The package focuses on material sustainability reporting and disclosure obligations, as the EU looks to direct capital toward sustainable activities.
By Paul A. Davies, Nicola Higgs, David Little, and Michael Green
On 21 April 2021, one day prior to Earth Day and a US-led global climate summit, the European Commission adopted a much-anticipated package of measures as part of its policy to help direct capital towards sustainable initiatives and to help the European Union reduce its greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels and reach its 2050 carbon neutrality goal.
The package of measures include:
- A proposed Corporate Sustainability Reporting Directive (CSRD), which would amend the existing reporting requirements under the Non-Financial Reporting Directive (NFRD) and seek to ensure that companies provide consistent and comparable sustainability information
- The EU Taxonomy Climate Delegated Act, which aims to identify the economic activities that best contribute to climate change mitigation and adaptation
- Six Delegated Acts on fiduciary duties, investment, and insurance advice, which aim to ensure that financial firms (e.g., advisers, asset managers, or insurers) include sustainability in their procedures and investment advice to clients
On 21 March 2021, the People’s Bank of China (PBC) announced that China is working with the European Union to adopt a common green taxonomy across the two markets later this year. PBC Governor Yi Gang, speaking at the China Development Forum, said strengthening the nation’s green finance system was the central bank’s priority for the next five years.
On 7 December 2020, the European Commission (EC or the Commission) launched a public consultation (the Consultation) on the new EU Strategic Framework on Health and Safety at Work for 2021-2027 (the Framework). The Consultation follows a Roadmap adopted by the EC in October 2020 and builds on the feedback received following the Roadmap’s consultation and regarding occupational safety and health (OSH) factors.
On 8 November 2019, the Council of the EU published a press release announcing the adoption of legislative reforms that aim to enhance the proposed capital markets union. Notably, two of the reforms are related to sustainable finance: the Low Carbon Benchmark Regulation (LCBR), and the Disclosure Regulation, the
On 30 September 2019, the EU Technical Expert Group on Sustainable Finance (TEG) published its final report on climate benchmarks and environmental, social, and governance (ESG) disclosures (the Report), as well as a summary of the Report. The Report makes recommendations regarding the minimum technical requirements for the methodology that pertains to two new climate benchmarks. The Report also makes recommendations for suggested ESG disclosures on a wide range of benchmarks. This post will examine the TEG recommendations and their implications for the future of these climate benchmarks.
The European General Court has agreed to hear a legal challenge to EU climate legislation for inadequate targets for reducing climate change. Ten families from around the world brought a petition claiming that EU legislation offered insufficient protection, posing a threat to their human rights. The European Parliament (EP) and European Union Council (Council) likely will respond to the petition within approximately eight weeks.
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