The standards for responsible and sustainable finance, whether at the European, national, or international level, aim to integrate sustainability and environmental, social, and governance (ESG) considerations into investment processes and strategic decisions, channel financial flows towards greener sectors, and make activities more transparent and focused on long-term perspectives.
The Sustainable Finance Action Plan, particularly with the SFDR and the Taxonomy, along with the Green Deal and its CSRD directive, as well as frameworks such as the Global Reporting Initiative (GRI), Task Force on Climate-related Financial Disclosures (TCFD), Task Force on Nature-related Financial Disclosures (TNFD), and others, have structured the responsible and sustainable finance domain since 2019.
Thus, the complexity of these rules can sometimes hinder their clarity for recipients, making their application uncertain.
Misunderstanding the issues and regulatory framework may foster non-compliance, thereby increasing financial, liability, and reputational risks for the recipients.
- For companies, adhering to these regulations means gaining a competitive edge, solidifying a sustainable business model, and securing a “social license to operate.”
- For asset managers, meeting the challenge of integrating sustainability into their investment strategies allows them to better monitor the risks and impacts of their investments and more effectively seize ESG opportunities.
However, this is not always easy in practice.
In this series of articles, we revisit the regulatory and standard-setting landscape that has gradually shaped financial practices, from analysis and management tools to transparency requirements.
In particular, we’ll be reviewing the main obligations arising from this, the obstacles and difficulties of application, and ending with best practices.
Check out our articles on the following regulations:
- SFDR – three years after its introduction
- Taxonomy – a difficult application
- CSRD – highly anticipated implementation
- Greenwashing – granular recommendations
- Recent developments – new challenges
Useful links and sources :
“Finance durable: plan d’action de la Commission pour une économie plus verte et plus propre,” Comm. Eur. – Commun. Presse, March 8, 2018, https://ec.europa.eu/commission/presscorner/detail/fr/IP_18_1404.
Green claims, https://environment.ec.europa.eu/topics/circular-economy/green-claims_en
IF.E. Mezzanotte, “EU Sustainable Finance: Complex Rules and Compliance Problems,” Rev. Bank. Financ. Law, 2023 2022, vol. 42, no. 2, pp. 845-896
Recommendations of the TNFD, https://tnfd.global/recommendations-of-the-tnfd/
Règlement (UE) 2019/2088 du Parlement Européen et du Conseil du 27 novembre 2019 sur la publication d’informations en matière de durabilité dans le secteur des services financiers, OJ L, vol. 317, November 27, 2019, http://data.europa.eu/eli/reg/2019/2088/oj/fra.
Règlement (UE) 2020/852 du Parlement européen et du Conseil du 18 juin 2020 sur l’établissement d’un cadre visant à favoriser les investissements durables et modifiant le règlement (UE) 2019/2088, OJ L, vol. 198, June 18, 2020, http://data.europa.eu/eli/reg/2020/852/oj/fra.
Règlement (UE) 2023/2631 du Parlement européen et du Conseil du 22 novembre 2023 sur les obligations vertes européennes et la publication facultative d’informations pour les obligations commercialisées en tant qu’obligations durables sur le plan environnemental et pour les obligations liées à la durabilité, November 22, 2023, http://data.europa.eu/eli/reg/2023/2631/oj/fra.
Renewed sustainable finance strategy and implementation of the action plan on financing sustainable growth, https://finance.ec.europa.eu/publications/renewed-sustainable-finance-strategy-and-implementation-action-plan-financing-sustainable-growth_en
Stopping greenwashing: how the EU regulates green claims, https://www.europarl.europa.eu/topics/en/article/20240111STO16722/stopping-greenwashing-how-the-eu-regulates-green-claims
TCFD Recommendations, https://www.fsb-tcfd.org/recommendations/
The European Green Deal, https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal_en
The global standards for sustainability impacts, https://www.globalreporting.org/standards/
United Nations, Accord de Paris, December 12, 2015, https://treaties.un.org/Pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XXVII-7-d&chapter=27&clang=_fr.
