Annexes to COM(2023)317 - Sustainable finance framework that works on the ground - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2023)317 - Sustainable finance framework that works on the ground. |
|---|---|
| document | COM(2023)317 |
| date | June 13, 2023 |
8 Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022 amending Regulation (EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU, as regards corporate sustainability reporting, OJ L 322, 16.12.2022.
9 Commission Delegated Directive amending Directive 2010/43/EU as regards the sustainability risks and sustainability factors to be taken into account for Undertakings for Collective Investment in Transferable Securities (UCITS); Commission Delegated Regulation amending Delegated Regulation (EU) No 231/2013 as regards the sustainability risks and sustainability factors to be taken into account by Alternative Investment Fund Managers; Commission Delegated Regulation amending Delegated Regulations (EU) 2017/2358 and (EU) 2017/2359 as regards the integration of sustainability factors, risks and preferences into the product oversight and governance requirements for insurance undertakings and insurance distributors and into the rules on conduct of business and investment advice for insurance-based investment products; Commission Delegated Directive amending Delegated Directive (EU) 2017/593 as regards the integration of sustainability factors into the product governance obligations; Commission Delegated Regulation amending Delegated Regulation (EU) 2015/35 as regards the integration of sustainability risks in the governance of insurance and reinsurance undertakings; Commission Delegated Regulation amending Delegated Regulation (EU) 2017/565 as regards the integration of sustainability factors, risks and preferences into certain organisational requirements and operating conditions for investment firms;
10 Proposal for a regulation of the European Parliament and of the Council amending Regulation (EU) No 575/2013 as regards requirements for credit risk, credit valuation adjustment risk, operational risk, market risk and the output floor (COM/2021/664 final) and Proposal for a Directive of the European Parliament and of the Council amending Directive 2013/36/EU as regards supervisory powers, sanctions, third-country branches, and environmental, social and governance risks, and amending Directive 2014/59/EU (COM/2021/663 final).
11 Proposal for a directive of the European Parliament and of the Council amending Directive 2009/138/EC as regards proportionality, quality of supervision, reporting, long-term guarantee measures, macro-prudential tools, sustainability risks, group and cross-border supervision (COM/2021/581 final).
12 Commission Delegated Regulation (EU) 2023/3851 supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council by establishing the technical screening criteria for determining the conditions under which an economic activity qualifies as contributing substantially to the sustainable use and protection of water and marine resources, to the transition to a circular economy, to pollution prevention and control, or to the protection and restoration of biodiversity and ecosystems and for determining whether that economic activity causes no significant harm to any of the other environmental objectives and amending Delegated Regulation (EU) 2021/2178 as regards specific public disclosures for those economic activities; Commission Delegated Regulation (EU) 2023/3850 amending Delegated Regulation (EU) 2021/2139 establishing additional technical screening criteria for determining the conditions under which certain economic activities qualify as contributing substantially to climate change mitigation or climate change adaptation and for determining whether those activities cause no significant harm to any of the other environmental objectives;
13 The six environmental objectives under the EU Taxonomy are: (i) climate change mitigation; (ii) climate change adaptation; (iii) sustainable protection and restoration of water and marine resources; (iv) the transition to a circular economy; (v) pollution prevention and control; and (vi) the protection and restoration of biodiversity and ecosystems;
14 Proposal for a regulation on the transparency and integrity of Environmental, Social and Governance (ESG) rating activities, (COM(2023) 314 final).
15 Commission Recommendation on facilitating finance for the transition to a sustainable economy (C(2023) 3844).
16 Staff working document on ’Enhancing the usability usability of the EU Taxonomy and the overall EU sustainable finance framework (SWD(2023) 209), accompanying the Communication from the Commission on a sustainable finance framework that works on the ground (COM(2023) 317).
17 The foundations for an EU sustainable finance framework are outlined in the Action Plan on Financing Sustainable Growth (COM/2018/097 final) and the Strategy for Financing the Transition to a Sustainable Economy (COM/2021/390 final).
18 Proposal for a Regulation of the European Parliament and the Council establishing a European single access point providing centralised access to publicly available information of relevance to financial services, capital markets and sustainability, COM/2021/723 final. Political agreement reached by co-legislators on 23 May 2023.
19 As of 17 May 2023, 63% of the STOXX Europe 600 undertakings have already disclosed their taxonomy eligibility and alignment for financial year 2022; source: Bloomberg.
20 Nearly two in three companies that disclosed taxonomy-eligible capital expenditure reported a non-zero alignment figure and one in two companies that disclosed eligible revenue reported a non-zero degree of aligned revenue; Source: Bloomberg.
21 Technical Support Instrument under Regulation (EU) 2021/240 of the European Parliament and of the Council of 10 February 2021 establishing a Technical Support Instrument, (OJ L 57, 18.2.2021).
22 The Commission Notice C(2023) 3719 on the interpretation and implementation of certain legal provisions of the EU Taxonomy Regulation and its link to the Sustainable Finance Disclosure Regulation (SFDR) clarifies that investments in taxonomy-aligned ‘environmentally sustainable’ economic can be automatically qualified as ‘sustainable investments’ under the SFDR.
23 The Commission adopted a set of Q&As on 5 April 2023 to clarify that the SFDR deems products passively tracking Climate Transition Benchmarks and Paris-aligned Benchmarks to have ‘sustainable investments’, as defined in the SFDR, as their objective.
24 Transitional activities are defined in Article 10(2) of the Taxonomy Regulation as an activity for which there is no technologically and economically feasible low-carbon alternative where it supports the transition to a climate-neutral economy consistent with a pathway to limit the temperature increase to 1,5°C above pre-industrial levels, including by phasing out greenhouse gas emissions, in particular emissions from solid fossil fuels, and where that activity: has greenhouse gas emission levels that correspond to the best performance in the sector or industry; does not hamper the development and deployment of low-carbon alternatives; and does not lead to a lock-in of carbon-intensive assets, considering the economic lifetime of those assets.
25 The taxonomy covers six environmental objectives: climate change mitigation; climate change adaptation; the sustainable use and protection of water and marine resources; the transition to a circular economy; pollution prevention and control; the protection and restoration of biodiversity and ecosystems.
26 See footnote 24.
27 Data based on taxonomy-alignment reporting of 455 companies up to 16 May 2023; source: GS SUSTAIN Goldman Sachs Global Investment Research.
28 Source: Global Climate Action Portal, United Nations Framework Convention on Climate Change.
29 Based on NACE Rev. 2 codes included in the Taxonomy Climate Delegated Act and data from Eurostat 2021, https://ec.europa.eu/eurostat/databrowser/view/env_ac_ainah_r2/default/table?lang=en.
30 The delegated act also makes targeted amendments and clerical corrections to selected existing climate criteria.
31 Communication from the Commission to the European Parliament, the European Council, the Council, the European Economic and Social Committee and the Committee of Regions, A Green Deal Industrial Plan for the Net-Zero Age, COM(2023) 62 final.
32 See https://finance.ec.europa.eu/system/files/2022-03/220330-sustainable-finance-platform-finance-report-remaining-environmental-objectives-taxonomy-annex_en.pdf and https://finance.ec.europa.eu/system/files/2022-11/221128-sustainable-finance-platform-technical-working-group_en.pdf. The Platform’s reports inform the work of the Commission, but they are of an advisory nature. They do not bind the Commission on the inclusion of specific sectors and activities in the EU Taxonomy.
33 Stakeholders will also have an opportunity to notify the Platform on Sustainable Finance about activities they believe should be covered in the EU Taxonomy.
34 The proposal does not cover ESG data providers. The evidence for regulatory intervention in this area was less convincing and a number of other initiatives, such as the CSRD or the European Single Access Point (ESAP), should contribute to improving the quality and availability of sustainability data. This initiative also does not cover internal ratings developed by financial institutions such as banks or asset managers as they are used for investment decisions concerning their own products, risk fewer potential conflicts of interests and do not serve the same purpose as ESG ratings, which are marketed at institutional investors and companies.
35 The Commission is conducting a study to assess the current state of play of the social dimension of ESG investing in the EU, focusing on investment gaps, challenges faced by market participants and market practices. The study will explore ways to strengthen the social investment framework in capital markets, identifying obstacles and possible policy options for future action.
36 Regulation (EC) No 1060/2009 of the European Parliament and of the Council of 16 September 2009 on credit rating agencies (OJ L 302, 17.11.2009, p. 1).
37 Commission Delegated Regulation (EU) No 447/2012 of 21 March 2012 supplementing Regulation (EC) No 1060/2009 of the European Parliament and of the Council on credit rating agencies.
38 In this regard, the obligation to report sustainability information for listed SMEs begins to apply only from the 2026 financial year onward. The Directive provides a further two-year opt-out, meaning that listed SMEs do not have to report sustainability information until the 2028 financial year.
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