EC Seeks Input from ESAs on Greenwashing Risks
The European Commission (EC) is requesting inputs from each European Supervisory Authority (ESA) on the occurrence of greenwashing and related risks as well as the implementation, supervision, and enforcement of sustainable finance policies aimed at preventing greenwashing. The three ESAs are the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA), and the European Securities and Markets Authority (ESMA).
EC seeks input on greenwashing risks and the supervision of sustainable finance policies by means of a progress and final report. The progress reports from ESAs should take stock of the work undertaken to date, focusing on how greenwashing is understood and where it may materialize, actions taken, and tools developed to ensure adequate monitoring of greenwashing risks and early supervisory challenges in monitoring the application and enforcing new policies. The final reports should build on the findings of the progress reports and complement them, for instance, by providing examples of greenwashing cases and assessing their impact on the financial market, by assessing supervisory measures, supervisory obligations and powers related to fighting greenwashing cases and addressing greenwashing risks, and by assessing implementation of policies aiming at preventing greenwashing and addressing greenwashing risks. These progress reports and final reports are to be submitted in 12 months and 24 months respectively.
The inputs should also provide an overview and assessment of supervisory practices, experience, convergence, and supervisory capacities related to the prevention of greenwashing through available tools and powers at the time of this request. This should include whether existing tools and data are sufficient to adequately monitor and address greenwashing. EC seeks the input of ESAs with regard to supervision and enforcement both from a legal and a practical point of view. While the ESAs should accurately present the specificities of the respective sectors in their remit, the approach and basic structure of the reports should be coordinated among the ESAs to allow a certain degree of comparability across the reports and their findings. The reports should be accompanied by a shared summary of key horizontal aspects across all three reports. Based on these reports, EC will assess and monitor greenwashing risks in the financial market while the implementation of key policies is ongoing and will consider whether further steps are necessary for effective supervision and enforcement in this area and whether potential amendments to the existing rulebook are needed.
Related Link: Call for Advice (PDF)
Keywords: Europe, EU, Banking, Greenwashing, Sustainable Finance, Disclosures, ESAs, ESG, Basel, CRR, SFDR, Taxonomy Regulation, CSRD, EC
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