Monthly Updates for Regulating Financial Services under Environmental, Social, and Governance Principles
In the realm of sustainable finance, recent developments have been making waves worldwide. Here's a roundup of some key announcements, reports, and initiatives that have shaped the landscape.
At the COP16 conference, the Taskforce on Nature-related Financial Disclosures (TNFD) unveiled its draft guidance on nature transition planning, drawing attention to the importance of considering the impact of climate change on nature.
The European Banking Authority (EBA) has published an ESG dashboard, aiming to provide a comprehensive view of the European banking sector's exposure to environmental, social, and governance (ESG) risks.
In the UK, the Financial Conduct Authority's (FCA) multi-firm review of climate reporting highlighted progress in integrating climate change risks but noted challenges with data availability and reporting complexity.
Meanwhile, in the Netherlands, the Dutch Authority for the Financial Markets (AFM) released findings from a study on asset managers' engagement practices, and a consultation on the implementation of the Corporate Sustainability Due Diligence Directive into Dutch law was announced.
Across the Atlantic, the Securities and Exchange Commission (SEC) in the US has withdrawn 14 proposed ESG-related rulemakings, while the Australian Competition and Consumer Commission (ACCC) authorized the Australian Sustainable Finance Institute (ASFI) to collaborate on sustainable finance initiatives in Australia, subject to conditions to prevent anti-competitive behavior.
On the enforcement front, the SEC charged Wisdom Tree for misleading ESG claims in the US, and the ASIC's 2025 Enforcement Priorities highlighted an ongoing focus on greenwashing. The Australian Competition and Consumer Commission (ACCC) also initiated greenwashing proceedings against Santos.
In Europe, the European Commission adopted a recommendation for voluntary sustainability reporting for Small and Medium Enterprises (SMEs) in the EU, and the Network of Central Banks and Supervisors for Greening the Financial System published its short-term scenarios, representing the first publicly available framework designed to analyze the potential near-term impacts of climate policies and climate change on financial stability and economic resilience.
The European Securities and Markets Authority (ESMA) published its annual report on EU carbon markets and their implementation timeline on sustainable finance, and the Council of the EU published a draft Regulation on the transparency and integrity of ESG rating activities.
The UK government, on the other hand, announced it will not pursue a UK Taxonomy and will be moving forward on the delivery of its commitments on transition plans and the sustainability reporting standards. The UK government also published a response to a consultation on the future regulatory regime for ESG ratings providers.
The Financial Conduct Authority (FCA) published 'All aboard: strong infrastructure for smooth journeys' speech, and the Commission Notice on the interpretation and implementation of certain legal provisions of the Disclosures Delegated Act under Article 8 of the EU Taxonomy Regulation was published.
In the Netherlands, the Dutch Authority for the Financial Markets (AFM) explores an exporative study into ESG data risk management, and the Prudential Regulation Authority (PRA) in the UK published a Consultation Paper on enhancing banks' and insurers' approaches to managing climate-related risks.
Lastly, a report on 'Fit for 55' climate scenario analysis was published, and the HMT consults on a UK Green Taxonomy. The AFM's study into ESG transition plans for the UK was also mentioned.
June and July 2023 saw various governments declaring their intentions to develop and implement a national sustainability framework, but specific announcements were not found in search results.
These developments underscore the growing global focus on sustainable finance, with regulators and financial institutions taking steps to address climate change risks, improve transparency, and promote sustainable practices.
