Andreas Rasche

Lots of things happening in 2025 and beyond on sustainability and ESG regulation. If you are interested in the EU Green Deal regulations, keep your eyes on...

➡️ ...the EU's “Competitiveness Compass“ which is delayed slightly (it was due on 15 Jan). This Compass is key for the Green Deal regulations as it sets out the broader “economic doctrine for the next five years“, as Commission Executive Vice President Stéphane Séjourné recently put it (https://lnkd.in/dQTAB4T7).

➡️ ... the proposed “Clean Industrial Deal“ (planned for 26 February). Together with the Competitiveness Compass, this new Deal will set the context for many of the EU's sustainability actions in the next five years. In essence, this new framework will merge sustainability and competitiveness concerns, as argued for by the Draghi Report in 2024.

➡️ ... the planned “Omnibus Simplification Package“, with a proposal likely by 26 February. The omnibus is supposed to amend key EU regulations with the aim to reduce firms' reporting requirements (e.g., related to #CSRD and the #EUTaxonomy).

The Commission will publish its 2025 Work Programm on 11 February. This Programme will give further clues on where the journey goes. Thanks to ESG Book for the great overview of other key deadlines...

#esg, #sustainability, #eugreendeal

The European Council unanimously approved the new ESG ratings regulation. This was the final legal step. The regulation will now be published and then apply 18 months after publication (so in 2026).

1️⃣ ESG rating providers will be authorised and supervised by the European Securities and Markets Authority (ESMA) and must comply with transparency requirements, as a minimum disclosing “the methodology, models, and key rating assumptions.“

2️⃣ Rating providers' different business activities need to be separated, but regulators leave a backdoor open: no separate legal entities need to be created if raters can show that activities are separated and no conflicts of interest exist.

3️⃣ Separate E, S, and G ratings should be provided. If a single ESG rating is provided, rating providers need to disclose the rate and weight attributed to each dimension.

4️⃣ If ESMA finds that a rater has intentionally or negligently infringed the Regulation, it should adopt a fine (max 10% of total annual net turnover).

At the same time, the UK regulator has also released and updated draft legislation to regulate ESG ratings. Good to see that the market, which some described as the “Wild West“, is getting some more transparency requirements...

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EU Regulation (final text): https://lnkd.in/dU-PbiiG
UK Regulation (draft text): https://lnkd.in/duQRJc-G
#sustainability, #esg, #sustainablefinance