On 9 March, the European Commission released the reports prepared by the Technical Expert Group (TEG) on Sustainable finance.
One report is dedicated to the EU’s classification of green economic activities which will be used by the European Commission to develop delegated acts to the EU Taxonomy Regulation. These classifications focus on climate change mitigation and climate change adaptation and will be adopted by the end of the year and further delegated acts will be expected in 2021. Also as part of the Taxonomy regulation the European Commission will work on the setting up of the platform foreseen in article 15 in the coming months.
The second report is dedicated to the EU Green Bond Standard and complements the recommendations published in June 2019 by the TEG. The latter provided clear and comparable criteria for issuing green bonds (using the taxonomy work).
The European Commission is considering a legislative proposal on an EU Green Bond Standard and will consult on this issue as part of its upcoming wider consultation on sustainable finance which is expected to be published in the next few days.
On 12 March the Commission organised a stakeholder dialogue on these reports. The interest for these standards and classification gathered over 15 000 listeners mostly from European but also from third Countries (given the current COVID-19 situation the conference was web streamed). As some of the questions from the stakeholders could not be addressed the European Commission announced the publication of a Q&A in the next few days on the taxonomy aspects.
Next steps on sustainable finance
The TEG work ended with the publication of these reports, however the group will still advise the Commission until September 2020.
The European Commission is expected to publish a consultation in the near future. The consultation will include questions on the whether the standards for sustainable investments are enough, on whether all opportunities have been sufficiently explored and on whether environmental and climate risks are fully taken into account.
A sustainable finance strategy will then be presented in September 2020. The Commission will also work on the Taxonomy review clause regarding the possible extension of the scope.
The work on the taxonomy will also be used in the framework of the EU Ecolabel on which the European Commission is currently working. The next stakeholder meeting on the EU Ecolabel will take place on 25 March 2020.
The European Commission is also working on the Non Financial Reporting Directive (NFRD review), a consultation is ongoing and we are expecting a proposal to be published before the end of the year.
By Aurélie Cassou