Sustainable Finance
Legislative and Regulatory Developments
In this section, we bring together various legislative and regulatory initiatives that are relevant to sustainable finance generally. This section represents a collaborative approach between the three practice areas of Asset Management and Investment Funds, Finance and Capital Markets and Financial Services Regulation.
The drive towards sustainable finance permeates through both Asset Management and Investment Funds and Financial Capital Markets practice areas. In commentary from the former practice area you can read further on changes to the regulatory technical standards under the Sustainable Finance Disclosure Regulation ("SFDR") whilst in the latter practice area you can access commentary on further developments to EU Green Bond Standards and on Green Loans.
EU DEVELOPMENTS
EU DRAFT LEGISLATION
Proposed Regulation on ESG Rating Providers
Procedure reference: COM(2023)314 final
Date published: 13 June 2023
On 13 June 2023, the Commission published a proposal for a regulation on the transparency and integrity of ESG rating activities. The Commission noted that the ESG ratings market currently suffers from a lack of transparency and the Commission is aiming to improve the reliability and transparency of ESG ratings activities. New organisational principles and clear rules on the prevention of conflicts of interest will increase the integrity of the operations of ESG rating providers. The proposal will require that ESG rating providers offering services to investors and companies in the EU be authorised and supervised by ESMA. The proposal is intended to ensure the quality and reliability of their services to protect investors and ensure market integrity.
Latest stage: On 14 February 2024, COREPER (Committee of the Permanent Representatives of the Governments of the Member States to the European Union) officially endorsed the provisional agreement on the ESG Rating proposal. The European Parliament's Economic and Monetary Affairs Committee ("ECON") Committee approved the provisional agreement on 22 February 2024. After the approval by the ECON Committee, the text has been sent to the European Parliament to be approved in plenary. The vote is tentatively expected to occur on 22 April 2024.
Proposed Regulation on EU Standards for 'Green Bonds'
See Finance and Capital Markets section.
Proposal for a Corporate Sustainability Due Diligence Directive
See Corporate section.