Financial Stability Board (FSB) published a letter from its chair to G20 Finance Ministers and Central Bank Governors. The letter notes the unprecedented challenges faced by the FSB due to the COVID-19 pandemic and the imposition of containment measures across the globe. The letter also discusses the key priorities in … Continue Reading

Commission summary report of stakeholder consultation on the Renewed Sustainable Finance Strategy

On 10 February 2021, the European Commission (Commission) published a summary report of the stakeholder consultation on the Renewed Sustainable Finance Strategy. On 11 December 2019, the Commission adopted its Communication on a European Green Deal (EGD), which significantly increases the EU’s climate action and environmental policy ambitions. However, the financial system as a whole … Continue Reading

ESG for asset managers: 10 things you need to know

We have published a new online briefing note – ESG for asset managers: 10 things you need to know. Our asset management regulation hub located on the Norton Rose Fulbright Institute contains a dedicated sustainable finance page setting out numerous resources to help financial institutions and investors who are facing a growing requirement to assess, … Continue Reading

ESAs publish final report and draft RTS on disclosures under SFDR

On 4 February 2021, the European Supervisory Authorities published a final report containing draft regulatory technical standards (RTS) on the content, methodologies and presentation of sustainability-related disclosures under the empowerments set out in Articles 2a, 4(6) and (7), 8(3), 9(5) and 10(2) and 11(4) of the Sustainable Finance Disclosure Regulation (SFDR). The draft RTS relate … Continue Reading

Joint Statement on the International Platform on Sustainable Finance

On 3 February 2021, HM Treasury issued guidance concerning a joint statement on the International Platform on Sustainable Finance (IPSF). The IPSF was launched on 18 October 2019. Its members are public authorities in charge of developing environmentally sustainable finance policies in Argentina, Canada, Chile, China, Hong Kong Special Administrative Region of the People’s Republic … Continue Reading

Letter to Mairead McGuinness from the Chair on ESG ratings and assessment tools

On 29 January 2021, the European Securities and Markets Authority (ESMA) published a letter it had sent to the European Commission setting out its views on the main challenges in the area of environmental, social and governance (ESG) ratings and assessment tools. The letter builds on ESMA’s response to the Commission consultation on the renewed … Continue Reading

EBF-UNEP FI report outlines path for application of EU Taxonomy to core banking services

On 26 January 2021, the European Banking Federation and the United Nations Environment Programme Finance Initiative co-launched a report that assesses how the EU Taxonomy can be applied to core banking products. The report is based on case studies analysing transactions and existing client relationships across a large spectrum of sectors, economic activities and geographical … Continue Reading

ESAs letter to Commission on priority issues relating to SFDR application

On 15 January 2021, the Joint Committee of the European Supervisory Authorities (ESAs) published a letter it had sent to the European Commission concerning priority issues relating to the draft regulatory technical standards (RTS) under Regulation 2019/2088 on sustainability-related disclosures in the financial services sector (SFDR). The letter reports that areas of uncertainty have been … Continue Reading

EIOPA publishes sensitivity data on climate-related transition risks in the investment portfolios of European insurers

The European Insurance and Occupational Pensions Authority (EIOPA) has published a sensitivity analysis of climate-related transition risks in the investment portfolios of European insurers. The report considers the current holdings by European insurers of corporate bonds and equity that relate to key climate-policy related sectors such as fossil fuel extraction (i.e. coal mining), carbon‐intensive industries, … Continue Reading

EIOPA publishes a discussion paper on non-life underwriting and pricing in light of climate change

The European Insurance and Occupational Pensions Authority (EIOPA) has published a discussion paper on non-life underwriting and pricing in light of climate change. The discussion paper is a follow-up to the EIOPA opinion on sustainability within Solvency II (published in September 2019) in which EIOPA noted that it was common for non-life business not to … Continue Reading

US Federal Reserve joins NGFS and two new publications released

On 15 December 2020, the Network for Greening the Financial System (NGFS) announced the following new members: US Federal Reserve System, Central Bank of Paraguay, Financial Regulatory Authority of Egypt, Financial Services Authority of Indonesia, Central Bank of Iceland, Polish Financial Supervision Authority, Central Bank of Uruguay and the European Securities and Markets Authority. The … Continue Reading

UNEP FI draft guidance document – reporting on the principles for responsible banking

The United Nations Environment Programme Finance Initiative (UNEP FI) is a partnership between UNEP and the global financial sector to mobilize private sector finance for sustainable development. The Principles for Responsible Banking (PRB) are a unique framework for ensuring that signatory banks’ strategy and practice align with the vision society has set out for its … Continue Reading

Delegated acts on ESG disclosure requirements for benchmark administrators published in OJ

On Thursday, 3 December 2020, the long-anticipated delegated acts on the environmental, social and governance (ESG) disclosure requirements for benchmark administrators authorised or registered under European Benchmark Regulation (BMR) were published in the EU Official Journal (OJ). In addition to the delegated acts on the ESG disclosure requirements, a delegated act on the EU Climate … Continue Reading

ECB publishes final guide on climate-related and environmental risks for banks

On 27 November 2020, the European Central Bank (ECB) published its final and amended guide on climate-related and environmental risks following a public consultation. The guide outlines the ECB’s understanding of the safe and prudent management of climate-related and environmental risks under the current prudential framework. It describes how the ECB expects institutions to consider … Continue Reading

Sustainable Finance and Taxonomy: Commission launches public consultation on criteria defining environmentally sustainable activities

On 22 November 2020, the European Commission issued a consultation on a draft delegated act under the Taxonomy Regulation. The Taxonomy Regulation establishes the framework for the EU taxonomy by setting out four conditions that an economic activity must meet in order to qualify as environmentally sustainable: It contributes substantially to one or more of … Continue Reading
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