ESMA is actively contributing to the development of the sustainable finance rulebook and to its consistent application and supervision by taking the necessary measures to promote investor protection across the EU. ESMA also engages in risk assessment and market monitoring activities focusing on potential financial stability risks stemming from ESG factors.
The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has today published its Sustainable Finance Roadmap 2022-2024 (Roadmap). ESMA identifies three priorities for its sustainable finance work:
- Tackling greenwashing and promoting transparency;
- Building National Competent Authorities’ (NCAs) and ESMA’s capacities in the sustainable finance field; and
- Monitoring, assessing and analysing ESG markets and risks.
Building on ESMA’s 2020 Strategy on Sustainable Finance,
the Roadmap sets out ESMA’s deliverables on sustainable finance and how
they will be implemented over the next three years. The Roadmap will
serve as a practical tool to ensure that ESMA delivers on the wide array
of sustainable finance tasks across several sectors in a coordinated
way.
Verena Ross, Chair, said:
“Advancing the sustainability agenda is crucial for ESMA,
particularly as investor preferences shift to environmentally friendly
financial products and the European Union strives to meet its
commitments on tackling climate change.”
“The Roadmap is a milestone for our sustainable finance work,
identifying the priority work we will do to ensure that ESMA and
national supervisors take ambitious action on priority sustainable
finance issues.”
“I am confident that ESMA’s actions will play a key role in
contributing to the European Green Deal and in protecting European
investors on this journey.”
Roadmap Priorities
The Roadmap sets three priorities for ESMA’s sustainable finance activities in the period from 2022 to 2024:
Tackling greenwashing and promoting transparency:
the combination of growing demand for ESG investments and rapidly
evolving markets creates room for greenwashing. Greenwashing is a
complex and multifaceted issue which takes various forms, has different
causes and has potential to detrimentally impact investors looking to
make sustainable investments. Investigating this issue, defining its
fundamental features and addressing it with coordinated action across
multiple sectors, finding common solutions across the EU, will be key to
safeguarding investors;
Building NCAs’ and ESMA’s capacities: the growing
importance of sustainable finance requires NCAs and ESMA to further
develop skills beyond their traditional areas of focus to understand and
address the supervisory implications of new regulation and of novel
market practices in this area. ESMA will help build its, and NCAs’,
capacity on sustainable finance through a multi-year training programme
and through facilitating the active sharing of supervisory experiences
among NCAs. These efforts will also contribute to creating effective and
consistent supervision in the area of sustainable finance;
Monitoring, assessing and analysing ESG markets and risks:
the objective is to identify emerging trends, risks and vulnerabilities
that can have a high impact on investor protection and on financial
markets stability. ESMA will leverage on its data-analysis capabilities
to support its, and NCAs’, supervisory work and to promote a convergent
approach among NCAs. ESMA will undertake specific activities such as
climate scenario analysis for investment funds, CCP stress testing and
the establishment of common methodologies for climate-related risk
analysis together with other public bodies.
ESMA will address its three priorities with a comprehensive list of actions
across the following sectors: investment management, investment
services, issuers’ disclosure and governance, benchmarks, credit and ESG
ratings, trading and post-trading and financial innovation. Several of
these actions will also contribute to fulfilling the European
Commission’s 2021 Renewed Sustainable Finance Strategy.
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Next steps
ESMA has already embarked on the first Roadmap activities to ensure
it can deliver on its ambitious plans. It will shortly launch a call for
stakeholder candidates to join a new Consultative Working Group
supporting ESMA’s Coordination Network on Sustainability.
ESMA will keep the Roadmap, including the identified priorities and
the sectors of focus, under review during the entire implementation
period of 2022 to 2024. This will ensure that it continues to address
the most significant challenges related to ESMA’s sustainable finance
mandate, as this important field continues to evolve.
ESMA
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