ESMA published its strategy on sustainable finance. The strategy sets out how ESMA will place sustainability at the core of its activities by embedding Environmental, Social, and Governance (ESG) factors in its work. The priorities for ESMA include transparency obligations, risk analysis on green bonds, ESG investing, convergence of national supervisory practices on ESG factors, taxonomy, and supervision. Annex to the strategy provides indicative timeline for actions on sustainable finance.
The key priorities for ESMA highlighted in the strategy include:
- Completing the regulatory framework on transparency obligations via the Disclosures Regulation, under which ESMA will work with EBA and EIOPA to produce joint technical standards
- Reporting on trends, risks, and vulnerabilities (TRV) of sustainable finance by including a dedicated chapter in its TRV report, including indicators related to green bonds, ESG investing, and emission-allowance trading
- Using the data at its disposal to analyze financial risks from climate change, including potentially climate-related stress testing in different market segments
- Pursuing convergence of national supervisory practices on ESG factors, with a focus on mitigating the risk of greenwashing, preventing mis-selling practices, and fostering transparency and reliability in the reporting of non-financial information
- Participating in EU Platform on Sustainable Finance that will develop and maintain the EU taxonomy and monitor capital flows to sustainable finance
- Ensuring ESG guidelines are adhered to in the entities that ESMA supervises directly, while being ready to accept any new supervisory mandates related to sustainable finance
To help deliver its strategy, ESMA had set up a Coordination Network on Sustainability in 2019. The network is composed of experts from national competent authorities and ESMA staff. It will be supported by a consultative working group of stakeholders, which is expected to be established in the coming months.
Keywords: Europe, EU, Banking, Securities, Sustainable Finance, ESG, Taxonomy, Climate Change Risks, Stress Testing, Supervisory Convergence, Disclosures, ESMA
Previous ArticleEIOPA Publishes Discussion Paper on IBOR Transitions
FED finalized a rule that updates capital planning requirements to reflect the new framework from 2019 that sorts large banks into categories, with requirements that are tailored to the risks of each category.
ECB published results of the quarterly lending survey conducted on 143 banks in the euro area.
ESAs published the final draft implementing technical standards on reporting of intra-group transactions and risk concentration of financial conglomerates subject to the supplementary supervision in EU.
EBA published the annual report on asset encumbrance of banks in EU.
MAS revised the guidelines that address technology and cyber risks of financial institutions, in an environment of growing use of cloud technologies, application programming interfaces, and rapid software development.
FED updated the reporting form and instructions for the FR Y-9C report on consolidated financial statements for holding companies.
EBA issued a consultation paper on the guidelines on monitoring of the threshold and other procedural aspects of the establishment of intermediate EU parent undertakings, or IPUs, as laid down in the Capital Requirements Directive.
EC published Regulation 2021/25 that addresses amendments related to the financial reporting consequences of replacement of the existing interest rate benchmarks with alternative reference rates.
BIS published a bulletin, or a note, that examines the cyber threat landscape in the context of the pandemic and discusses policies to reduce risks to financial stability.
HM Treasury, also known as HMT, has updated the table containing the list of the equivalence decisions that came into effect in UK at the end of the transition period of its withdrawal from EU.