Status on the EU sustainable finance framework
Published 19 October 2023
Category: Impact and ESG
In June 2023 the European Commission published and adopted a sustainable finance package with measures to expand and strengthen the EU sustainable finance framework. This update provides a closer overview of those measures which are now subject to scrutiny by the European Parliament and the Council.
Taxonomy Environmental Delegated Act
One of the measures adopted by the European Commission is the Taxonomy Environmental Delegated Act (“Environmental Delegated Act”). The Environmental Delegated Act together with Annex I-IV establishes technical screening criteria for economic activities substantially contributing to one of the remaining four environmental objectives in the Taxonomy Regulation:
- (i) sustainable use and protection of water and marine resources (see Annex I)
- (ii) transition to a circular economy (see Annex II)
- (iii) pollution prevention and control (see Annex III)
- (iv) protection and restoration of biodiversity and ecosystems (see Annex IV)
The Environmental Delegated Act includes sectors and economic activities deemed having the greatest potential to substantially contribute to the environmental objectives and for which the technical screening criteria could be developed without delay. However, for activities and sectors such as forestry, fishing, and agriculture further assessment of criteria is needed.
The adopted Environmental Delegated Act can be found here.
Amendments of Taxonomy Disclosures Delegated Act
Further, amendments to the Taxonomy Disclosures Delegated Act (“Disclosures Delegated Act”) regarding specific public disclosures have been set forward and adopted by the European Commission. The amendments cover both technical corrections as well as amendments to ensure consistency between its disclosure requirements and the Environmental Delegated Act.
The text amending the Disclosures Delegated Act can be found here and shall be seen in accordance with:
- amendments to Annex I, II, III, IV, V, VI, VIII and X of the Disclosures Delegated Act (see Annex V)
- revised Annex VI of the Disclosures Delegated Act (see Annex VI)
- revised Annex VIII of the Disclosures Delegated Act (see Annex VII)
Amendments of Taxonomy Climate Delegated Act
The European Commission has also adopted amendments to the existing Taxonomy Climate Delegated Act (“Climate Delegated Act”) and Annex I and II covering technical screening criteria for economic activities contributing to the first two environmental objectives in the Taxonomy Regulation:
The Climate Delegated Act is amended by establishing additional technical screening criteria for economic activities not included earlier. Those economic activities mainly cover transitional activities within the transport sector where zero-carbon solutions are still awaiting and manufacturing activities for key components for electrical equipment and low carbon transport making it possible to achieve greenhouse gas emissions savings in other activities. Further, few amendments have been made to improve some of the already existing technical screening criteria.
The adopted text amending the Climate Delegated Act can be accessed here.
Next steps: The Delegated Acts and amendments are now subject to a four-month scrutiny period by the European Parliament and the Council which may be extended with two months if requested. If the Delegated Acts and amendments are accepted, they are expected to apply from January 2024. We continue to monitor this process closely and prepare for the potential expansion of the technical screening criteria.
Also tagged ‘Regulatory Technical Standards’
Final Report with amendments for RTS
The European Supervisory Authorities (EBA, EIOPA and ESMA) (together ESAs), published a Final Report with proposed amendments to the Commission Delegated Regulation (EU) 2022/1288 and the Regulatory Technical Standards (RTS) in December 2023.
Disclosure RequirementsESMARegulatory Technical StandardsSustainabilityChanges to the SFDR RTS proposed by ESA Final Report
The European Supervisory Authorities (EBA, EIOPA and ESMA) (together ESAs), published a Final Report with proposed amendments to the SFDR Delegated Regulation (Regulation (EU) 2022/1288) and the SFDR Regulatory Technical Standards (RTS) in December 2023.
Disclosure RequirementsESMARegulatory Technical StandardsSustainabilityELTIF 2.0 in force
Today, 10 January 2024, the transition period for the regulation of 15 March 2023 amending the Regulation for Long-Term Investment Funds (ELTIFs), also known as ELTIF 2.0, has ended. Thus, ELTIF 2.0 has now completely entered into force.
ESMARegulatory Technical StandardsRetail InvestorsConsultations on the implementation of SFDR
On 14 September 2023, the European Commission initiated two consultations on the implementation of SFDR. The consultations focus on, among others, the regulation’s useability and role in combatting greenwashing.
Disclosure RequirementsRegulatory Technical StandardsSustainabilityConsultation on the ESAs review of SFDR
The European Supervisory Authorities (EBA, EIOPA and ESMA) have earlier this month published a consultation paper in which they propose amendments to the Commission Delegated Regulation.
Disclosure RequirementsESMARegulatory Technical StandardsSustainabilityESMA Submits Report on Sustainability Risks and Factors in the AIFMD and UCITS Directive
On 30 April 2019, the European Securities and Markets Authority (ESMA) published its final report on integrating sustainability risks and factors relating to environmental, social and good governance considerations in the AIFMD and UCITS Directive.
AIFMDESMAGovernanceRegulatory Technical StandardsRisk ManagementSustainabilityESMA Consults on Regulatory Technical Standards Under the ELTIF Regulation
On 28 March 2019, the European Securities and Markets Authority (ESMA) issued a Consultation Paper on draft Regulatory Technical Standards (RTS) under article 25 of the ELTIF Regulation.
ESMAKID / PRIIPSManagement RemunerationRegulatory Technical StandardsOther updates
Final approval by the EU Parliament of the Corporate Sustainability Due Diligence Directive
Today, 24 April 2024, the Corporate Sustainability Due Diligence Directive (“CSDDD”) received the final green light from the European Parliament.
SustainabilityAIFMD 2.0 published in the OJEU
On 26 March 2024, directive 2024/927 amending the directives 2011/61/EU (AIFMD) and 2009/65/EC (UCITSD), also known as AIFMD 2.0, has been published in the EU Official Journal.
AIFMDRisk ManagementNews regarding the Corporate Sustainability Due Diligence Directive
15 March 2024, the Committee of the Permanent Representatives of the Governments of the Member States to the European Union (“COREPER”) endorsed the Corporate Sustainability Due Diligence Directive (“CSDDD”) taking the directive one important step closer to finalizing the legislative process.
SustainabilityESG KPI report 2024 by Invest Europe
Invest Europe has published an ESG KPI report covering data from 2022. Compared to their first edition published last year (covering data from 2021), which we touched upon in our previous Pulse update, there has been a 60% increase in the number of firms covered by the survey.
SustainabilityExposure Drafts on sustainability reporting standards for SMEs
The European Financial Reporting Advisory Group (“EFRAG”) has launched a public consultation on the Exposure Draft European Sustainability Reporting Standards for listed SMEs (“ESRS LSME ED”) and the Exposure Draft for the voluntary reporting standard for non-listed SMEs (“VSME ED”).
SustainabilityDraft guidelines on Enforcement of Sustainability Information out for consultation
The European Securities and Markets Authority (“ESMA”) has sent draft Guidelines on Enforcement of Sustainability Information (“Guidelines”) out for consultation.
ESMASustainability