Sustainable finance is the application of the concept of sustainable development to financial activity. Therefore, sustainable finance aims to create value in the long term by directing capital towards activities that, in addition to generating economic surplus value, are also useful to society and not borne by the environmental system.
In March 2018, the European Commission published a "Sustainable Finance Action Plan", outlining the strategy and measures to be taken to establish a financial system capable of promoting development that is genuinely sustainable from an economic, social and environmental point of view, by contributing to the implementation of the Paris Agreement on climate change and the United Nations 2030 Agenda for Sustainable Development.
In implementing this Action Plan, the European Commission has proposed an EU sustainable finance strategy with a roadmap outlining future work and initiatives involving all the stakeholders in the financial system. In particular, on 24 May 2018, the European Commission adopted a set of legislative proposals. The package contains: a proposal for a regulation introducing new disclosure requirements for intermediaries on how "sustainability factors" are integrated into investment decisions and advice; a proposal for a regulation to classify eco-sustainable activities, i.e. a shared system for the classification and certification of products and services considered sustainable and capable of reducing the risk of unfair practices (green washing); a proposal to amend Regulation (EU) 2016/1011 introducing two new benchmarks taking into account certain aspects of environmental sustainability; draft amendments to delegated acts adopted for the implementation of MiFID II (Directive 2014/65/EU) and IDD (Directive (EU) 2016/97), which require intermediaries to compulsorily take account of customer preferences for ESG factors in the provision of investment services and the distribution of IBIPs, including in relation to the suitability assessment.
Negotiations were concluded with regard to the regulation on sustainability reporting in the financial services sector and to the regulation on benchmarks, which were published in the Official Journal of the European Union on 9 December 2019.
The EU Regulation 2020/852 of the Parliament and of the Council of 18 June 2020 on the establishment of a framework favorable to sustainable investments (the so-called Taxonomy Regulation) was also approved. The procedure for defining the delegated acts of the EU Commission is underway. The proposal for a regulation containing targeted and timely amendments to the delegated regulations implementing MIFID II and IDD for the integration of ESG factors in the area of customer disclosure and suitability assessment is awaiting publication in the Official Journal of the European Union.
At the same time, in addition to the measures described above, the European Commission deemed it appropriate to incorporate the reference to ESG risks and sustainability factors in the processes and decisions of operators subject to UCITS, AIFMD, MiFID II, IDD and Solvency II. In this regard, on 30 April 2019, the ESMA published two pieces of technical advice, one on integrating sustainable finance into the MiFID II framework on investment services, the other on the UCITS and AIFM frameworks, which are necessary to amend the relevant delegated acts.
Furthermore, with reference to "short-termism" and in the context of Action no. 10 of the 2018 Action Plan, the European Commission announced, with an inception impact assessment published on 30 July 2020, its intention to propose at the beginning of 2021 a regulatory intervention on the duties of directors. A public consultation on the subject is currently underway.
The Directive on non-financial information is also under review: a public consultation was held on the subject, which will be followed by the adoption of a legislative proposal.
Finally, on 11 December 2019 the European Commission adopted the European Green Deal, a "strategy" consisting of a series of measures - including in particular new legislation and investments - to make energy production and the way of life of European citizens more sustainable and less harmful to the environment. As a follow-up to this intervention, the Commission concluded on 15 July 2020 a public consultation on a document on the Renewed European strategy on sustainable finance.
2. Consob documentation
- Consob warning notice of March 4, 2021 - Sustainability‐related disclosures in the financial services sector [English version will be available in the next days]
- Consob Q&A of March 4, 2021 - Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability‐related disclosures in the financial services sector [English version will be available in the next days]
- Press release of 1st March 2021 - Consob supports FSB Task Force recommendations on communication of financial information on climate change
- Webinar: Voluntary non-financial reporting regime - The call for evidence on the state of implementation of the discipline and on the prospects for reform (Speech by Prof. Avv. Anna Genovese - 26 October 2020) [only in Italian version]
- Webinar: Voluntary non-financial reporting regime - The call for evidence on the state of implementation of the discipline and on the prospects for reform (Speech by Dr. Nadia Linciano: 26 October 2020) [only in Italian version]
- Non-financial information as a driver of transformation. Evidence from Italy (2019)
- Non-financial information as a driver of transformation. Evidence from Italy (2018)
- The regulatory option on the subject of sustainable finance and first evidence of Consob supervision on non-financial statements (Speech by Prof. Avv. Anna Genovese - 25 October 2018) [only in Italian]
- Evolution of the regulatory framework on the subject of sustainable finance - First CONSOB evidence on non-financial statements (Slides by Prof. Avv. Anna Genovese - 19 June 2018) [only in Italian]
3. Other useful documentation
- NFS Observatory Report (2019)
- Corporate Governance Code (2020)
- Report Iosco on Sustainable Finance (April 2020)
- ECB launches public consultation on its guide on climate-related and environmental risks (ECB Press Release of 20 May 2020)
- "ESG Risk in times of Covid-19" (Bank of Italy publication of 15 June 2020)
4. TCFD - Task Force on Climate-related Financial Disclosures
- Press release of 1st March 2021 - Consob supports FSB Task Force recommendations on communication of financial information on climate change
- TCFD - Task Force on Climate-related Financial Disclosures - Consultation on Forward-Looking Financial Sector Metrics (October 2020 - 27 January 2021)
- Communication from the European Commission (2019/C 209/01) - Guidelines on non-financial reporting: Supplement on reporting climate-related information (Annex II)
- Recommendations of the Task Force on Climate-related Financial Disclosures (15 June 2017)
5. Ongoing consultations and open hearings
- CONSOB - Voluntary regime for the publication of the Non-Financial Declaration (NFD) - Call for evidence [only in Italian version] (1 September 2020 / 30 November 2020)
- Webinar: Voluntary non-financial reporting regime - The call for evidence on the state of implementation of the discipline and on the prospects for reform (Speech by Prof. Avv. Anna Genovese - 26 October 2020) [only in Italian version]
- Webinar: Voluntary non-financial reporting regime - The call for evidence on the state of implementation of the discipline and on the prospects for reform (Speech by Dr. Nadia Linciano: 26 October 2020) [only in Italian version]
- Eba - Consultation paper - Draft Implementing Standards on prudential disclosures on ESG risks in accordance with Article 449a CRR (EBA/CP/2021/06 - 1st March 2021 / 1st June 2021)
- Esma - Consultation paper containing ESMA's draft advice to the European Commission on Article 8 of the Taxonomy Regulation (ESMA30-379-325 - 5 November 2020 / 4 December 2020)
- ESMA - Final Report on advice on Article 8 of the Taxonomy Regulation (ESMA30-379-471 - 26 February 2021)
- TCFD - Task Force on Climate-related Financial Disclosures - Consultation on Forward-Looking Financial Sector Metrics (October 2020 - 27 January 2021)
- European Commission - Consultation Document Proposal for an Initiative on Sustainable Corporate Governance (26 October 2020 - 8 February 2021)
- IFRS Foundation - Consultation Paper on Sustainability Reporting (30 September 2020 - 31 December 2020)
- European Commission - Consultation Document Proposal for an Initiative on Sustainable Corporate Governance (26 October 2020 - 8 February 2021)
- European Commission - Targeted consultation on the establishment of an EU Green Bond Standard (12 June 2020 - extended to 2 October 2020)
- ESAs announce public hearing on ESG disclosures (ESAs press release of 9 june 2020)
- Joint ESAs consultation on ESG disclosures (JC 2020 16 - 23 April 2020 / 1 September 2020)
- Slide deck on Public Hearing on ESG disclosure (2 July 2020)
- ESAs Survey on templates for Environmental and/or Social financial products under SFDR (21 September - 16 October 2020)
- ESAs Final Report on draft Regulatory Technical Standards with regard to the content, methodologies and presentation of disclosures pursuant to Article 2a(3), Article 4(6) and (7), Article 8(3), Article 9(5), Article 10(2) and Article 11(4) of Regulation (EU) 2019/2088 (JC 2021 03 of 2 February 2021)
- European Commission - Consultation on the renewed sustainable finance strategy (8 aprile 2020 / 15 luglio 2020)
- Document ESMA30-22-821 of 15 July 2020 - Response to public consultation - EC consultation on a Renewed Sustainable Finance Strategy
- European Commission - Non-financial reporting by large companies (updated rules) - 20 February 2020 / 11 June 2020
- Summary report (Ares(2020)3997889 - 29 July 2020)
- Esma - Consultation paper on integrating sustainability risks and factors in MIFID II (Esma 35-43-1210 - 19 June 2018 / 19 February 2019)
- Esma - Consultation paper on integrating sustainability risks and factors in the UCITS Directive and AIFMD (Esma 34-45-569 - 19 December 2018 / 19 February 2019)
- Eiopa - Consultation paper on on technical advice on the integration of sustainability risks and factors in the delegated actsunder Solvency II and IDD (EIOPA-BoS-18/483 - 26 November 2018 / 30 January 2019)
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