05 May 2020

ICMA: UPDATE ON THE EU’S SUSTAINABILITY DISCLOSURE REGIME

New and amended EU legislation is introducing significant sustainability and ESG related disclosure requirements that will impact all participants in the European capital markets. This is arguably leading to what we are referring to as an “EU sustainability disclosure regime”.

New and amended EU legislation is introducing significant sustainability and ESG related disclosure requirements that will impact all participants in the European capital markets. This document seeks to give as much as possible a comprehensive and practical overview of these developments. Key points to retain are:
▪ The Disclosure Regulation aims to provide more transparency to end-investors on whether and how the buyside and financial advisers take into account ESG aspects.
▪ The Taxonomy Regulation creates obligations for large firms already subject to the Non-Financial Reporting Directive (NFRD) to disclose against the Taxonomy.
▪ The existing NFRD will most likely be revised after an ongoing consultation to better facilitate disclosures required from asset managers and pension providers under the Disclosure Regulation.
▪ Under the Low Carbon Benchmark Regulation, benchmark providers will have to disclose whether and how they take ESG factors into account.
▪ New ESMA guidelines mean that credit rating agencies have to disclose when considering ESG factors.
For quick reference readers may especially wish to note the EU sustainability disclosures grid provided in Section C.
ICMA will aim to review and update this document in line with future developments.

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