On 6 February, ESMA published its sustainable finance strategy which sets out how ESMA plans to focus on sustainability. ESMA’s key priorities include:
- completing the regulatory framework on transparency obligations via the Disclosures Regulation. ESMA intends to work with the EBA and EIOPA to product joint technical standards;
- reporting on trends, risks and vulnerabilities (TRV) of sustainable finance by including a dedicated chapter in its TRV Report, including indicators related to green bonds, investing in Environmental, Social and Governance (ESG) factors, and emission allowance trading;
- analysing financial risks from climate change, including potentially climate-related stress testing in different market segments;
- pursuing convergence of national supervisory practices on ESG factors with a focus on mitigating the risk of greenwashing, preventing mis-selling practices, and fostering transparency and reliability in the reporting of non-financial information;
- participating in the EU Platform on Sustainable Finance that will develop and maintain the EU taxonomy and monitor capital flows to sustainable finance; and
- ensuring ESG guidelines are adhered to in the entities that ESMA supervises directly, whilst being ready to accept any new supervisory mandates related to sustainable finance.
To deliver its strategy, ESMA set up a Coordination Network on Sustainability in 2019. The network comprises ESMA staff and experts from national competent authorities. It will also be supported by a consultative stakeholder working group, which will be established in the coming months.