[ESMA30-1668416927-2473 ] Natasha Cazenave’s speech at AFME 2nd Annual Sustainable Finance Conference, 4 May 2023

Natasha Cazenave, the Executive Director of ESMA, delivered a keynote speech at the AFME 2nd Annual Sustainable Finance Conference. She discussed ESMA’s role in enabling the transition to a low carbon economy and outlined the initiatives and priorities of ESMA in supporting the EU’s sustainable finance agenda.
ESMA aims to contribute to the transition by preserving trust in the financial system, ensuring investor access to adequate information, and preventing the risk of greenwashing. The journey to adapt financial regulation to the transition started with the EU’s Action Plan to finance sustainable growth in 2018, which included measures like the Taxonomy Regulation, SFDR, and revisions to the Benchmarks Regulation.
ESMA has its own Sustainable Finance Roadmap with three priorities: promoting transparency and tackling greenwashing, capacity building, and monitoring and assessing ESG markets and risks. Corporate sustainability reporting is seen as crucial, and ESMA is involved in the preparatory work for the CSRD and is developing guidelines for its supervision and enforcement. ESMA is also contributing to the development of ESRS and providing technical advice on disclosures supporting the EU Taxonomy.
ESMA has collaborated with other regulatory authorities to provide clarity and guidance on the SFDR. They are working on draft regulatory technical standards to enhance transparency and provide better information on the sustainability characteristics and objectives of investment products. Proposed changes include enhanced disclosures on decarbonization targets, addressing comparability issues, expanding social indicators, and improving financial product templates.
To combat greenwashing, ESMA believes that labels for sustainable financial products could help channel resources to finance the necessary shift of economies. They mentioned the Ecolabel for green products and services, the upcoming label for green bonds, and the potential for a credible European labeling regime with common criteria.
ESMA has introduced changes to the regulatory framework for investment firms, integrating sustainability factors, risks, and preferences into organizational requirements. They have also updated guidelines on suitability assessment and product governance to reduce the risks of greenwashing and enhance investor protection.