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

    APRA Publishes Results of Climate Risk Self-Assessment Survey

    The Australian Prudential Regulation Authority (APRA) has published the findings of its latest climate risk self-assessment survey conducted across the banking, insurance, and superannuation industries.

    August 04, 2022 WebPage Regulatory News
    News

    ACPR Publishes Updates Related to CRD IV and Covered Bonds

    The French Prudential Supervisory Authority (ACPR) published a notice related to the methods for calculating and publishing prudential ratios under the Capital Requirements Directive (CRD IV) and the minimum requirement for own funds and eligible liabilities (MREL).

    August 03, 2022 WebPage Regulatory News
    News

    BIS Paper Contributes to Debate on Regulating NBFIs and Big Techs

    The Financial Stability Institute (FSI) of the Bank for International Settlements recently published a paper proposing a framework for classifying financial stability regulation as either entity-based or activity-based.

    August 03, 2022 WebPage Regulatory News
    News

    EIOPA Publishes Guidance on Climate Change Scenarios in ORSA

    The European Insurance and Occupational Pension Authority (EIOPA) published the risk dashboard based on Solvency II data and the final version of the application guidance on climate change materiality assessments and climate change scenarios in the Own Risk and Solvency Assessment (ORSA).

    August 02, 2022 WebPage Regulatory News
    News

    EBA and ECB Respond to Proposals on Sustainability Disclosures

    The European Banking Authority (EBA) and the European Central Bank (ECB) published their responses to the consultations of the International Sustainability Standards Board (ISSB) and the European Financial Reporting Advisory Group (EFRAG) on sustainability-related disclosure standards.

    August 01, 2022 WebPage Regulatory News
    News

    BIS Report Notes Existing Gaps in Climate Risk Data at Central Banks

    A Consultative Group on Risk Management (CGRM) at the Bank for International Settlements (BIS) published a report that examines incorporation of climate risks into the international reserve management framework.

    July 29, 2022 WebPage Regulatory News
    News

    EBA Publishes Multiple Regulatory Updates for Regulated Entities

    The European Banking Authority (EBA) published the final guidelines on liquidity requirements exemption for investment firms, updated version of its 5.2 filing rules document for supervisory reporting, and Single Rulebook Question and Answer (Q&A) updates in July 2022.

    July 29, 2022 WebPage Regulatory News
    News

    EIOPA Issues SII Taxonomy and Guide on Sustainability Preferences

    The European Insurance and Occupational Pensions Authority (EIOPA) published Version 2.8.0 of the Solvency II data point model (DPM) and XBRL taxonomy.

    July 29, 2022 WebPage Regulatory News
    News

    EESC Opines on Proposals on CRR and European Single Access Point

    The European Union published, in the Official Journal of the European Union, an opinion from the European Economic and Social Committee (EESC); the opinion is on the proposal for a regulation to amend the Capital Requirements Regulation (CRR).

    July 29, 2022 WebPage Regulatory News
    News

    HM Treasury Publishes Multiple Regulatory Updates in July 2022

    HM Treasury published a draft statutory instrument titled “The Financial Services (Miscellaneous Amendments) (EU Exit) Regulations 2022,” along with the related explanatory memorandum and impact assessment.

    July 29, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8423