ESMA Commits to Stronger ESG Regulation
Earlier this month the European Securities and Markets Authority (ESMA) published its Strategy on Sustainable Finance. The strategy sets out how ESMA will place sustainability at the core of its activities by embedding Environmental, Social, and Governance (ESG) considerations into its work.
Amongst other measures, ESMA plans to integrate sustainability in the development of a ‘single set of standards, transparency obligations and enhancement of due diligence processes on financial markets participants in relation to ESG.’
A key priority of 2020 will be the completion of a regulatory framework for disclosure requirements on sustainability-related disclosures in the financial services sector. Technical standards and an EU taxonomy for sustainable finance will be developed.
“Key pillars supporting the shift towards a more sustainable financial system are the measurement, verification and disclosure of ESG factors. It is important that public authorities step in and establish robust ESG standards and supervise the relevant actors and products to prevent the risk of greenwashing;” said Steven Maijoor, Chair of ESMA, in a keynote address on sustainable finance issues at the European Financial Forum in Dublin this week.
With investor demand for ESG information growing, we support further standardisation of ESG-related disclosure requirements. To ensure proper transparency and comparability of ESG information, internationally coordinated standards for reporting in structured Inline XBRL need to be developed and implemented.
Read more and access the strategy document here.