ESBG calls for more feasible rules on the new corporate sustainability due diligence

In its response to the European Commission (EC)’s call for feedback on the proposal for a Directive on Corporate Sustainability Due Diligence, the ESBG suggests several changes to make the rules more feasible.

ESBG members support the goal to tackle environmental issues and human rights abuses as they commit to sustainable, responsible and future-oriented banking and support the creation of a coherent legal framework. Nevertheless, ESBG finds that the proposal foresees a role for financial entities that is too ambitious and could create legal uncertainty.

To avoid unfeasible implementation and monitoring costs, accompanied by uncertain legal consequences, we request further clarification on the role of financial entities in the context of the proposed Directive.Rules must be proportionate, feasible and should not restrict competition and innovation. The current environment might not be adequate for requirements that could hamper economic and financial recovery.

The ESBG feedback calls to limit the scope to companies with less than 1000 employees, and for a voluntary common due diligence framework of best practices for regulated financial undertakings that takes into account a specific connection to the provision of services by banks. It also calls for the introduction of a grandfathering provision for the identification of actual and potential adverse impacts and the creation of a uniform standard for the preparation of a Code of Conduct.

ESBG members underline that there is no need to establish new corporate directors’ duties and that existing liability regimes already provide appropriate rules. In consideration of the right to the presumption of innocence, businesses should not be held for damage in their supply chain if they did not directly cause it.

Additionally, several terms need to be further clarified and disproportionate provisions should be eliminated.

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ESBG submits its position to the International Accounting Standards Board on IFRS 17

On 23 May, ESBG submitted its position paper to the International Accounting Standards Board (IASB) Interpretations Committee (IC)’s on IFRS 17 (standard for insurance contracts).

The IC is the interpretative body of the IASB. Its agenda decisions include explanatory material on how the applicable principles and requirements in IFRS Standards apply to the transaction or fact pattern described in the agenda decision.

The IFRS IC received a request in March about a group of annuity contracts, i.e. written agreement between an insurance company and a customer outlining each party’s obligations. The request questioned how an entity determines the amount of the contractual service margin (unearned profit that an entity expects to earn as it provides services) to recognise  in the profit or loss statement in a period in case of survival of the policyholder at the end of the insurance policy term.

The Committee concluded that a method based on the amount of the annuity payment the policyholder is able to validly claim meets the principles of IFRS 17. Consequently, the Committee decided not to add a standard-setting project to the work plan.

On our part, ESBG believes that this does not correctly portray the insurance service provided under these contracts. We are of the opinion that an alternative approach based on the present value of expected future annuity payments would more accurately  determine the quantity of insurance contract services provided by their contracts. As the policyholder has exchanged an insurance premium to get protection against the risk of surviving for an unexpected period of time, the value the policyholder obtains from the insurance contract is continuous over time.

In addition to this, IFRS 17 is a principle-based standard and should not prescribe a method for determining the quantity of the benefits provided under a group of insurance contracts. Finally, ESBG questions the timing of bringing a TAD less than one year before the date of first application of IFRS 17. ESBG would recommend this issue to be addressed in a post-implementation review together with other issues that were pending to be addressed as well as others that may arise in the future.

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Sanctions Painkiller: Series of webinars on navigating sanctions compliance

Sanctions Painkiller: Series of the webinar on navigating sanctions compliance

Amid the shifting and rapidly deteriorating geopolitical landscape, companies find themselves increasingly exposed to the risk of sanctions, operational and supervisory problems, and obligations to comply with regulations from multiple jurisdictions and organisations. Compliance measures must become more sophisticated to avoid facing penalties and reputational risks.
Over the years, the EU has imposed sanctions on a number of countries and entities, such as Iraq, Iran, North Korea, and Venezuela. In the last months, the EU and its allies have imposed a stringent sanction regime on Russia and Russian entities, amid the Ukrainian crisis.
Against this backdrop, the World Savings and Retail Banking Institute is pleased to launch a series of webinars aimed at providing critical intelligence, best practices, and key methods that institutions in the financial industry can employ the navigate the current sanction regime.
In the first webinar, speakers from Pideeco, will provide guidance and concrete examples on global sanctions and controls restrictions that will facilitate smooth overview and productive discussions.


ESBG welcomes horizontal cybersecurity requirements for digital products

The European Commission launched a public consultation in March to gather views from a wide range of stakeholders to help shaping the Cyber Resilience Act, a regulation on horizontal cybersecurity requirements for digital products and ancillary services. As a response to this public consultation on the Cyber Resilience Act, ESBG submitted its position to the European Commission on 18 May. The ESBG position focuses on the following aspects: I) Cybersecurity of digital products and the users of digital products; II) Improving the cybersecurity of digital products; and III) Stakeholder impact of potential regulatory measures.

Digital products and ancillary services create opportunities for EU economies and societies but they also lead to new challenges because when everything is connected a cybersecurity incident can affect an entire system, and thus disrupt economic and social activities. The initiative for a Cyber Resilience Act aims to address market needs and protect consumers from insecure products by introducing common cybersecurity rules for manufacturers and vendors of tangible and intangible digital products and ancillary services.

On the whole, ESBG welcomes the European Commission’s Cyber Resilience Act as the level of risk of cybersecurity incidents affecting digital products has increased during the last five years. The overall level of cybersecurity of digital products marketed in the European Union could be improved. Subjecting certain products marketed in the Union to cybersecurity requirements would be effective (e.g. hardware or software products subject to higher cybersecurity risks).

Moreover, ESBG members believe that leaving it to hardware manufacturers and software developers to demonstrate compliance with security requirements is insufficient. It would be more valuable to have the opinion of a third party based on a control framework.

All feedback received will be taken into account as the Commission further develops and fine-tunes this initiative, that is tentatively scheduled for the third quarter of 2022. Input will help the Commission analyse cybersecurity-related problems associated with the digital products markets, explore possible ways forward and assess the impact of different types of interventions.

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An open data economy should be multilateral and cross-sectoral

ESBG submitted its position to the European Commission on the proposed Data Act on 12 May. ESBG welcomed the Commission’s data strategy and its commitment to create a single market for data that will constitute a potential source of growth and innovation.

We believe that a European approach to data is essential to ensure competitiveness, avoid fragmentation of national regulations, and benefit from a scale effect. Moreover, ESBG members stressed that the horizontal regulatory approach is crucial to establish the key rules and principles for all sectors as, in our view, an open data economy should be multilateral and cross-sectoral.

The European Commission published its proposal for the Data Act in February and opened this call for feedback in March. The proposal clarifies who can use, access, and share data generated in the EU across all economic sectors, and on what terms. The Data Act aims to provide a harmonised framework for data sharing, conditions for access by public bodies, international data transfers, cloud switching, and interoperability.

The Data Act is based on the results of an open public consultation that the European Commission carried out in 2021, to which ESBG responded in September. It is the second main legislative initiative directly related to data, following the recent adoption of the Data Governance Act, which aimed to increase trust and facilitate data sharing across the EU and between sectors.

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Overtime for Ukrainian war refugees: DSGV employees donate over 100,000 euros through extra work

Overtime for Ukrainian war refugees: DSGV employees donate over 100,000 euros through extra work

Russia’s military incursion into Ukraine has caused the largest humanitarian crisis in Europe since the Second World War with millions fleeing their country. At the same time, it has triggered various actions and reactions from the European Commission and EU regulators that heavily affect banks.
ESBG members have raised to the challenges that the crisis in Ukraine has created. On one hand, they are sharing knowledge and best practices in a coordinated way to tackle the challenges as they raise. On the other, European savings and retail banks have reaffirmed their commitment to social responsibility with direct actions and initiatives to support people in need.

Overtime for Ukrainian war refugees: DSGV employees donate over 100,000 euros through extra work

Employees of the German Savings Banks and Giro Association (DSGV) have so far collected more than €100,000 for Ukrainian war refugees. The proud sum was raised because employees donated part of their overtime. The DSGV converted the overtime donation into a corresponding cash donation.
With the overtime donation, DSGV supports various projects that benefit war refugees from Ukraine, including “Arrival Support Berlin”, “Support for Ukrainian Refugees in Moldova”, “Ukraine-Hilfe Lobetal” and the Ukraine aid of “wildtierrettung.de”. The initiatives have in common that they make it easier for people to arrive in Germany and thus make an important contribution in a difficult life situation.

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Stand with Ukraine: Erste family provides extensive humanitarian aid

Stand with Ukraine: Erste family provides extensive humanitarian aid

Russia’s military incursion into Ukraine has caused the largest humanitarian crisis in Europe since the Second World War with millions fleeing their country. At the same time, it has triggered various actions and reactions from the European Commission and EU regulators that heavily affect banks.
ESBG members have raised to the challenges that the crisis in Ukraine has created. On one hand, they are sharing knowledge and best practices in a coordinated way to tackle the challenges as they raise. On the other, European savings and retail banks have reaffirmed their commitment to social responsibility with direct actions and initiatives to support people in need.

Erste Bank Group (Austria, Croatia, Czech Republic, Hungary, Romania, Slovakia): Together with its subsidiary banks and ERSTE Foundation, Erste Group has been implementing a comprehensive package of humanitarian support measures for Ukrainians. For instance, since Monday 14 March 2022, the Caritas Day Centre at Erste Campus in Vienna has been welcoming Ukrainians in need from 7:00 a.m. to 7:00 p.m. – seven days a week. People on the move also have access to WiFi and quiet zones. A children’s play corner is also provided for the little ones thanks to SOS Children’s Village. In addition, all payments from Erste Group accounts to Ukraine are free of charge, with any fees incurred being refunded after the transfer to facilitate private aid payments and donations to organizations. Erste Group’s subsidiary banks offer access to free accounts for Ukrainian refugees to facilitate money transfers. Moreover, Erste Group will support its partner organizations Caritas and the International Red Cross with donations of one million euros each. In addition, the Romanian subsidiary bank BCR donated a total of 100,000 euros to Save the Children, the Red Cross, and Romanian government initiatives

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The German Savings Banks Association (DSVG): Over 100,000 accounts already opened for Ukrainian war refugees

The German Savings Banks Association ( DSVG ): More than 100,000 accounts already opened for Ukrainian war refugees

Russia’s military incursion into Ukraine has caused the largest humanitarian crisis in Europe since the Second World War with millions fleeing their country. At the same time, it has triggered various actions and reactions from the European Commission and EU regulators that heavily affect banks.
ESBG members have raised to the challenges that the crisis in Ukraine has created. On one hand, they are sharing knowledge and best practices in a coordinated way to tackle the challenges as they raise. On the other, European savings and retail banks have reaffirmed their commitment to social responsibility with direct actions and initiatives to support people in need.

DSVG (Germany): As of 27 April 2022, the German Savings Banks Association had provided Ukrainian refugees with more than 136.000 bank accounts. Refugees can easily apply online for a GiroExpress account with their ID thanks to a simplified procedure. Moreover, DSGV is providing all relevant information on bank accounts in Ukrainian and is working on extending the service to online banking, its platform for job seekers, etc. DSVG is also supporting the initiative #UnterkunftUkraine (Accommodation Ukraine) which connects volunteers with refugees looking for temporary accommodation. By the end of April, the initiative offered temporary accommodation to 24,000 people in 150 German cities, offering almost 370,000 beds, which makes #UnterkunftUkraine currently the platform with the most bed offers.

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CaixaBank has been leveraging its network of branches in Spain to assist asylum seekers and refugees fleeing Ukraine

CaixaBank has been leveraging its network of branches in Spain to assist asylum seekers and refugees fleeing Ukraine.

Russia’s military incursion into Ukraine has caused the largest humanitarian crisis in Europe since the Second World War with millions fleeing their country. At the same time, it has triggered various actions and reactions from the European Commission and EU regulators that heavily affect banks.
ESBG members have raised to the challenges that the crisis in Ukraine has created. On one hand, they are sharing knowledge and best practices in a coordinated way to tackle the challenges as they raise. On the other, European savings and retail banks have reaffirmed their commitment to social responsibility with direct actions and initiatives to support people in need.

CaixaBank (Spain): Since late February, CaixaBank has been leveraging its network of branches in Spain to assist asylum seekers and refugees fleeing Ukraine. Ukrainian refugees in Spain are eligible for several free services, regardless of which bank they use. Since the early stages of the emergency, CaixaBank set up interpretation and translation services to make it easy for newly arrived people from Ukraine to sign up for basic financial services. As other customers in vulnerable situations do, Ukrainians can open a Social Account at CaixaBank, which includes a checking account, a bank card, and access to online banking free of charge. Moreover, customers of Ukrainian banks are allowed to use CaixaBank’s entire network of ATMs in Spain for free.

Since early March, CaixaBank has been offering free money transfers to Ukraine and neighboring countries, where Ukrainian civilians seek refuge: Moldova, Romania, Hungary, Slovakia, and Poland.
Among the wide range of measures to facilitate aid to the Ukrainian people, CaixaBank collaborated with the CaixaBank Volunteers Association, with more than 5,000 members spread throughout Spain, to mobilize a convoy of buses to the Polish-Ukrainian border and help evacuate people wishing to request asylum in Spain. A total of 204 Ukrainians, mostly young women, and children, have already arrived in Spain thanks to this initiative, and a second convoy was scheduled for the end of April.

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Ukraine: ESBG members reaffirm their social responsibility

Ukraine: ESBG members reaffirm their social responsibility

Russia’s military incursion into Ukraine has caused the largest humanitarian crisis in Europe since the Second World War with millions fleeing their country. At the same time, it has triggered various actions and reactions from the European Commission and EU regulators that heavily affect banks.
ESBG members have raised to the challenges that the crisis in Ukraine has created. On one hand, they are sharing knowledge and best practices in a coordinated way to tackle the challenges as they raise. On the other, European savings and retail banks have reaffirmed their commitment to social responsibility with direct actions and initiatives to support people in need.

Associazione di Fondazioni e di Casse di Risparmio (ACRI) (Italy): On 7 March, ACRI allocated an extraordinary contribution of 2 million euros to support the activities of Non-Governmental Organizations (NGOs) assisting Ukrainian refugees fleeing their country.

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