As the European sustainable finance landscape undergoes rapid transformation, ongoing regulatory developments are playing a crucial role in shaping a greener, more resilient future for both the economy and the environment.
This latest blog explores three recent developments: the EU ‘Omnibus’ regulation, Platform on Sustainable Finance’s briefing note on the categorisation system for sustainable finance products, and the new draft Commission Notice on the interpretation and implementation of certain legal provisions of the EU Taxonomy Environmental Delegated Act, the EU Taxonomy Climate Delegated Act and the EU Taxonomy Disclosures Delegated Act.
President Ursula von der Leyen indicated in Budapest last 8 November 2024 that certain existing and future EU ESG reporting obligations will be consolidated into one “omnibus” regulation.
The purpose of the “omnibus” regulation will be reducing the reporting burden, addressing the existing redundancies and overlaps amongst the various sustainable finance regulations, namely, the Taxonomy Regulation, the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive, without an impact on the content to be disclosed.
You can access the press conference below:
The “omnibus” regulation proposal is in line with the 25% reduction target regarding reporting requirements already mentioned by President von der Leyen in the 2023 State of the Union Address.
In response to the European Commission´s mandate, the Platform has been working on enhancing the effectiveness of the Sustainable Finance Disclosures Regulation as well as seeking high levels of consistency with the rest of the Sustainable Finance Framework.
On 17 December 2024 the Platform on Sustainable Finance published a briefing note for the Commission outlining how a categorisation system for sustainable finance products could be set up and calibrated.
The Platform recommends categorising products with the following sustainability strategies:
All other products should be identified as unclassified products.
The proposed scheme is rooted in the overarching sustainability objective of financial products linking it to client perspective. These categories allow for a differentiation between products that can largely be considered sustainable through their solutions or practices in line with EU classification where it exists (sustainable); foster the transition to a net zero and an overall sustainable economy by 2050 and milestones in line with these EU goals (transition); or that select or exclude sectors or companies based on ESG performance (ESG collection).
You can access the full Briefing Note at https://finance.ec.europa.eu/document/download/8a3d0e56-4453-459b-b826-101b1067290f_en?filename=241217-sustainable-finance-platform-proposal-categorisation-products_en.pdf
The Platform on Sustainable Finance will present the proposal in a webinar on Tuesday 21 January 2025 from 13:00 to 14:00 CET.
On 29 November the European Commission published a new draft Commission Notice on the interpretation and implementation of certain legal provisions of the EU Taxonomy Environmental Delegated Act, the EU Taxonomy Climate Delegated Act and the EU Taxonomy Disclosures Delegated Act.
The FAQs provide technical clarifications regarding various elements of the EU Taxonomy. Among other things, they cover the application of general taxonomy requirements and technical screening criteria for specific activities included in the Climate and Environmental Delegated Acts. They also address the generic “do no significant harm” (DNSH) criteria that ensure that economic activities contributing to one of the environmental objectives set out in the Taxonomy Regulation do not cause significant harm to any of the other environmental objectives. Moreover, the FAQs clarify the reporting obligations for activities covered by the Climate Delegated Act and the Environmental Delegated Act.
The ENGAGE Consortium’s recent webinars explored the nuances of the ENGAGE Templates and the ENGAGE Portal, outlining how they will help lending institutions identify the relevant climate-related data to align their mortgages and home renovation loans with the EU Taxonomy.
Access the webinar content by clicking below.
To achieve the proposed 55% emission reduction climate target by 2030, around EUR 275 billion of additional investments are needed per year.
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