13 March 2018
Regulatory news alert
Commission’s action plan for sustainable finance
On 8 March 2018, the European Commission published its action plan for a greener and cleaner economy. It sets out a roadmap for further work combining legislative and non-legislative actions for the financial sector to support the transition to the low-carbon economy.
The proposed action plan from the European Commission includes a series of upcoming key actions covering the financial system such as:
- The establishment of an EU sustainability taxonomy, harmonizing the language for sustainable finance across the European Union.
- The creation of standards and labels for green financial products.
- The clarification of institutional investors and asset managers’ duties to make sure that they appropriately consider environmental, social, and governance issues in their investment decision process.
- The incorporation of sustainability in prudential requirements.
- Strengthening sustainability disclosure and improving accounting rule-making.
The action plan also includes a timetable for all actions that will be introduced by Q2 2019, such as:
- In Q2 2018, the Commission will amend Markets in Financial Instruments Directive (MIFID II) and the Insurance Distribution Directive (IDD) delegated acts to enhance sustainability in suitability assessment.
- In Q2 2019, the Commission will publish its fitness check of EU legislations on public corporate reporting and amend its non-binding guidelines on non-financial reporting. The Commission will also adopt a delegated act on the content of the prospectus for green bond issuances and publish a comprehensive study on sustainability ratings and research.
- The Commission will create EU Ecolabels for financial products and explore possible measures to incorporate climate and environmental risks into prudential requirements in line with the EU taxonomy.
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