ESMA responds to EC's Consultation on Renewed Sustainable Finance Strategy

Jul 17, 2020

On July 15, The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, submitted its response to the European Commission’s (EC) consultation on the renewed sustainable finance strategy. In it, ESMA focused on the following aspects:

  • ESG disclosures: a lack of a standardised disclosure regime for issuers relating to sustainability reporting.
  • ESG ratings: the lack of a legally binding definition and comparability among providers and no legal requirements to ensure transparency of underlying methodologies;
  • ESG benchmarks: the growing need in Europe for methodologically robust and reliable ESG benchmarks which encompass the entire ESG spectrum, including social and governance aspects; 
  • EU green bonds: the establishment of supervision of third-party verifiers of green bond standards at the European level; and
  • Ecolabels for retail sustainable financial products: the effects of eco-labelling of products and whether broadening the scope of ecolabels to a wider range of financial products is necessary.
The Chairs of the European Supervisory Authorities (ESMA, the European Banking Authority and the European Insurance and Occupational Pensions Authority) have submitted a joint letter to the EC highlighting common main messages which are of particular importance for Europe’s strategy in the area of sustainable finance.