The Eurogroup issued a statement welcoming the intention of the European Commission (EC) to launch a targeted public consultation on digital euro, as part of the pre-legislative process. This investigative work will benefit from the views of Eurogroup members. The Eurogroup identified a number of topics on which it will make contributions, working closely with the European Central Bank (ECB) and EC. In another development, the European Council agreed its general approach on the EC proposal for a Corporate Sustainability Reporting Directive (CSRD), which will complement the European sustainable finance strategy. The Council amended the scope proposed by EC to ensure that reporting requirements are not too burdensome for listed small and medium-size enterprises (SMEs) and that they have sufficient time to adapt to the new rules. The Council presidency shall start further discussions with the European Parliament, which are expected to start in Spring 2022.
The EC proposal revises the non-financial reporting directive from 2014. The proposal aims to address shortcomings in the existing rules on disclosure of non-financial information, which was of insufficient quality and comparability to allow it to be properly taken into account by investors. Such shortcomings hinder the transition to a sustainable economy. The harmonization of sustainability data will be made possible by the definition of sustainability reporting standards, which EC is to adopt via a Delegated Act, following a technical advice from the European Financial Reporting Advisory Group (EFRAG) and a number of European agencies. The EC proposal will ensure the robustness of companies’ commitments by introducing the following new features:
- An extension of the scope to all large companies and companies listed on a regulated market (except listed micro-companies)
- A certification requirement for sustainability reporting
- More detailed and standardized requirements on the information to be published by companies
- Improved accessibility of information, by requiring its publication in a dedicated section of company management reports
Coming back to the Eurogroup statement on digital euro, in November 2021, the Eurogroup discussed the policy objectives and uses of a digital euro in the global competitive context, taking into account broader initiatives at the international level. The next thematic discussion, in April 2022, will be on privacy considerations and how they square with other policy objectives, such as countering money laundering, illicit financing, and tax evasion. Eurogroup will then turn to potential impact of the digital euro on the financial system and the use of cash, in June 2022. Then, in the latter half of the year, the Eurogroup will discuss the broader ecosystem around the digital euro and the role and business models of the various public and private actors in this ecosystem, which in turn could have implications for efficiency, competition, innovation, and the inclusiveness of the digital euro. The Eurogroup will continue to play an active role and to contribute with regular discussions on the digital euro in line with the advancement of the Eurosystem investigation phase and the work by ECB and EC.
Keywords: Europe, EU, Banking, CSRD, NFRD, Reporting, Sustainable Finance, ESG, Climate Change Risk, Digital Euro, EC, European Council, Regtech, Suptech, Digital Currencies
Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
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