Featured Product

    EC Publishes Report on Activities of Sustainable Finance Platform

    October 16, 2020

    EC published the first annual report of the International Platform on Sustainable Finance (IPSF). The report provides an overview of the work done over the previous year and outlines the crucial role of sustainable finance in the context of the impact of the COVID-19 pandemic. The IPSF work is focused on developing Common Ground Taxonomy, developing standards and labels for sustainable finance products, and improving climate-related disclosure. The report highlights that significant gaps still exist in the quality and comparability of environmental-related information disclosed by companies. Thus, most IPSF members with regulatory regimes are revising them while those with voluntary-based approaches are considering a shift to hard law.

    The report presents an overview of the main characteristics of member jurisdictions' sustainable finance tools in three key focus areas of IPSF: taxonomies, standards and labels, and disclosures. It underlines the main commonalities and divergences in IPSF jurisdictions. Sustainable finance markets have grown massively in volume and in diversity during the last years, but their growth is still far from sufficient to achieve the targets. The report notes that the policy tools on which the IPSF work focuses have the capacity to be very efficient to further scale up sustainable finance:

    • The development of green taxonomies within the IPSF membership is nascent, but uptake potential is promising. Many IPSF jurisdictions are considering developing a taxonomy and the potential for comparability in this area is significant. IPSF initiated a working group on taxonomies that will work toward a “Common Ground Taxonomy,” highlighting the commonalities between existing taxonomies. This Common Ground Taxonomy will enhance transparency about what is commonly green in member jurisdictions and contribute to scale up cross-border green investments significantly.
    • More and more jurisdictions are developing standards and labels for sustainable financial products, with regulations and guidelines, to provide transparency and clarity and address the risk of greenwashing. IPSF will keep monitoring market developments regarding standards and labels and could envisage the creation of a dedicated working group in the near future.
    • In recent years, environmental-related disclosure has improved considerably and a majority of IPSF members have already set mandatory regulatory requirements. Nonetheless, there are still significant gaps notably in the quality and comparability of information disclosed to meet the needs of investors. In this light, most IPSF members with regulatory regimes are revising them while those with voluntary-based approaches are considering a shift to hard law. To ensure that these developments are coordinated and coherent, IPSF is about to launch a working group on corporate environmental-related disclosure. This working group will facilitate the exchange of views and information on national and international policy and regulatory developments regarding environmental-related reporting and will support further alignment of disclosure requirements across IPSF member jurisdictions.

    The analysis of this report constitutes the basis for further in-depth work within the IPSF to facilitate comparability and convergence in approaches, in particular the creation of two working groups on taxonomies and disclosure and possibly, in the future on standards and labels. While green financial markets are growing, more work needs to be done to meet environmental objectives, especially to facilitate green recovery following the pandemic. To this end, IPSF created a working group on taxonomies, co-led by the EU and China, to help enhance transparency for investors and facilitate cross-border green investments. The report points out that continued efforts will ensure that jurisdictions continue to develop regulatory tools to better harness the resources of the financial system in the transition to a sustainable future.

     

    Related Links

    Keywords: Europe, EU, Banking, Insurance, Securities, Sustainable Finance, Climate Change Risk, ESG, Annual Report, COVID-19, Disclosures, Reporting, Taxonomy, IPSF, EC

    Featured Experts
    Related Articles
    News

    US Agencies Issue Several Regulatory and Reporting Updates

    The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.

    January 04, 2023 WebPage Regulatory News
    News

    ECB Issues Multiple Reports and Regulatory Updates for Banks

    The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.

    January 01, 2023 WebPage Regulatory News
    News

    HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements

    The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.

    December 30, 2022 WebPage Regulatory News
    News

    EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR

    The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.

    December 29, 2022 WebPage Regulatory News
    News

    CBIRC Revises Measures on Corporate Governance Supervision

    The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.

    December 29, 2022 WebPage Regulatory News
    News

    HKMA Publications Address Sustainability Issues in Financial Sector

    The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.

    December 23, 2022 WebPage Regulatory News
    News

    EBA Updates Address Basel and NPL Requirements for Banks

    The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.

    December 22, 2022 WebPage Regulatory News
    News

    ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite

    The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.

    December 22, 2022 WebPage Regulatory News
    News

    FCA Sets up ESG Committee, Imposes Penalties, and Issues Other Updates

    The Financial Conduct Authority (FCA) is seeking comments, until December 21, 2022, on the draft guidance for firms to support existing mortgage borrowers.

    December 20, 2022 WebPage Regulatory News
    News

    FSB Reports Assess NBFI Sector and Progress on LIBOR Transition

    The Financial Stability Board (FSB) published a report that assesses progress on the transition from the Interbank Offered Rates, or IBORs, to overnight risk-free rates as well as a report that assesses global trends in the non-bank financial intermediation (NBFI) sector.

    December 20, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8697