Featured Product

    European Council Agrees Position on Sustainable Investment Taxonomy

    September 25, 2019

    European Council notified that EU ambassadors agreed with the position of the Council on a proposal to create an EU-wide classification system, or taxonomy, to provide businesses and investors with a common language to identify what economic activities can be considered environmentally sustainable. At present, there is no common classification system at EU or global level to define an environmentally sustainable economic activity. The proposed regulation is meant to reduce fragmentation resulting from market-based initiatives and national practices and to reduce the practice of marketing financial products as green or sustainable, when in fact they do not meet basic environmental standards. According to the Council position, the taxonomy should be established by the end of 2021, to ensure its full application by end of 2022.

    As set out in the European Council position, the proposal identifies and defines six EU environmental objectives—climate change mitigation; climate change adaptation; sustainable use and protection of water and marine resources; transition to a circular economy, including waste prevention and recycling; pollution prevention and control; and protection and restoration of biodiversity and ecosystems. To qualify as environmentally sustainable, economic activities would have to fulfill the following requirements:

    • Contribute substantively to at least one of the six environmental objectives
    • Not significantly harm any of the environmental objectives
    • Be carried out in compliance with minimum social and governance safeguards
    • Comply with specific technical screening criteria

    EC would then be tasked to establish the actual classification by defining technical screening criteria for each relevant environmental objective. Legally, the criteria would take the form of delegated acts regarding the sector classification of economic activities. They would be supplemented by the implementing acts defining quantitative and qualitative thresholds that must be met by an economic activity that is to be considered environmentally sustainable. EC would be assisted by a technical expert group, "Platform on sustainable finance," which would be mandated to provide advice for developing the technical screening criteria and analyze their impact in terms of potential costs and benefits of their application. In addition, EC will be advised by an expert group consisting of experts from member states on the appropriateness of the technical screening criteria. The European Parliament voted on its position in March 2019. Negotiations between the Council and the Parliament are, therefore, ready to start.

     

    Related Links

    Keywords: Europe, EU, Banking, Insurance, Securities, Sustainable Finance, Taxonomy, ESG, Climate Change Risk, European Parliament, European Council

    Related Articles
    News

    APRA Updates Lists of Validation and Derivation Rules in December 2019

    APRA updated the lists of the Direct to APRA (D2A) validation and derivation rules for authorized deposit-taking institutions, insurers, and superannuation entities.

    December 13, 2019 WebPage Regulatory News
    News

    APRA Finalizes Prudential Standard for Credit Risk Management of Banks

    APRA updated the prudential standard on credit risk management requirements (APS 220) for authorized deposit-taking institutions, post a public consultation.

    December 12, 2019 WebPage Regulatory News
    News

    EIOPA Consults on Guidelines on ICT Security and Governance

    EIOPA issued a consultation on guidelines on the Information and Communication Technology (ICT) security and governance by insurers.

    December 12, 2019 WebPage Regulatory News
    News

    BCBS Consults on Design of Prudential Treatment for Crypto-Assets

    BCBS published a discussion paper on the design of prudential treatment for crypto-asset exposures of banks.

    December 12, 2019 WebPage Regulatory News
    News

    NCUA Approves Delay of Risk-Based Capital Rules Until January 2022

    The NCUA Board held its eleventh open meeting of 2019 and approved a final rule to delay the effective date of the risk-based capital rules for credit unions to January 01, 2022.

    December 12, 2019 WebPage Regulatory News
    News

    APRA Issues Operational Risk Rules, Consults on Reporting Requirements

    APRA published an updated prudential standard APS 115 that sets out operational risk requirements for authorized deposit-taking institutions in Australia.

    December 11, 2019 WebPage Regulatory News
    News

    ESMA Updates Q&A on European Benchmarks Regulation in December 2019

    ESMA updated the question and answers (Q&A) document on the European Benchmarks Regulation.

    December 11, 2019 WebPage Regulatory News
    News

    APRA Decides to Keep Countercyclical Capital Buffer for Banks at 0%

    APRA announced its decision to keep the countercyclical capital buffer (CCyB) for authorized deposit-taking institutions on hold at zero percent.

    December 11, 2019 WebPage Regulatory News
    News

    ESMA on Draft Amendments to Indices and Recognized Exchanges Under CRR

    ESMA issued the final report on draft amendments to the Implementing Regulation (EU) 2016/1646, which specifies the main indices and recognized exchanges, under the Capital Requirements Regulation (CRR), that are relevant to credit institutions and investment firms subject to prudential requirements and trading venues.

    December 11, 2019 WebPage Regulatory News
    News

    FED Extends Consultation Period for Capital Requirements for Insurers

    FED is extending comment period for the proposed rule establishing risk-based capital requirements for depository institution holding companies that are significantly engaged in insurance activities.

    December 10, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 4316