Sustainable Finance: Commission takes further steps to boost investment for a sustainable future

In view of the publication of the proposed new „Sustainable Finance package“ which consists of three separate pieces of (proposed) legislation to improve and foster sustainable finance in the EU (please see EventID #21535 and EventID #21559 in this context), the European Commission (EC) has published an accompanying statement. In it, the Commission lists all the documents that have been issued in this context (delegated acts, proposed new regulations, Q&As, etc.) and briefly describes the key content of the new package.
One new document listed in the statement is the factsheet which
(1) provides a high level overview of the short-, medium-, and long-term goals of sustainable finance;
(2) illustrates the tools available for companies to become sustainable (upgrades in production technology, increase in energy efficiency, etc.);
(3) provides an overview of the legislation contained in the new package;
(4) provides a short explanatory graphic on how ESG ratings work; and
(5) outlines the key differences on ESG ratings, disclosures, and confidence before and after the new regulation would take effect. The following graphic illustrates these differences:
#### Benefits of the new ESG rating requirements

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To recall, the new package will / would
– establish EU Taxonomy screening criteria for economic activities making a substantial contribution to non-climate environmental objectives;
– expand on economic activities contributing to climate change mitigation and adaptation under the Taxonomy Climate Delegated Act to include activities that weren’t previously covered yet (e.g. manufacturing and transport sectors); and
– establish a new authorization regime for ESG rating providers and stipulate new governance, transparency, disclosure, and conflicts of interest requirements ESG rating providers must adhere to in an effort to increase reliability, trust, transparency over ESG ratings.