On 17 February, ESBG submitted its response to the ESMA consultation about the use of ESG terms in funds’ names. ESBG’s answer is built on the following three key points:
- ESBG underlines the need to establish, first and foremost, a clear and uniform methodology for “sustainable investments”.
- ESBG does not believe that introducing ESMA’s suggested quantitative thresholds to assess funds’ names would be the best solution.
- Instead of introducing the suggested thresholds, ESBG would like to call for a better implementation of the already existing requirements.
ESBG welcomes ESMA’s objective to tackle greenwashing when it comes to funds’ names. As a prerequisite to any action, there must be a clear and scientifically comprehensible uniform legal definition of “sustainability” to be able to present sustainability features in investment products. EU sustainability-related initiatives, such as the Sustainable Finance Disclosure Regulation (SFDR) and the EU Taxonomy Regulation, are already aiming at creating a harmonised cross-border framework for offering sustainable products in the EU. Hence, it is too early to set thresholds until a harmonized methodology for “sustainable investments” is provided.
More specifically, ESBG believes that the proposed threshold of 80% for investments with sustainable and social objectives is too high. There is notably a surprising gap between this threshold and the ones already existing in other EU countries such as Germany or Luxembourg. ESBG is also not in favour of the inclusion of an additional threshold of at least 50% of minimum proportion of sustainable investments for the use of the word “sustainable” in funds’ names for now. This last threshold should be firstly reviewed and tested for its market suitability before being implemented.
Finally, ESBG believes that sustainable finance regulations should rather incentivise asset manager and product manufacturers to increase the taxonomy level of ESG financial instruments since this has not been sufficiently the case so far.
related
European Banking Authority (EBA) on ESG risk management
The European Savings and Retail Banking Group (ESBG) submitted its response to the consultation launched by the European Banking Authority (EBA). ESBG insists on the need for consitency with CSRD and CSDDD, the addressees of this guideline should also
Enhancing Transparency in Bank Disclosures: ESBG delivers comprehensive response to the EBA’s Pillar 3 data hub consultation
On 14 December 2023, the European Banking Authority (EBA) published a discussion paper on the Pillar 3 data hub processes and its possible practical implications.
IASB Exposure Draft (ED) on Financial Instruments with Characteristics of Equity
On 29 November 2023, the International Accounting Standards Board (IASB) proposed amendments in an Exposure Draft to tackle challenges in financial reporting for instruments with both
ESBG’s response to the EFRAG Comment Letter on Financial Instruments with Characteristics of Equity
On 29 November 2023, the International Accounting Standards Board (IASB) proposed amendments in an Exposure Draft to tackle
ESBG advocates for increased clarity and streamlining of supervisory reporting requirements
On 14 March, ESBG submitted its response to the European Banking Authority (EBA) consultation on ITS amending Commission Implementation Regulation (EU) 2021/451 regarding supervisory reporting
WSBI-ESBG advocates for robust implementation of the BCBS Pillar 3 framework for climate-related financial risks
On 14 March, WSBI-ESBG submitted its response to the Basel Committee on Banking Supervision (BCBS) consultation on its Pillar 3 disclosure framework for climate-related financial risks
ESBG stresses the need for consistency and clarity in its Response to the SFDR Review Consultation
ESBG submitted its response to the European Commission’s consultation on the SFDR review, aiming to enhance transparency in sustainability-related disclosures within the financial services sector
ESBG response to the EBA’s consultation on Guidelines on preventing the abuse of funds and certain crypto-assets transfers for ML/TF
The guidelines on the “travel rule” delineate the actions that Payment Service Providers (PSPs), Intermediary PSPs
ESBG responds to the SRB consultation on the future MREL policy
The European Savings and Retail Banking Group (ESBG) submitted its response to the consultation launched by the Single Resolution Board (SRB) in December 2023 on the future of the Minimum Requirement for own funds
ESBG’s response to the Commission’s consultation on the GDPR
The primary EU legislation ensuring the fundamental right to data protection is the General Data Protection Regulation