EC Welcomes Provisional Agreement on European Climate Law
EC welcomed the provisional agreement between the co-legislators (that is negotiators of European Council and European Parliament) on the European Climate Law. As one of the key elements of the European Green Deal, the European Climate Law enshrines the EU's commitment to reaching climate neutrality by 2050 and the intermediate target of reducing net greenhouse gas emissions by at least 55% by 2030, compared to the 1990 levels. This agreement on the European Climate Law is a key milestone for the von der Leyen Commission, delivering on one of the commitments announced in the President's Political Guidelines in July 2019.
In addition to the 2050 climate-neutrality target, the provisional agreement strengthens the European framework for climate action by introducing the following elements:
- An ambitious 2030 climate target of at least 55% reduction of net emissions as compared to 1990, with clarity on the contribution of emission reductions and removals
- Recognition of the need to enhance the EU's carbon sink through a more ambitious land use, land use change and forestry (LULUCF) regulation, for which EC will make proposals in June 2021
- A process for setting a 2040 climate target, taking into account an indicative greenhouse gas budget for 2030-2050 to be published by EC
- A commitment to negative emissions after 2050
- Establishment of European Scientific Advisory Board on Climate Change, that will provide independent scientific advice
- Stronger provisions on adaptation to climate change
- Strong coherence across Union policies with the climate-neutrality objective
- Commitment to engage with sectors to prepare sector-specific roadmaps charting the path to climate-neutrality in different areas of the economy
EC tabled its proposal for a European Climate Law on March 04, 2020. The provisional political agreement is subject to approval by the Council and Parliament, before going through the formal steps of the adoption procedure. After approval, the European Climate Law will be published in the Official Journal of the Union and will enter into force.
Related Links
Keywords: Europe, EU, Banking, Insurance, Securities, European Climate Law, European Green Deal, Climate Change Risk, ESG, Low-Carbon Economy, European Council, European Parliament, EC
Featured Experts
Michael Denton, PhD, PE
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.
James Partridge
Credit analytics expert helping clients understand, develop, and implement credit models for origination, monitoring, and regulatory reporting.
Previous Article
MNB Issues Recommendation on Climate and Environmental RisksRelated Articles
BIS and Central Banks Experiment with GenAI to Assess Climate Risks
A recent report from the Bank for International Settlements (BIS) Innovation Hub details Project Gaia, a collaboration between the BIS Innovation Hub Eurosystem Center and certain central banks in Europe
Nearly 25% G-SIBs Commit to Adopting TNFD Nature-Related Disclosures
Nature-related risks are increasing in severity and frequency, affecting businesses, capital providers, financial systems, and economies.
Singapore to Mandate Climate Disclosures from FY2025
Singapore recently took a significant step toward turning climate ambition into action, with the introduction of mandatory climate-related disclosures for listed and large non-listed companies
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
EBA Proposes Standards Related to Standardized Credit Risk Approach
The European Banking Authority (EBA) has been taking significant steps toward implementing the Basel III framework and strengthening the regulatory framework for credit institutions in the EU
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
