The European Commission (EC) published a proposal on Insolvency Directive and adopted the technical standards to be used by major listed banks when disclosing environmental, social, and governance (ESG) risks, in accordance with the Capital Requirements Regulation (CRR: 575/2013).
The recently adopted Implementing Regulation amends the Implementing Regulation 2021/637 that specifies uniform disclosure formats and associated instructions for the disclosures required under Titles II and III of the Capital Requirements Regulation (CRR). The CRR was amended by Regulation (EU) 2019/8763, which introduced a new Article 449a. This Article requires large institutions that have issued securities that are admitted to trading on a regulated market of any member state to disclose, as of June 28, 2022, information on ESG risks, including physical and transition risks. This amendment to the CRR is reflected in the Implementing Regulation 2021/637, which should set out, in addition to the existing uniform disclosure formats and associated instructions, additional uniform disclosure formats and associated instructions for the disclosures of ESG risks. The Implementing Regulation enters into force on the twentieth day following that of its publication in the Official Journal of the European Union. Annex 1 of the amending regulation addresses disclosure templates while the Annex 2 addresses disclosure instructions on ESG risks. With this proposal, EC is integrating ESG risks into the prudential framework of European Union. As a first step, these rules will ensure that major listed banks are transparent about how they manage sustainability risks. It is expected to be an example of good practice globally.
With respect to the development on Insolvency Directive, EC put forward measures to further develop the Capital Markets Union to make EU clearing services more attractive and resilient, to harmonize certain corporate insolvency rules across EU, and to alleviate—through a new Listing Act—the administrative burden for companies of all sizes, in particular small and medium enterprises, so that they can better access public funding by listing on stock exchanges. The clearing package consists of a Communication and a Regulation amending the European Market Infrastructure Regulation (EMIR), the Capital Requirements Regulation (CRR), and the Money Market Funds (MMF) Regulation; a Directive amending the Capital Requirements Directive (CRD), Investment Firm Directive (IFD), and the Directive on Undertakings for Collective Investment in Transferable Securities (UCITS).
- EC News Release on ESG Rules
- Implementing and Delegated Acts
- Regulation 2022/2453 on ESG Risks
- Proposal on Insolvency Directive
Keywords: Europe, EU, Banking, ESG, Disclosures, Climate Change Risk, Transition Risk, CRR, Basel, Regulatory Capital, Insolvency Directive, EC
Previous ArticleMAS Defers Implementation and Issues Reporting Pack for Basel Rules
The use cases of generative AI in the banking sector are evolving fast, with many institutions adopting the technology to enhance customer service and operational efficiency.
As part of the increasing regulatory focus on operational resilience, cyber risk stress testing is also becoming a crucial aspect of ensuring bank resilience in the face of cyber threats.
A few years down the road from the last global financial crisis, regulators are still issuing rules and monitoring banks to ensure that they comply with the regulations.
The European Commission (EC) recently issued an update informing that the European Council and the Parliament have endorsed the Banking Package implementing the final elements of Basel III standards
The Swiss Federal Council recently decided to further develop the Swiss Climate Scores, which it had first launched in June 2022.
The Basel Committee on Banking Supervision (BCBS) launched consultation on a Pillar 3 disclosure framework for climate-related financial risks, with the comment period ending on February 29, 2024.
The U.S. President Joe Biden signed an Executive Order, dated October 30, 2023, to ensure safe, secure, and trustworthy development and use of artificial intelligence (AI).
The Monetary Authority of Singapore (MAS) launched an integrated digital platform, Gprnt, also known as “Greenprint.”
The European Banking Authority (EBA) has published the final templates, and the associated guidance, for collecting climate-related data for the one-off Fit-for-55 climate risk scenario analysis.
The Network for Greening the Financial System (NGFS) published its latest set of long-term climate macro-financial scenarios (Phase IV) for assessing forward-looking climate risks.