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

    UK Regulators Announce Measures to Address Impact of COVID-19

    UK Regulatory Authorities published statements and guidance addressed to financial entities on dealing with the impact of the coronavirus (COVID-19) outbreak.

    March 26, 2020 WebPage Regulatory News
    News

    ISDA and Industry Request Delay in Timeline for Initial Margin Rules

    Considering the challenges posed by the COVID-19 pandemic, ISDA submitted a letter on behalf of 21 industry associations and their members requesting BCBS, IOSCO, and global regulators to suspend the current timeline for the initial margin phase-in.

    March 26, 2020 WebPage Regulatory News
    News

    FCA, FRC, and PRA Issue Joint Statement to Address Impact of COVID-19

    In response to the COVID-19 outbreak, FCA, the Financial Reporting Council (FRC), and PRA have announced a series of actions and made statements to support the continued functioning of capital markets in the UK.

    March 26, 2020 WebPage Regulatory News
    News

    EC Rule Corrects Regulation Supplementing Solvency II Directive

    EC published the EU Delegated Regulation 2020/442, which corrects the EU Delegated Regulation 2015/35 that supplements Solvency II Directive (2009/138/EC).

    March 26, 2020 WebPage Regulatory News
    News

    FED and FFIEC Offer Reporting Relief to Institutions Due to COVID-19

    FED and FFIEC announced regulatory reporting relief to financial institutions due to disruptions caused by the COVID-19.

    March 26, 2020 WebPage Regulatory News
    News

    EBA and ESMA Clarify Accounting Implications of COVID-19 Measures

    EBA and ESMA issued statements to address certain accounting implications of the economic support and relief measures adopted by EU member states in response to the COVID-19 crisis.

    March 25, 2020 WebPage Regulatory News
    News

    IOSCO and Securities Regulators Coordinate Responses to COVID-19

    IOSCO members are cooperating closely on their responses to the COVID-19-related disruption in capital markets.

    March 25, 2020 WebPage Regulatory News
    News

    US Agencies Issue Interim MMLF Rule, FED Updates FR Y-14 Forms

    In an effort to mitigate the impact of economic disruptions due to the COVID-19 outbreak, Money Market Mutual Fund Liquidity Facility (MMLF) was launched in the US to enhance the liquidity and functioning of money markets and to support the economy.

    March 25, 2020 WebPage Regulatory News
    News

    ESRB Updates List of Countercyclical Capital Buffers in March 2020

    ESRB updated the list of countercyclical capital buffer (CCyB) rates applicable in countries in the Eurosystem.

    March 24, 2020 WebPage Regulatory News
    News

    FHFA Amends Stress Testing Rule for Regulated Entities

    FHFA adopted a final rule that amends the stress testing rule, in line with section 401 of the Economic Growth, Regulatory Relief, and Consumer Protection (EGRRCP) Act.

    March 24, 2020 WebPage Regulatory News
    RESULTS 1 - 10 OF 4890