European legislation in draft form


֍   REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the transparency and integrity of environmental, social and governance (ESG) rating activities 
ESG ratings provide information to investors and financial institutions on investment strategies and risk management of ESG factors. Currently the ESG ratings market suffers from a lack of transparency and the proposed Regulation aims to improve the reliability and transparency of ESG rating activities. The provisions related to the organisation and prevention of conflicts of interest are intended to ensure the integrity of ESG rating providers' operations and will allow investors to make better informed decisions. The proposed Regulation requires ESG rating providers offering services to investors and companies in the EU to be authorised and supervised by the European Securities and Markets Authority (ESMA), as a measure to ensure the quality and reliability of their services to protect investors and market integrity.



֍   European Green Bond Regulation - (EuGBR) (Annexes to EuGBR)

The European Commission has put forward a proposal for a Regulation laying down a common framework of rules on the use of the designation "European Green Bond" or "EuGB" for bonds that pursue environmentally sustainable objectives within the meaning of Regulation (EU) 2020/852 (Taxonomy Regulation). The "European Green Bond" designation is available to all issuers, inside or outside the EU, that meet the requirements of the Regulation. The 4 key requirements for EuGBs are: the funds raised must be fully allocated to projects aligned with the EU taxonomy; full transparency on the allocation of proceeds must be ensured through detailed reporting requirements; all EU green bonds must be verified by an external assessor to ensure compliance with the provisions of the Regulation and that the projects funded are aligned with the taxonomy; external assessors must be registered and supervised by ESMA.

The Regulation will apply to bond issuers wishing to use the designation "European Green Bond" or "EuGB" for bonds issued that pursue environmentally sustainable objectives within the meaning of the Taxonomy Regulation.