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2018/0179(COD) Disclosures relating to sustainable investments and sustainability risks
Next event: Final act published in Official Journal 2019/12/09 more...

Progress: Procedure completed

RoleCommitteeRapporteurShadows
Lead ECON TANG Paul (icon: S&D S&D) PIETIKÄINEN Sirpa (icon: PPE PPE), KAMALL Syed (icon: ECR ECR), WIERINCK Lieve (icon: ALDE ALDE), SCOTT CATO Molly (icon: Verts/ALE Verts/ALE)
Committee Opinion FEMM
Committee Opinion EMPL
Committee Opinion ENVI VĂLEAN Adina-Ioana (icon: PPE PPE) Jørn DOHRMANN (icon: ECR ECR), Gerben-Jan GERBRANDY (icon: ALDE ALDE)
Lead committee dossier:
Legal Basis:
TFEU 114

Events

2019/12/09
   Final act published in Official Journal
Details

PURPOSE: to introduce transparency requirements on how financial companies integrate environmental, social and governance factors into their investment decisions.

LEGISLATIVE ACT: Regulation (EU) 2019/2088 of the European Parliament and of the Council on sustainability‐related disclosures in the financial services sector.

CONTENT: in the absence of harmonised rules on transparency, it is difficult for end-investors to effectively compare different financial products in different Member States in terms of their environmental, social and governance risks and the sustainable investment objectives they pursue. It is therefore necessary to establish a transparency framework to ensure that investors are well informed about the environmental and social impact of their investments.

Subject matter

This Regulation lays down harmonised rules for financial market participants and financial advisers on transparency as regards the integration of sustainability risks and the consideration of adverse sustainability impacts in their processes and the provision of sustainability information in relation to financial products. It requires financial market participants and financial advisers to act in the best interests of investors by exercising due diligence before making the investment.

Transparency obligations

The Regulation provides for the obligation for financial market participants and financial advisers who provide investment advice or insurance advice to make known:

- their policies on the integration of sustainability risks into their investment decision-making process or investment advice;

- the procedures in place to integrate environmental and social risks into their investment and advisory processes and the extent to which these risks could affect the profitability of the investment;

- the reasons why they do not take into account the adverse impacts of investment decisions on sustainability factors, including, where appropriate, information on whether and when they intend to take such adverse impacts into account ;

- where a financial product promotes environmental or social features, information on how those features are met;

- where a financial product has the objective of reducing carbon emissions, information including the low carbon exposure in view of achieving the long‐term global warming objectives of the Paris Agreement;

- the methodologies used to assess, measure and monitor the environmental or social characteristics or the impact of the sustainable investments selected for the financial product, including its data sources, screening criteria for the underlying assets and the relevant sustainability indicators used to measure the environmental or social characteristics or the overall sustainable impact of the financial product.

Financial market participants and financial advisers shall include in their remuneration policies information on how these policies are adapted to the integration of sustainability risks and publish this information on their websites.

Derogations

This Regulation shall neither apply to insurance intermediaries which provide insurance advice with regard to insurance-based investment products nor to investment firms which provide investment advice that are enterprises irrespective of their legal form, including natural persons and self‐employed persons, provided that they employ fewer than three persons.

By 10 September 2022, and annually thereafter, the European Supervisory Authorities shall report to the Commission on best practices and make recommendations towards voluntary reporting standards. The Commission shall evaluate the application of the Regulation by 30 December 2022 at the latest.

ENTRY INTO FORCE: 29.12.2019.

APPLICATION: from 10.3.2021.

2019/11/27
   CSL - Draft final act
Documents
2019/11/27
   CSL - Final act signed
2019/11/25
   EP - End of procedure in Parliament
2019/11/08
   EP/CSL - Act adopted by Council after Parliament's 1st reading
2019/11/08
   CSL - Council Meeting
2019/08/08
   EC - Commission response to text adopted in plenary
Documents
2019/04/18
   EP - Results of vote in Parliament
2019/04/18
   EP - Debate in Parliament
2019/04/18
   EP - Decision by Parliament, 1st reading
Details

The European Parliament adopted by 508 votes to 24, with 19 abstentions, a legislative resolution on the proposal for a regulation of the European Parliament and of the Council on disclosures relating to sustainable investments and sustainability risks and amending Directive (EU) 2016/2341.

The European Parliament’s position adopted at first reading under the ordinary legislative procedure amended the Commission proposal as follows:

Transparency obligations for the publication of sustainability information

The amended Regulation lays down the obligation on the financial market participants and financial advisers which provide investment advice or insurance advice with regard to IBIPs respectively, regardless the design of the financial products and the target market, to publish written policies on the integration of sustainability risks and ensure the transparency of the integration of sustainability risks.

The Regulation shall maintain the requirements for financial market participants and financial advisors to act in the best interests of investors by exercising due diligence before making the investment. It would also require financial market participants to integrate into their procedures and continuously assess not only all relevant financial risks, but also all sustainability risks that could have a significant negative impact on the financial performance of an investment and an advisory, respectively.

Therefore, under the proposed Regulation, financial market participants and financial advisors shall specify in their policies how they integrate these risks and publish these policies. Where they do not take into account the adverse impacts of investment decisions on sustainability factors, they shall publish on their website clear information on why they do not, including, where appropriate, information on whether and when they intend to take these negative impacts into account.

The proposed Regulation also requires financial market participants to:

- include in their remuneration policies information on how their remuneration policies are consistent with the integration of sustainability risks and publish this information on their website;

- include in the published pre-contractual information how sustainability risks are integrated into their investment decisions and the result of the assessment of the likely impact of sustainability risks on the performance of financial products;

- publish information on how environmental or social characteristics are respected when a financial product promotes, among other characteristics, environmental or social characteristics, or a combination of these characteristics;

- publish, where a financial product aims to reduce carbon emissions, information including the low-carbon exposure target for achieving the long-term global warming targets set by the Paris Climate Agreement;

- publish information on the methodologies used to assess, measure and monitor the environmental or social characteristics or impact of the sustainable investments selected for the financial product, including data sources;

- describe, in particular in the periodic reports, the overall sustainability impact of the financial product, using relevant sustainability indicators.

Competent authorities

Each Member State shall ensure that the competent authorities designated in accordance with sectoral legislation, also monitor compliance with requirements placed by this Regulation on financial market participants and financial advisers. The competent authorities shall have all the supervisory and investigatory powers that are necessary for the exercise of their functions under this Regulation.

Exemptions

This Regulation shall not apply to insurance intermediaries which provide insurance advice with regard to IBIPs and investment firms which provide investment advice that are enterprises irrespective of their legal form, including natural persons or self-employed persons, provided that they employ fewer than three persons.

Documents
2019/04/01
   EP - Approval in committee of the text agreed at 1st reading interinstitutional negotiations
2019/03/27
   CSL - Coreper letter confirming interinstitutional agreement
2018/11/14
   EP - Committee decision to enter into interinstitutional negotiations confirmed by plenary (Rule 71)
2018/11/12
   EP - Committee decision to enter into interinstitutional negotiations announced in plenary (Rule 71)
2018/11/09
   EP - Committee report tabled for plenary, 1st reading
Details

The Committee on Economic and Monetary Affairs adopted the report by Paul TANG (S&D, NL) on the proposal for a regulation of the European Parliament and of the Council on disclosures relating to sustainable investments and sustainability risks and amending Directive (EU) 2016/2341.

The committee recommended that the European Parliament's position adopted at first reading under the ordinary legislative procedure should amend the Commission's proposal as follows.

Objectives: the proposed Regulation would establish harmonised rules on transparency to be applied by financial market participants, insurance intermediaries providing advice on insurance-based investment products, investment firms providing investment advice and end-investors concerning:

the integration of sustainability risks and performance into investment decision-making or advisory processes; and the transparency of financial products or services , whether or not they have a targeted sustainability impact.

The objectives of the Regulation would be to (i) strengthen end-investor protection and investor information, (ii) improve disclosure and broaden their investment choices, and (iii) help financial market participants, investment advisors and publicly traded companies to integrate environmental, social and governance risks (ESG factors) into their investment decisions.

Definitions: It is proposed to introduce a clear and harmonised definition of the concepts of "sustainable investments" and "sustainability risks" avoiding any overlap where not in line with the principles of better regulation and proportionality. Sustainable investments would be defined as products associated with strategies to generate environmental, social and governance benefits , including one or a combination of the following investment categories:

investments in an economic activity that significantly contributes to an environmental objective, including key resource efficiency indicators, such as use of energy, use of renewable energy, use of raw materials, production of waste, emissions, CO2 emissions, use of water, use of land and impact on biodiversity; investments in an economic activity that contributes significantly to a social objective, investments that promote or support good governance practices in companies, and in particular companies with sound and transparent management structures and due diligence procedures, employee relations, transparent remuneration policies of relevant staff and tax compliance.

Transparency regarding sustainability risk policies: the amended text requires financial market participants, insurance intermediaries providing insurance advice on insurance-based investment products and investment firms providing investment advice to adopt due diligence policies for sustainability risk assessment and to communicate them annually to the competent authorities.

A brief summary of these policies would be made public, while respecting confidentiality and protecting know-how and trade secrets. The disclosure requirement would be proportionate to the size and systemic importance of the entity.

Credit institutions and insurance companies should also have policies in place to integrate sustainability risks into their investment and credit risk management processes.

Financial market participants and insurance intermediaries should ensure that the detection and management of sustainability risks is sufficiently integrated into their due diligence processes and investment decision-making, so that investors are required to avoid or mitigate ESG factors, explain them and publish them in written form on their websites.

The Commission would adopt delegated acts to lay down a comprehensive and mandatory framework setting out minimum standards for written policies and due diligence processes, as well as guidance on disclosure requirements and on how to the proportionality principle is to be applied.

Transparency in periodical reports: financial market participants offering financial products or services should provide a description in audited and integrated reports, conducted at least annually and containing both financial and non-financial information, the overall impact and performance of the financial product or service in terms of sustainability, using harmonised and comparable sustainability risk indicators .

Publicly traded companies should include in their annual financial statements and consolidated financial statements a description of how they have integrated sustainability performance and risks into their management processes and investment strategy.

The amended text invites the European Banking Authority (EBA) to investigate the feasibility and appropriateness of introducing technical criteria for the Supervisory Review and Evaluation Process (SREP) of risks related to exposures to activities associated mainly with environmental, social and governance (ESG) objectives.

Documents
2018/11/05
   EP - Vote in committee, 1st reading
2018/11/05
   EP - Committee decision to open interinstitutional negotiations with report adopted in committee
2018/10/17
   ESC - Economic and Social Committee: opinion, report
Documents
2018/10/11
   EP - Committee opinion
Documents
2018/10/03
   ES_PARLIAMENT - Contribution
Documents
2018/09/17
   EP - Amendments tabled in committee
Documents
2018/08/02
   EP - Committee draft report
Documents
2018/07/05
   EP - Committee referral announced in Parliament, 1st reading
2018/06/21
   EP - VĂLEAN Adina-Ioana (PPE) appointed as rapporteur in ENVI
2018/05/31
   EP - TANG Paul (S&D) appointed as rapporteur in ECON
2018/05/24
   EC - Legislative proposal
Details

PURPOSE: to strengthen the protection for end-investors and improve the disclosure of information on sustainable investments to them.

PROPOSED ACT: Council Directive.

ROLE OF THE EUROPEAN PARLIAMENT: the Council adopts the act after consulting the European Parliament but without being obliged to follow its opinion.

BACKGROUND: in the absence of harmonised Union rules on sustainability-related disclosures to end-investors, it is likely that diverging measures will continue to be adopted at national level and different approaches in different financial services sectors might persist.

In ensuring compliance with the Paris Climate Agreement, Member States are likely to adopt divergent national measures which could create obstacles to the smooth functioning of the internal market and be detrimental to financial market participants and financial advisors.

This proposal is part of a wider Commission initiative on sustainable development. It aims to bring institutional investors (management companies of undertakings for collective investment in transferable securities (UCITS), alternative investment fund managers (FIA), insurance companies, institutions for occupational retirement provision (IORP), European venture capital fund managers (EuVECA), European social entrepreneurship fund managers (EuSEF) and investment firms) to integrate environmental, social and governance (ESG) criteria into their internal processes and to inform their clients.

The proposal is presented in parallel with a proposal to help investors compare the carbon footprint of investments.

This should ensure that financial market participants — undertakings for collective investment in transferable securities (UCITS) management companies, alternative investment fund managers (AIFMs), insurance undertakings, institutions for occupational retirement provision (IORPs), European venture capital fund (EuVECA) managers, European social entrepreneurship funds (EuSEF) managers and investment firms - that receive a mandate from their clients or beneficiaries to take investment decisions on their behalf would integrate environmental, social and governance (ESG) considerations into their internal processes and inform their clients in this respect .

The proposal is presented in parallel with a proposal to help investors compare the carbon footprint of investments.

IMPACT ASSESSMENT: a clear and coherent approach on integration of ESG risks would have the following economic impacts: end-investors will have more information on how financial market participants and financial advisors integrate ESG risks in their investment decision-making or advisory processes. ESG risks would be more systematically taken into account in financial modelling, leading to an optimal risk-return trade-off at least in the long-term, thereby fostering market efficiency. This will encourage financial market participants and financial advisors to be innovative in investment strategies or in their recommendations.

CONTENT: the proposed Regulation establishes harmonised rules on transparency to be applied by financial market participants , by insurance intermediaries providing advice on insurance-based investment products and by financial advisers in relation to:

the integration of sustainability risks in their investment decision-making processes or, where relevant, advisory processes; transparency as regards financial products which target sustainable investments, including reduction in carbon emissions.

The term ‘sustainable investments’ covers: (i) investments in an economic activity that contributes to an environmental objective; (ii) investments in an economic activity that contributes to a social objective, and in particular an investment that contributes to tackling inequality, an investment fostering social cohesion, social integration and labour relations, or an investment in human capital or economically or socially disadvantaged communities; (iii) investments in companies following good governance practices, and in particular companies with sound management structures, employee relations, remuneration of relevant staff and tax compliance.

Specifically, the proposal:

requires financial market participants to publish written policies on the integration of sustainability risks in investment decision making process; obliges financial market participants to publish them on their websites and maintain the policies up-to-date. This obligation also extends to financial advisors. obliges financial market participants and financial advisors market financial products or services claim that such products or services pursue sustainable investment objectives, obliging them to disclose information on the contribution of the investment decisions to the sustainable investment objectives (ex-post disclosure in regular reporting); provides that financial market participants and financial advisors must ensure that marketing communications do not contradict the information disclosed pursuant to this Regulation.

This proposal amends Directive (EU) 2016/2341 . It empowerments the Commission to adopt delegated acts specifying the ‘prudent person’ rule with respect to the consideration of ESG risks and the inclusion of ESG factors in internal investment decisions and risk management processes.

2018/05/24
   EC - Document attached to the procedure
2018/05/24
   EC - Document attached to the procedure

Documents

Votes

A8-0363/2018 - Paul Tang - Am 2 18/04/2019 12:28:27.000 #

2019/04/18 Outcome: +: 449, 0: 51, -: 51
DE FR IT ES GB RO BE PT NL BG AT CZ SE FI HU HR SK LV DK LU LT MT EE IE SI PL EL
Total
76
66
42
40
49
23
21
18
25
13
16
14
14
11
12
9
9
7
11
6
6
5
4
6
4
40
2
icon: PPE PPE
152

Italy PPE

1

United Kingdom PPE

Against (1)

2

Denmark PPE

For (1)

1

Luxembourg PPE

3

Lithuania PPE

2

Estonia PPE

For (1)

1

Ireland PPE

3

Slovenia PPE

2
icon: S&D S&D
135

Netherlands S&D

3

Czechia S&D

For (1)

1

Hungary S&D

For (1)

1

Croatia S&D

For (1)

1

Slovakia S&D

2

Latvia S&D

1

Luxembourg S&D

For (1)

1

Malta S&D

2

Estonia S&D

For (1)

1

Slovenia S&D

For (1)

1
icon: ALDE ALDE
58

Italy ALDE

For (1)

1

Romania ALDE

For (1)

1

Portugal ALDE

1

Bulgaria ALDE

3

Austria ALDE

For (1)

1

Sweden ALDE

2

Croatia ALDE

2

Latvia ALDE

1

Denmark ALDE

2

Luxembourg ALDE

For (1)

1

Lithuania ALDE

1

Estonia ALDE

2

Ireland ALDE

For (1)

1

Slovenia ALDE

For (1)

1
icon: Verts/ALE Verts/ALE
45

Italy Verts/ALE

For (1)

1

United Kingdom Verts/ALE

4

Belgium Verts/ALE

2

Netherlands Verts/ALE

1

Austria Verts/ALE

2

Sweden Verts/ALE

3

Finland Verts/ALE

For (1)

1

Hungary Verts/ALE

2

Croatia Verts/ALE

For (1)

1

Latvia Verts/ALE

1

Denmark Verts/ALE

For (1)

1

Luxembourg Verts/ALE

For (1)

1

Lithuania Verts/ALE

For (1)

1
icon: ECR ECR
60
2

Romania ECR

For (1)

Against (1)

2

Netherlands ECR

2

Bulgaria ECR

1

Czechia ECR

2

Sweden ECR

2

Finland ECR

1

Croatia ECR

For (1)

1

Slovakia ECR

2

Greece ECR

Against (1)

1
icon: EFDD EFDD
28

Germany EFDD

Against (1)

1

Czechia EFDD

Against (1)

1
icon: NI NI
10

Germany NI

2

France NI

Against (1)

Abstain (1)

2

Hungary NI

Abstain (1)

3

Poland NI

Against (1)

2

Greece NI

1
icon: GUE/NGL GUE/NGL
33

Italy GUE/NGL

3

United Kingdom GUE/NGL

Abstain (1)

1

Portugal GUE/NGL

3

Netherlands GUE/NGL

3

Czechia GUE/NGL

Abstain (1)

1

Sweden GUE/NGL

Abstain (1)

1

Denmark GUE/NGL

Abstain (1)

1

Ireland GUE/NGL

2
icon: ENF ENF
28

Germany ENF

Abstain (1)

1

Belgium ENF

Against (1)

1

Netherlands ENF

4

Austria ENF

3

Poland ENF

2

A8-0363/2018 - Paul Tang - Am 2 #

2019/04/18 Outcome: +: 449, 0: 51, -: 51
DE FR IT ES GB RO BE PT NL BG AT CZ FI HU SE HR SK LV DK LU LT MT EE IE SI PL ?? EL
Total
76
67
42
39
48
23
21
18
25
13
16
14
11
12
13
9
9
7
11
6
6
5
4
6
4
40
1
2
icon: PPE PPE
152

Italy PPE

1

United Kingdom PPE

Against (1)

2

Denmark PPE

For (1)

1

Luxembourg PPE

3

Lithuania PPE

2

Estonia PPE

For (1)

1

Ireland PPE

3

Slovenia PPE

2
icon: S&D S&D
136

Netherlands S&D

3

Czechia S&D

For (1)

1

Hungary S&D

For (1)

1

Croatia S&D

For (1)

1

Slovakia S&D

2

Latvia S&D

1

Luxembourg S&D

For (1)

1

Malta S&D

2

Estonia S&D

For (1)

1

Slovenia S&D

For (1)

1

S&D

For (1)

1
icon: ALDE ALDE
57

Italy ALDE

For (1)

1

Romania ALDE

For (1)

1

Portugal ALDE

1

Bulgaria ALDE

3

Austria ALDE

For (1)

1

Sweden ALDE

2

Croatia ALDE

2

Latvia ALDE

1

Denmark ALDE

2

Luxembourg ALDE

For (1)

1

Lithuania ALDE

1

Estonia ALDE

2

Ireland ALDE

For (1)

1

Slovenia ALDE

For (1)

1
icon: Verts/ALE Verts/ALE
43

Italy Verts/ALE

For (1)

1

United Kingdom Verts/ALE

4

Belgium Verts/ALE

2

Netherlands Verts/ALE

1

Austria Verts/ALE

2

Finland Verts/ALE

For (1)

1

Hungary Verts/ALE

2

Sweden Verts/ALE

2

Croatia Verts/ALE

For (1)

1

Latvia Verts/ALE

1

Denmark Verts/ALE

For (1)

1

Luxembourg Verts/ALE

For (1)

1

Lithuania Verts/ALE

For (1)

1
icon: ECR ECR
60
2

Romania ECR

For (1)

Against (1)

2

Netherlands ECR

2

Bulgaria ECR

1

Czechia ECR

2

Finland ECR

1

Sweden ECR

2

Croatia ECR

For (1)

1

Slovakia ECR

2

Greece ECR

Against (1)

1
icon: EFDD EFDD
28

Germany EFDD

Against (1)

1

Czechia EFDD

Against (1)

1
icon: NI NI
10

Germany NI

2

France NI

Against (1)

Abstain (1)

2

Hungary NI

Abstain (1)

3

Poland NI

Against (1)

2

Greece NI

1
icon: GUE/NGL GUE/NGL
33

Italy GUE/NGL

3

United Kingdom GUE/NGL

Abstain (1)

1

Portugal GUE/NGL

3

Netherlands GUE/NGL

3

Czechia GUE/NGL

Abstain (1)

1

Sweden GUE/NGL

Abstain (1)

1

Denmark GUE/NGL

Abstain (1)

1

Ireland GUE/NGL

2
icon: ENF ENF
29

Germany ENF

Abstain (1)

1

Belgium ENF

Against (1)

1

Netherlands ENF

4

Austria ENF

3

Poland ENF

2
AmendmentsDossier
271 2018/0179(COD)
2018/09/05 ENVI 72 amendments...
source: 627.577
2018/09/18 ECON 199 amendments...
source: 627.830

History

(these mark the time of scraping, not the official date of the change)

committees/0/shadows/3
name
CARTHY Matt
group
European United Left - Nordic Green Left
abbr
GUE/NGL
docs/0
date
2018-05-24T00:00:00
docs
title: SWD(2018)0264
type
Document attached to the procedure
body
EC
docs/0
date
2018-05-24T00:00:00
docs
summary
type
Legislative proposal
body
EC
docs/1
date
2018-05-24T00:00:00
docs
title: SWD(2018)0264
type
Document attached to the procedure
body
EC
docs/1/docs/0
url
https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=SWD:2018:0264:FIN:EN:PDF
title
EUR-Lex
docs/2
date
2018-08-02T00:00:00
docs
title: PE626.716
type
Committee draft report
body
EP
docs/2/docs/0/url
http://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&mode=XML&language=EN&reference=PE626.716
docs/3
date
2018-08-02T00:00:00
docs
title: PE626.716
type
Committee draft report
body
EP
docs/3
date
2018-09-17T00:00:00
docs
title: PE627.830
type
Amendments tabled in committee
body
EP
docs/3/docs/0/url
http://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&mode=XML&language=EN&reference=PE627.830
docs/4
date
2018-09-17T00:00:00
docs
title: PE627.830
type
Amendments tabled in committee
body
EP
docs/4
date
2018-10-11T00:00:00
docs
title: PE628.607
committee
ENVI
type
Committee opinion
body
EP
docs/4/docs/0/url
http://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&mode=XML&language=EN&reference=PE628.607
docs/5
date
2018-10-11T00:00:00
docs
title: PE628.607
committee
ENVI
type
Committee opinion
body
EP
docs/5
date
2018-10-17T00:00:00
docs
title: CES2766/2018
type
Economic and Social Committee: opinion, report
body
ESC
docs/6
date
2018-10-17T00:00:00
docs
title: CES2766/2018
type
Economic and Social Committee: opinion, report
body
ESC
docs/6/docs/0/url
https://dmsearch.eesc.europa.eu/search/public?k=(documenttype:AC)(documentnumber:2766)(documentyear:2018)(documentlanguage:EN)
events/0
date
2018-07-05T00:00:00
type
Committee referral announced in Parliament, 1st reading/single reading
body
EP
events/0
date
2018-05-24T00:00:00
type
Legislative proposal published
body
EC
docs
summary
events/0/type
Old
Committee referral announced in Parliament, 1st reading/single reading
New
Committee referral announced in Parliament, 1st reading
events/1
date
2018-07-05T00:00:00
type
Committee referral announced in Parliament, 1st reading/single reading
body
EP
events/1
date
2018-11-05T00:00:00
type
Vote in committee, 1st reading/single reading
body
EP
events/1/type
Old
Vote in committee, 1st reading/single reading
New
Vote in committee, 1st reading
events/2
date
2018-11-05T00:00:00
type
Vote in committee, 1st reading/single reading
body
EP
events/3
date
2018-11-09T00:00:00
type
Committee report tabled for plenary, 1st reading
body
EP
docs
url: https://www.europarl.europa.eu/doceo/document/A-8-2018-0363_EN.html title: A8-0363/2018
summary
events/4
date
2018-11-12T00:00:00
type
Committee decision to enter into interinstitutional negotiations announced in plenary (Rule 71)
body
EP
events/4
date
2018-11-09T00:00:00
type
Committee report tabled for plenary, 1st reading/single reading
body
EP
docs
url: http://www.europarl.europa.eu/doceo/document/A-8-2018-0363_EN.html title: A8-0363/2018
summary
events/5
date
2018-11-14T00:00:00
type
Committee decision to enter into interinstitutional negotiations confirmed by plenary (Rule 71)
body
EP
events/7
date
2019-04-18T00:00:00
type
Debate in Parliament
body
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  • date: 2018-07-05T00:00:00 body: EP type: Committee referral announced in Parliament, 1st reading/single reading committees: body: EP shadows: group: EPP name: PIETIKÄINEN Sirpa group: ECR name: KAMALL Syed group: ALDE name: WIERINCK Lieve group: GUE/NGL name: CARTHY Matt group: Verts/ALE name: SCOTT CATO Molly responsible: True committee: ECON date: 2018-05-31T00:00:00 committee_full: Economic and Monetary Affairs rapporteur: group: S&D name: TANG Paul body: EP responsible: False committee_full: Employment and Social Affairs committee: EMPL body: EP responsible: False committee: ENVI date: 2018-06-21T00:00:00 committee_full: Environment, Public Health and Food Safety rapporteur: group: EPP name: VĂLEAN Adina-Ioana body: EP responsible: False committee_full: Women’s Rights and Gender Equality committee: FEMM
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docs
  • date: 2018-05-24T00:00:00 docs: title: SWD(2018)0264 type: Document attached to the procedure body: EC
  • date: 2018-05-24T00:00:00 docs: url: https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=SWD:2018:0265:FIN:EN:PDF title: EUR-Lex title: SWD(2018)0265 type: Document attached to the procedure body: EC
  • date: 2018-08-02T00:00:00 docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&mode=XML&language=EN&reference=PE626.716 title: PE626.716 type: Committee draft report body: EP
  • date: 2018-09-17T00:00:00 docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&mode=XML&language=EN&reference=PE627.830 title: PE627.830 type: Amendments tabled in committee body: EP
  • date: 2018-10-11T00:00:00 docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=COMPARL&mode=XML&language=EN&reference=PE628.607&secondRef=01 title: PE628.607 committee: ENVI type: Committee opinion body: EP
  • date: 2018-10-17T00:00:00 docs: title: CES2766/2018 type: Economic and Social Committee: opinion, report body: ESC
  • date: 2019-03-27T00:00:00 docs: url: http://www.europarl.europa.eu/RegData/commissions/econ/lcag/2019/03-27/ECON_LA(2019)002927_EN.pdf title: GEDA/A/(2019)002927 type: Coreper letter confirming interinstitutional agreement body: CSL
  • date: 2018-10-03T00:00:00 docs: url: http://www.connefof.europarl.europa.eu/connefof/app/exp/COM(2018)0354 title: COM(2018)0354 type: Contribution body: ES_PARLIAMENT
events
  • date: 2018-05-24T00:00:00 type: Legislative proposal published body: EC docs: url: http://www.europarl.europa.eu/RegData/docs_autres_institutions/commission_europeenne/com/2018/0354/COM_COM(2018)0354_EN.docx title: COM(2018)0354 url: https://eur-lex.europa.eu/smartapi/cgi/sga_doc?smartapi!celexplus!prod!DocNumber&lg=EN&type_doc=COMfinal&an_doc=2018&nu_doc=0354 title: EUR-Lex summary: PURPOSE: to strengthen the protection for end-investors and improve the disclosure of information on sustainable investments to them. PROPOSED ACT: Council Directive. ROLE OF THE EUROPEAN PARLIAMENT: the Council adopts the act after consulting the European Parliament but without being obliged to follow its opinion. BACKGROUND: in the absence of harmonised Union rules on sustainability-related disclosures to end-investors, it is likely that diverging measures will continue to be adopted at national level and different approaches in different financial services sectors might persist. In ensuring compliance with the Paris Climate Agreement, Member States are likely to adopt divergent national measures which could create obstacles to the smooth functioning of the internal market and be detrimental to financial market participants and financial advisors. This proposal is part of a wider Commission initiative on sustainable development. It aims to bring institutional investors (management companies of undertakings for collective investment in transferable securities (UCITS), alternative investment fund managers (FIA), insurance companies, institutions for occupational retirement provision (IORP), European venture capital fund managers (EuVECA), European social entrepreneurship fund managers (EuSEF) and investment firms) to integrate environmental, social and governance (ESG) criteria into their internal processes and to inform their clients. The proposal is presented in parallel with a proposal to help investors compare the carbon footprint of investments. This should ensure that financial market participants — undertakings for collective investment in transferable securities (UCITS) management companies, alternative investment fund managers (AIFMs), insurance undertakings, institutions for occupational retirement provision (IORPs), European venture capital fund (EuVECA) managers, European social entrepreneurship funds (EuSEF) managers and investment firms - that receive a mandate from their clients or beneficiaries to take investment decisions on their behalf would integrate environmental, social and governance (ESG) considerations into their internal processes and inform their clients in this respect . The proposal is presented in parallel with a proposal to help investors compare the carbon footprint of investments. IMPACT ASSESSMENT: a clear and coherent approach on integration of ESG risks would have the following economic impacts: end-investors will have more information on how financial market participants and financial advisors integrate ESG risks in their investment decision-making or advisory processes. ESG risks would be more systematically taken into account in financial modelling, leading to an optimal risk-return trade-off at least in the long-term, thereby fostering market efficiency. This will encourage financial market participants and financial advisors to be innovative in investment strategies or in their recommendations. CONTENT: the proposed Regulation establishes harmonised rules on transparency to be applied by financial market participants , by insurance intermediaries providing advice on insurance-based investment products and by financial advisers in relation to: the integration of sustainability risks in their investment decision-making processes or, where relevant, advisory processes; transparency as regards financial products which target sustainable investments, including reduction in carbon emissions. The term ‘sustainable investments’ covers: (i) investments in an economic activity that contributes to an environmental objective; (ii) investments in an economic activity that contributes to a social objective, and in particular an investment that contributes to tackling inequality, an investment fostering social cohesion, social integration and labour relations, or an investment in human capital or economically or socially disadvantaged communities; (iii) investments in companies following good governance practices, and in particular companies with sound management structures, employee relations, remuneration of relevant staff and tax compliance. Specifically, the proposal: requires financial market participants to publish written policies on the integration of sustainability risks in investment decision making process; obliges financial market participants to publish them on their websites and maintain the policies up-to-date. This obligation also extends to financial advisors. obliges financial market participants and financial advisors market financial products or services claim that such products or services pursue sustainable investment objectives, obliging them to disclose information on the contribution of the investment decisions to the sustainable investment objectives (ex-post disclosure in regular reporting); provides that financial market participants and financial advisors must ensure that marketing communications do not contradict the information disclosed pursuant to this Regulation. This proposal amends Directive (EU) 2016/2341 . It empowerments the Commission to adopt delegated acts specifying the ‘prudent person’ rule with respect to the consideration of ESG risks and the inclusion of ESG factors in internal investment decisions and risk management processes.
  • date: 2018-07-05T00:00:00 type: Committee referral announced in Parliament, 1st reading/single reading body: EP
  • date: 2018-11-05T00:00:00 type: Vote in committee, 1st reading/single reading body: EP
  • date: 2018-11-05T00:00:00 type: Committee decision to open interinstitutional negotiations with report adopted in committee body: EP
  • date: 2018-11-09T00:00:00 type: Committee report tabled for plenary, 1st reading/single reading body: EP docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=REPORT&mode=XML&reference=A8-2018-0363&language=EN title: A8-0363/2018 summary: The Committee on Economic and Monetary Affairs adopted the report by Paul TANG (S&D, NL) on the proposal for a regulation of the European Parliament and of the Council on disclosures relating to sustainable investments and sustainability risks and amending Directive (EU) 2016/2341. The committee recommended that the European Parliament's position adopted at first reading under the ordinary legislative procedure should amend the Commission's proposal as follows. Objectives: the proposed Regulation would establish harmonised rules on transparency to be applied by financial market participants, insurance intermediaries providing advice on insurance-based investment products, investment firms providing investment advice and end-investors concerning: the integration of sustainability risks and performance into investment decision-making or advisory processes; and the transparency of financial products or services , whether or not they have a targeted sustainability impact. The objectives of the Regulation would be to (i) strengthen end-investor protection and investor information, (ii) improve disclosure and broaden their investment choices, and (iii) help financial market participants, investment advisors and publicly traded companies to integrate environmental, social and governance risks (ESG factors) into their investment decisions. Definitions: It is proposed to introduce a clear and harmonised definition of the concepts of "sustainable investments" and "sustainability risks" avoiding any overlap where not in line with the principles of better regulation and proportionality. Sustainable investments would be defined as products associated with strategies to generate environmental, social and governance benefits , including one or a combination of the following investment categories: investments in an economic activity that significantly contributes to an environmental objective, including key resource efficiency indicators, such as use of energy, use of renewable energy, use of raw materials, production of waste, emissions, CO2 emissions, use of water, use of land and impact on biodiversity; investments in an economic activity that contributes significantly to a social objective, investments that promote or support good governance practices in companies, and in particular companies with sound and transparent management structures and due diligence procedures, employee relations, transparent remuneration policies of relevant staff and tax compliance. Transparency regarding sustainability risk policies: the amended text requires financial market participants, insurance intermediaries providing insurance advice on insurance-based investment products and investment firms providing investment advice to adopt due diligence policies for sustainability risk assessment and to communicate them annually to the competent authorities. A brief summary of these policies would be made public, while respecting confidentiality and protecting know-how and trade secrets. The disclosure requirement would be proportionate to the size and systemic importance of the entity. Credit institutions and insurance companies should also have policies in place to integrate sustainability risks into their investment and credit risk management processes. Financial market participants and insurance intermediaries should ensure that the detection and management of sustainability risks is sufficiently integrated into their due diligence processes and investment decision-making, so that investors are required to avoid or mitigate ESG factors, explain them and publish them in written form on their websites. The Commission would adopt delegated acts to lay down a comprehensive and mandatory framework setting out minimum standards for written policies and due diligence processes, as well as guidance on disclosure requirements and on how to the proportionality principle is to be applied. Transparency in periodical reports: financial market participants offering financial products or services should provide a description in audited and integrated reports, conducted at least annually and containing both financial and non-financial information, the overall impact and performance of the financial product or service in terms of sustainability, using harmonised and comparable sustainability risk indicators . Publicly traded companies should include in their annual financial statements and consolidated financial statements a description of how they have integrated sustainability performance and risks into their management processes and investment strategy. The amended text invites the European Banking Authority (EBA) to investigate the feasibility and appropriateness of introducing technical criteria for the Supervisory Review and Evaluation Process (SREP) of risks related to exposures to activities associated mainly with environmental, social and governance (ESG) objectives.
  • date: 2019-04-01T00:00:00 type: Approval in committee of the text agreed at 1st reading interinstitutional negotiations body: EP docs: url: http://www.europarl.europa.eu/RegData/commissions/econ/inag/2019/03-27/ECON_AG(2019)637263_EN.pdf title: PE637.263 url: http://www.europarl.europa.eu/RegData/commissions/econ/lcag/2019/03-27/ECON_LA(2019)002927_EN.pdf title: GEDA/A/(2019)002927
  • date: 2019-04-18T00:00:00 type: Debate in Parliament body: EP docs: url: http://www.europarl.europa.eu/sides/getDoc.do?secondRef=TOC&language=EN&reference=20190418&type=CRE title: Debate in Parliament
  • date: 2019-04-18T00:00:00 type: Decision by Parliament, 1st reading/single reading body: EP docs: url: http://www.europarl.europa.eu/sides/getDoc.do?type=TA&language=EN&reference=P8-TA-2019-0435 title: T8-0435/2019 summary: The European Parliament adopted by 508 votes to 24, with 19 abstentions, a legislative resolution on the proposal for a regulation of the European Parliament and of the Council on disclosures relating to sustainable investments and sustainability risks and amending Directive (EU) 2016/2341. The European Parliament’s position adopted at first reading under the ordinary legislative procedure amended the Commission proposal as follows: Transparency obligations for the publication of sustainability information The amended Regulation lays down the obligation on the financial market participants and financial advisers which provide investment advice or insurance advice with regard to IBIPs respectively, regardless the design of the financial products and the target market, to publish written policies on the integration of sustainability risks and ensure the transparency of the integration of sustainability risks. The Regulation shall maintain the requirements for financial market participants and financial advisors to act in the best interests of investors by exercising due diligence before making the investment. It would also require financial market participants to integrate into their procedures and continuously assess not only all relevant financial risks, but also all sustainability risks that could have a significant negative impact on the financial performance of an investment and an advisory, respectively. Therefore, under the proposed Regulation, financial market participants and financial advisors shall specify in their policies how they integrate these risks and publish these policies. Where they do not take into account the adverse impacts of investment decisions on sustainability factors, they shall publish on their website clear information on why they do not, including, where appropriate, information on whether and when they intend to take these negative impacts into account. The proposed Regulation also requires financial market participants to: - include in their remuneration policies information on how their remuneration policies are consistent with the integration of sustainability risks and publish this information on their website; - include in the published pre-contractual information how sustainability risks are integrated into their investment decisions and the result of the assessment of the likely impact of sustainability risks on the performance of financial products; - publish information on how environmental or social characteristics are respected when a financial product promotes, among other characteristics, environmental or social characteristics, or a combination of these characteristics; - publish, where a financial product aims to reduce carbon emissions, information including the low-carbon exposure target for achieving the long-term global warming targets set by the Paris Climate Agreement; - publish information on the methodologies used to assess, measure and monitor the environmental or social characteristics or impact of the sustainable investments selected for the financial product, including data sources; - describe, in particular in the periodic reports, the overall sustainability impact of the financial product, using relevant sustainability indicators. Competent authorities Each Member State shall ensure that the competent authorities designated in accordance with sectoral legislation, also monitor compliance with requirements placed by this Regulation on financial market participants and financial advisers. The competent authorities shall have all the supervisory and investigatory powers that are necessary for the exercise of their functions under this Regulation. Exemptions This Regulation shall not apply to insurance intermediaries which provide insurance advice with regard to IBIPs and investment firms which provide investment advice that are enterprises irrespective of their legal form, including natural persons or self-employed persons, provided that they employ fewer than three persons.
links/Research document
title
Briefing
url
http://www.europarl.europa.eu/thinktank/en/document.html?reference=EPRS_BRI(2019)635572
other
  • body: EC dg: url: http://ec.europa.eu/info/departments/financial-stability-financial-services-and-capital-markets-union_en title: Financial Stability, Financial Services and Capital Markets Union commissioner: DOMBROVSKIS Valdis
otherinst
  • name: European Economic and Social Committee
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European Economic and Social Committee
procedure/Modified legal basis
Rules of Procedure EP 159
procedure/Notes
  • 14/11/2018 Decision to enter into interinstitutional negotiations confirmed by plenary (Rule 69c)
procedure/dossier_of_the_committee
Old
ECON/8/13229
New
  • ECON/8/13229
procedure/instrument
Old
Regulation
New
  • Regulation
  • Amending Directive (EU) 2016/2341 2014/0091(COD) See also 2018/0178(COD) See also 2018/0180(COD)
procedure/other_consulted_institutions
European Economic and Social Committee
procedure/stage_reached
Old
Awaiting committee decision
New
Provisional agreement between Parliament and Council on final act
procedure/subject
Old
  • 2.50.03 Securities and financial markets, stock exchange, CIUTS, investments
  • 3.70.20 Sustainable development
New
2.50.03
Securities and financial markets, stock exchange, CIUTS, investments
3.70.20
Sustainable development
procedure/summary
  • Amending Directive (EU) 2016/2341
  • See also
  • See also
activities/1/committees/0/shadows/4
group
Verts/ALE
name
SCOTT CATO Molly
committees/0/shadows/4
group
Verts/ALE
name
SCOTT CATO Molly
activities/0/docs/0/text
  • PURPOSE: to strengthen the protection for end-investors and improve the disclosure of information on sustainable investments to them.

    PROPOSED ACT: Council Directive.

    ROLE OF THE EUROPEAN PARLIAMENT: the Council adopts the act after consulting the European Parliament but without being obliged to follow its opinion.

    BACKGROUND: in the absence of harmonised Union rules on sustainability-related disclosures to end-investors, it is likely that diverging measures will continue to be adopted at national level and different approaches in different financial services sectors might persist.

    In ensuring compliance with the Paris Climate Agreement, Member States are likely to adopt divergent national measures which could create obstacles to the smooth functioning of the internal market and be detrimental to financial market participants and financial advisors.

    This proposal is part of a wider Commission initiative on sustainable development. It aims to bring institutional investors (management companies of undertakings for collective investment in transferable securities (UCITS), alternative investment fund managers (FIA), insurance companies, institutions for occupational retirement provision (IORP), European venture capital fund managers (EuVECA), European social entrepreneurship fund managers (EuSEF) and investment firms) to integrate environmental, social and governance (ESG) criteria into their internal processes and to inform their clients.

    The proposal is presented in parallel with a proposal to help investors compare the carbon footprint of investments.

    This should ensure that financial market participants — undertakings for collective investment in transferable securities (UCITS) management companies, alternative investment fund managers (AIFMs), insurance undertakings, institutions for occupational retirement provision (IORPs), European venture capital fund (EuVECA) managers, European social entrepreneurship funds (EuSEF) managers and investment firms - that receive a mandate from their clients or beneficiaries to take investment decisions on their behalf would integrate environmental, social and governance (ESG) considerations into their internal processes and inform their clients in this respect.

    The proposal is presented in parallel with a proposal to help investors compare the carbon footprint of investments.

    IMPACT ASSESSMENT: a clear and coherent approach on integration of ESG risks would have the following economic impacts: end-investors will have more information on how financial market participants and financial advisors integrate ESG risks in their investment decision-making or advisory processes. ESG risks would be more systematically taken into account in financial modelling, leading to an optimal risk-return trade-off at least in the long-term, thereby fostering market efficiency. This will encourage financial market participants and financial advisors to be innovative in investment strategies or in their recommendations.

    CONTENT: the proposed Regulation establishes harmonised rules on transparency to be applied by financial market participants, by insurance intermediaries providing advice on insurance-based investment products and by financial advisers in relation to:

    • the integration of sustainability risks in their investment decision-making processes or, where relevant, advisory processes;
    • transparency as regards financial products which target sustainable investments, including reduction in carbon emissions.

    The term ‘sustainable investments’ covers: (i) investments in an economic activity that contributes to an environmental objective; (ii) investments in an economic activity that contributes to a social objective, and in particular an investment that contributes to tackling inequality, an investment fostering social cohesion, social integration and labour relations, or an investment in human capital or economically or socially disadvantaged communities; (iii) investments in companies following good governance practices, and in particular companies with sound management structures, employee relations, remuneration of relevant staff and tax compliance.

    Specifically, the proposal:

    • requires financial market participants to publish written policies on the integration of sustainability risks in investment decision making process;
    • obliges financial market participants to publish them on their websites and maintain the policies up-to-date. This obligation also extends to financial advisors.
    • obliges financial market participants and financial advisors market financial products or services claim that such products or services pursue sustainable investment objectives, obliging them to disclose information on the contribution of the investment decisions to the sustainable investment objectives (ex-post disclosure in regular reporting);
    • provides that financial market participants and financial advisors must ensure that marketing communications do not contradict the information disclosed pursuant to this Regulation.

    This proposal amends Directive (EU) 2016/2341. It empowerments the Commission to adopt delegated acts specifying the ‘prudent person’ rule with respect to the consideration of ESG risks and the inclusion of ESG factors in internal investment decisions and risk management processes.

activities/1
date
2018-07-05T00:00:00
body
EP
type
Committee referral announced in Parliament, 1st reading/single reading
committees
procedure/dossier_of_the_committee
ECON/8/13229
procedure/stage_reached
Old
Preparatory phase in Parliament
New
Awaiting committee decision
procedure/Mandatory consultation of other institutions
European Economic and Social Committee
committees/0/shadows/0
group
EPP
name
PIETIKÄINEN Sirpa
committees/2/date
2018-06-21T00:00:00
committees/2/rapporteur
  • group: EPP name: VĂLEAN Adina-Ioana
committees/0/date
2018-05-31T00:00:00
committees/0/rapporteur
  • group: S&D name: TANG Paul
procedure/summary/2
See also
committees/0/shadows/1
group
ALDE
name
WIERINCK Lieve
activities/0/commission/0
DG
Commissioner
DOMBROVSKIS Valdis
committees/0/shadows
  • group: ECR name: KAMALL Syed
  • group: GUE/NGL name: CARTHY Matt
other/0
body
EC
dg
commissioner
DOMBROVSKIS Valdis
activities
  • date: 2018-05-24T00:00:00 docs: url: http://www.europarl.europa.eu/RegData/docs_autres_institutions/commission_europeenne/com/2018/0354/COM_COM(2018)0354_EN.docx celexid: CELEX:52018PC0354:EN type: Legislative proposal published title: COM(2018)0354 body: EC commission: type: Legislative proposal published
committees
  • body: EP responsible: True committee_full: Economic and Monetary Affairs committee: ECON
  • body: EP responsible: False committee_full: Employment and Social Affairs committee: EMPL
  • body: EP responsible: False committee_full: Environment, Public Health and Food Safety committee: ENVI
  • body: EP responsible: False committee_full: Women’s Rights and Gender Equality committee: FEMM
links
other
    procedure
    reference
    2018/0179(COD)
    instrument
    Regulation
    legal_basis
    Treaty on the Functioning of the EU TFEU 114
    stage_reached
    Preparatory phase in Parliament
    summary
    Amending Directive (EU) 2016/2341
    subtype
    Legislation
    title
    Disclosures relating to sustainable investments and sustainability risks
    type
    COD - Ordinary legislative procedure (ex-codecision procedure)
    subject