The FAQs aim to clarify key aspects of the CSRD, including the scope of the rules, compliance dates, and exemptions.
By Paul A. Davies, Axel Schiemann, Michael D. Green, James Bee, and Lasse Winzer
On 7 August 2024, the European Commission (Commission) published a set of frequently asked questions (FAQs) on the interpretation of certain provisions of the EU Corporate Sustainability Reporting Directive (CSRD). The FAQs aim to facilitate compliance and ensure the usability and comparability
The ESAs urge the European Commission to consider a labelling rather than a disclosure regime to help consumers understand the sustainability goals of financial products.
By Nicola Higgs, Jaime Martin, Sara Sayma, and Charlotte Collins
On 18 June 2024, the European Supervisory Authorities — the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA), and the European Securities and Markets Authority (ESMA), collectively the ESAs — published a joint opinion on the Sustainable Finance
The European Parliament and the Council of the EU have made some significant changes to the European Commission’s proposal.
On 5 February 2024, the European Parliament and Council of the EU announced that they had reached a provisional political agreement on the text of the ESG Ratings Regulation (the Regulation). The agreed text was subsequently published on 14 February 2024. The Regulation was initially proposed by the Commission in June 2023, and seeks to introduce a new regulatory regime for ESG ratings providers “operating in the Union”. Refer to this Latham blog post for previous commentary on the proposal.
The proposal would substantially reduce the number of benchmarks in scope of the EU BMR.
By Nicola Higgs, Becky Critchley, Ella McGinn, and Charlotte Collins
On 17 October 2023, the European Commission published a legislative proposal that would significantly alter the benchmarks in scope of the EU Benchmarks Regulation (BMR). The proposal aims to address long-standing criticisms of the BMR’s wide-reaching scope and practical impact, and would enable EU regulators to focus only on the most economically and socially important benchmarks.
The EU regulators are reviewing the Sustainable Finance Disclosure Regulation introduced in 2021, exploring the need for potential additional adjustments.
By Paul A. Davies, Nicola Higgs, Michael D. Green, James Bee, and Anne Mainwaring
On 14 September 2023, the European Commission initiated a consultation on its sustainable financial disclosure practices, seeking feedback on Regulation (EU) 2019/2088 — the Sustainable Finance Disclosure Regulation (SFDR). The consultation surveys stakeholders’ experiences during the implementation of the SFDR and, in particular, solicits feedback on its interactions with the broader EU sustainable finance framework.
An evolving landscape of reforms in the ESG ratings sector continues to pose challenges to providers of ratings and scores.
By Paul A. Davies, Nicola Higgs, Rob Moulton, Michael D. Green, Becky Critchley, Anne Mainwaring, and Charlotte Collins
International momentum to regulate ESG ratings continues as the European Commission released a consultation on 13 June 2023 to create a new regulatory regime for ESG ratings providers. This consultation follows a Call for Evidence that the European Securities and Markets Authority (ESMA) issued on 4 April 2022.
As the “most ambitious legislative proposal since the inception of EU financial regulation”, the changes would make significant amendments to MiFID II and PRIIPs.
By Rob Moulton, Nicola Higgs, Becky Critchley, Gary Whitehead, and Charlotte Collins
On 24 May 2023, the European Commission (Commission) published a package of proposals to strengthen protections for retail investors within the European Union (EU) and place “consumers’ interests at the centre of retail investing”. The proposals significantly amend the protections afforded to retail clients under MiFID II, and also impact the institutional markets, as discussed below.
Following this spring’s shocks to the banking system, US, UK, and European regulators are considering whether existing regulatory and crisis management measures require reform and enhancement.
By David Berman, Nicola Higgs, Markus E. Krüger, Arthur S. Long, Rob Moulton, Axel Schiemann, Pia Naib, Ja Hyeon Park, Deric Behar, and Charlotte Collins
The spring of 2023 saw more dislocation in the global financial sector than any time since the 2008-09 financial crisis.
The Commission has clarified requirements for financial product classifications and the definition of “sustainable investment” under the SFDR.
By Paul A. Davies, Nicola Higgs, Michael D. Green, Anne Mainwaring, and James Bee
In April 2023, the European Commission (Commission) published a series of answers to questions that the European Supervisory Agencies (ESAs) had raised in September 2022 on the legal interpretation of certain aspects of the Sustainable Finance Disclosure Regulation (SFDR). The answers seek to clarify outstanding questions from stakeholders, including in relation to the definition of “sustainable investment” under the SFDR. Previous uncertainty with respect to this definition contributed to considerable market movement in the form of product re-classifications in the latter half of 2022.
The Commission is also consulting on proposed targeted amendments to the Taxonomy Climate Delegated Act and on the Taxonomy Disclosures Delegated Act.
By Paul A. Davies, Michael D. Green, and James Bee
On 5 April 2023 the European Commission opened a consultation on its proposal for four additional environmental objectives under the EU Taxonomy Regulation[1] (the Taxonomy), including: (i) sustainable use and protection of water and marine resources; (ii) transition to a circular economy; (iii) pollution prevention and control; and (iv) protection and restoration of biodiversity and ecosystems.
The Commission is seeking feedback on technical screening criteria (TSC) for economic activities that may substantially contribute to one or more of those four environmental objectives. The TSC do not only identify the technical requirements that an activity must meet to be considered to make a substantial contribution to one of these areas, they also specify the conditions by which the activities can be considered to not do any significant harm to the remaining areas.
The Commission has already adopted TSC related to the economic activities of two other environmental objectives: climate change mitigation and climate change adaptation.
The Commission is also proposing amendments to the Taxonomy Climate Delegated Act, introducing additional activities that may be considered to substantially contribute to climate change mitigation or climate change adaptation, as well as the Taxonomy Disclosures Delegated Act.