Europe — The European Commission has just announced a new package of measures to strengthen the EU sustainable finance framework.
The package aims to support companies and investors in the transition to a climate-neutral and sustainable economy by 2050 while ensuring compliance with disclosure and reporting requirements.
The key elements of the package include:
𝗘𝗨 𝗧𝗮𝘅𝗼𝗻𝗼𝗺𝘆 𝗗𝗲𝗹𝗲𝗴𝗮𝘁𝗲𝗱 𝗔𝗰𝘁𝘀
The Commission approved in principle a Taxonomy Environmental Delegated Act, including a new set of EU Taxonomy criteria for economic activities making a substantial contribution to one or more of the non-climate environmental objectives (sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and control and protection and restoration of biodiversity and ecosystems).
Amendments have also been made to the Taxonomy Climate Delegated Act, covering the environmental objectives of climate change mitigation and adaptation, and to the Taxonomy Disclosures Delegated Act.
𝗥𝗲𝗴𝘂𝗹𝗮𝘁𝗶𝗼𝗻 𝗳𝗼𝗿 𝗘𝗦𝗚 𝗥𝗮𝘁𝗶𝗻𝗴𝘀 𝗣𝗿𝗼𝘃𝗶𝗱𝗲𝗿𝘀
The Commission is proposing a regulation to improve the reliability and transparency of ESG ratings activities. The new rules will establish organizational principles and prevent conflicts of interest, ensuring the integrity of ESG rating providers. Additionally, ESG rating providers offering services in the EU will need to be authorized and supervised by the European Securities and Markets Authority (ESMA) to protect investors and ensure market integrity.
The Commission has taken measures to address implementation issues and provide guidance to stakeholders. The Commission has developed targeted initiatives and published the EU Taxonomy User Guide to enhance usability and support stakeholders in implementing the sustainable finance framework.
The package includes recommendations on transition finance, offering guidance and practical examples for companies of different sizes and starting points, and the financial sector.
Next steps: The EU Taxonomy Delegated Acts are approved in principle, and once all EU official languages will be made available, they will be adopted and transmitted to the European Parliament and the Council for their scrutiny (four-month period, extendable once by two additional months). They are expected to apply as of January 2024.
Discussions with the European Parliament and Council will take place regarding the proposed regulation for ESG ratings providers.
Source: European Commission