On 18 June 2019, the European Commission announced that, as part of its Sustainable Finance Action Plan, it has published new guidelines for companies on how to report climate-related information alongside an accompanying summary and FAQ document and three new reports by the Technical Expert Group on Sustainable Finance (TEG):
- a final report on the EU taxonomy, which links to the EU's proposed Regulation on the establishment of a framework to facilitate sustainable investment;
- a final report on the EU Green Bond Standard, which recommends the criteria for issuing a green bond; and
- an interim report on climate benchmarks, which sets out the methodology and minimum technical requirements for indices and disclosure requirements related to environmental, social and governance factors by benchmark providers.
The Commission's guidelines are built on the proposals made by the TEG in January 2019 in its first report on disclosure of climate-related information and the Commission's consultation that was launched in response.
The Sustainable Action Plan is available here.
ESMA has established a Coordination Network on Sustainability (CNS) to support the Commission's Sustainable Finance Action Plan in the areas of investment services and investment funds and to foster the coordination of national competent authorities' work on sustainability. The CNS will be responsible for the development of policy in this area with a strategic view on issues related to integrating sustainability considerations into financial regulation.
ESMA's announcement is available here.
The International Capital Market Association (ICMA) has since published a paper which summarises the TEG's report and identifies the key takeaway points for companies. For example, ICMA highlights that the TEG's guidelines on disclosure of environmental and social information aim to reflect the EU's regime on non-financial reporting and encourage companies to make voluntary disclosures in an effective manner.
Full access to ICMA's paper is available here.
The Delegated Regulation, which is substantively the same as ESMA's final draft submitted to the European Commission in September 2018, amends each of the RTSs by extending the exemption period to one unified expiry date of 21 December 2020. The Delegated Regulation entered into force on 29 April 2019 and is directly applicable across the EU.
The Delegated Regulation is available here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.