On February 6, the European Securities and Markets Authority (ESMA) published its Strategy on Sustainable Finance (the Strategy). This continues work initiated by the European Commission (the Commission) concerning sustainable finance and the incorporation of environmental, social and governance (ESG) factors into European financial services (for more information, please see the January 10 edition of Corporate & Financial Weekly Digest).
In the Strategy, ESMA outlined the following “key priorities”:
- develop the Sustainable Finance Platform (as mandated by the Commission’s Action Plan on Financing Sustainable Growth), and undertake other work mandated by the Disclosure Regulation and Taxonomy Regulation. This will allow for the incorporation of sustainability factors into ESMA’s technical standards and advice, and ultimately the integration of sustainability factors into the European Banking Authority’s “single rulebook;”
- assist the Commission with the fulfilment of the European Green Deal, in particular by providing advice in relation to “greenwashing;”
- help national competent authorities incorporate ESG factors into local supervisory practices by mapping current requirements, building awareness, and developing tools and advice;
- develop technical advice to require greater transparency regarding ESG factors from credit rating agencies, which are directly supervised by ESMA;
- use regulatory data to monitor ESG-related market developments, with the longer-term goal of developing a comprehensive analytical framework for ESG. This will include a dedicated ESG chapter in ESMA’s 2020 Report on Trends, Risks and Vulnerabilities; and
- generally assist the other institutions of the European Union and international groups such as the International Organization of Securities Commissions (IOSCO) in achieving their sustainable finance goals.
The Strategy is available here.