ESG

 

 

ESG

1. General information

The transition towards a greener and more sustainable economy has become a priority for the European Union (EU). The 2030 Agenda for Sustainable Development (the UN General Assembly ‘2030 Agenda’) has at its core the Sustainable Development Goals (SDGs) and covers the three dimensions of sustainability: Economic, Social and Environmental. The  European Commission subsequently linked the SDGs with the next steps for a sustainable European future, based on the central sustainability factors known as ESG: Environmental, Social and Governance considerations.

In 2019 ‘The European Green Deal’ has been published and important regulations are currently  now in force or under development with the view of achieving the sustainability goals and  a climate- neutral Europe until 2050.

The EU legal framework has defined  the following environmental objectives:

  1. climate change mitigation.
  2. Climate change adaptation.
  3. The sustainable use and protection of water and marine resources.
  4. The transition to a circular economy.
  5. Pollution prevention and control.
  6. The protection and restoration of biodiversity and ecosystems.

The integration of the sustainability considerations into the EU financial policy framework are presented in the European Action Plan on Sustainable Finance and in the EU Renewed Sustainable Finance Strategy.

ESMA is ensuring the integration of environmental, social and governance (ESG) factors across its core activities  and has responded, inter alia, to the EU consultation on the EU Renewed Sustainable Finance Strategy

The current European discussion on the Green Bond Standard is given here.

2. European Legal Framework

Taxonomy regulation

On 18 June 2020, the Taxonomy Regulation   was published in the Official Journal. The  delegated acts are currently under elaboration.

https://www.esma.europa.eu/sites/default/files/library/jc_2021_02_letter_to_eu_commission_on_priority_issues_relating_to_sfdr_application.pdf

The ESAs plan to issue a public supervisory statement before the application date of SFDR in order to achieve an effective and consistent application of the SFDR’s requirements and consistent national supervision of the SFDR.

 

The ESAs will also publish a consultation on taxonomy-related product disclosures under the Taxonomy Regulation which amends the empowerments in Articles 8(4), 9(6) and 11(5) of the SFDR.

 

 

Regulation on sustainability benchmarks

 

 

 

ESMA Report on undue short- term pressure on corporations

ESMA TRENDS RISKS & VULNERABILITIES REPORT (special section on sustainable finance)

https://www.esma.europa.eu/market-analysis/financial-stability

and https://www.esma.europa.eu/sites/default/files/library/esma_50-165-1287_report_on_trends_risks_and_vulnerabilities_no.2_2020.pdf

 

 

4. Useful links

IOSCO

https://www.iosco.org/news/pdf/IOSCONEWS564.pdf

https://www.iosco.org/library/pubdocs/pdf/IOSCOPD652.pdf

https://www.iosco.org/library/pubdocs/pdf/IOSCOPD619.pdf

OECD

Towards a green recovery: http://www.oecd.org/

International Platform on Sustainable Finance

Athens Exchange ESG guide