1)   ESRS (European Sustainability Reporting Standards) are standards developed by EFRAG under the CSRD that will require in-scope companies to disclose all material information about their sustainability-linked impacts, risks and opportunities.  

The materiality assessment allows a company not to report on a topic if it explains and proves that it is not material. This feature, called ‘rebuttable presumption’, has been highly criticised in feedback to EFRAG

EFRAG will have to deliver its 1st set of draft ESRS to the European Commission in November 2022, so it has 2 more months to address this issue.

[Source: ‘Rebuttable presumptions rebutted in comment letters to EFRAG’ – Corporate Disclosures]

2)   Various actors including the European Central Bank have called for an alignment of EU, ISSB and US regulations. The aim is to simplify the application of these new requirements by companies and to increase the comparability of the reports produced, even if the EU has to postpone some of its deadlines.

[Source: ‘EU urged to align corporate climate reporting rules with global standards’ – Euractiv]

3)    Stakeholders have until today to provide feedback on the draft report that the PSF (Platform on Sustainable Finance) has prepared on the minimum safeguards of the EU Taxonomy. These safeguards are based on the OECD guidelines for Multinational Enterprises, the UN Guiding Principles on Business and Human Rights and the International Bill for Human Rights.

The PSF’s proposal is that alignment with the MS should both involve the company implementing due diligence procedures but also ensuring that there are no breaches against the core principles (related to human rights, bribery, taxation and fair compensation).

[Source: ‘Social Safeguards “Critical” to EU Taxonomy’ – ESG Investor]

4)   “A Legal Framework for Impact” was published last year by Freshfields Bruckhaus Deringer, which is a law firm. The framework is intended to guide institutional investors on their legal obligations and freedoms to pursue sustainability goals while investing. An update has recently been released for the following 5 jurisdictions: EU, Canada, Australia, Japan and the UK.

[Source: ‘Calling for a legal framework for impact: one year on’ – UNEP FI]

5)   A study conducted by Morningstar showed that a quarter of SFDR-Article 8 funds do not comply with all the principles inherent in this status. The objective of the SFDR, which is to define different types of funds from the least sustainable to the most sustainable, is therefore hampered by these misclassifications.

And yet, Article 8 is quite soft as Article 9 funds are subject to much more stringent requirements than Article 8 ones.

[Source: ‘Morningstar: Quarter of SFDR Article 8 funds do not meet ESG criteria’ – ETF Stream]

#sustainablefinance #climatefinance #climatechange #greenfinance #sustainableregulations #EU #ESRS #CSRD #EFRAG #ISSB #SFDR #ESG #UNEPFI #EUTaxonomy #PSF

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