Case study: Nordea EU Taxonomy implementation Nordea presentation to the PRI EU Taxonomy Practitioners Group on EU taxonomy implementation Recorded Apr 20 2020 29 mins Our target is to apply the EU taxonomy to all funds and mandates as soon as possible. New legislation stemming from the EU Action Plan for a greener economy requires asset managers to classify all their investment products on the basis of sustainability by March 2021. Marshall Geck, Senior Specialist, Stewardship (Climate Action 100+), Washington DC, By Sagarika Chatterjee, Director of Climate Change, the PRI, and COP26 Champions Finance Lead, By Siobhan Archer, Relationship Manager, PRI and Marie Luchet, Director of Continental Europe, PRI, By Margarita Pirovska, Head of Fiduciary Duty in the 21st Century, PRI, and Fiona Stewart, Lead Financial Sector Specialist, Finance, Competitiveness Innovation, World Bank, By Elise Attal, Head of EU and UK policy, Margarita Pirovska, Head of Asia Policy and Multilaterals Policy and Heather Slavkin Corzo, Head of US Policy. Clarmondial and Versant Vision are supporting investors in assessing the EU Taxonomy and adapting their policies, procedures and strategies accordingly. Then, we used MSCI ESG data to verify technical screening criteria and aligned revenues. The taxonomy's technical screening criteria for transitional activities will be subject to regular revision and will be phased out as the EU economy approaches a state of net zero emissions by 2050. European asset managers and financial market advisors have a daunting task ahead of them in the coming four months. Governance of Taxonomy Releases and Schedule 2019- 2021. ... Nordea presentation to the PRI EU Practitioners Group on EU taxonomy implementation. To be environmentally sustainable, an activity must satisfy four tests under the proposed Regulation8: 1. it must substantially contribute to the one or more of the specified environmental objectives outlined in the Proposed Taxonomy Regulation, being climate change mitigation; climate change adaptation; sustainable use and protection of water and mari… Subscribe to our newsletter to keep up to date with the latest news and insights. The proposed EU taxonomy  ... so data availability is probably the greatest hurdle to the rapid implementation of the taxonomy. Q2/Q3-20: Final text of regulation for EU taxonomy expected to be ready ; 31-Dec-20: European Commission to adopt the Delegated Acts on the technical screening criteria for climate mitigation and adaptation (12-month ratification period) 31-Dec-21: … Give Member States and the financial sector the tools they need to address any rise in NPLs in the EU banking sector as a result of the COVID-19 crisis. EU Taxonomy The Platform on Sustainable Finance Taxonomy will be the base for the coming Ecolabel, the EU Green Bond Standard and for standards and labels at national level set on green investments The taxonomy expands the investment universe as it includes transitioning activities e.g. The EU taxonomy: a generational shift for responsible investment. This document sets out the results of the work to date undertaken by the Technical Expert Group on Sustainable Finance (hereafter, ‘TEG’) in relation to the development of an EU classification system for environmentally sustainable economic activities (hereafter ‘Taxonomy’). Implementation. This will initially adopt the scientific metrics of the EU taxonomy. The taxonomy matters – most importantly because it is a serious effort by financial regulators to mandate disclosure against a sustainability target, rather than a financial one. The Taxonomy also plays a crucial role in Europe’s ‘Green Deal’ implementation, as it will help to attract billions of euros needed for the sustainable transition and to achieve carbon neutrality by 2050. The EU Taxonomy is primed to reshape the landscape for responsible investment in Europe and accelerate the shifting of capital towards the objectives of European Commissions’ Sustainable Finance Action Plan. Annex V presents an analysis providing top-down estimates for the three KPIs included in the call for advice, for the EU economy as a whole and by Statistical Classification of Economic Activities in the European Community (NACE) macro sector, based on a methodology developed by the EC Joint Research Centre report on the EU Taxonomy. The roadmap presents a coordinated strategy for 7 categories of organisations: Starting 1 January 2021, premium listed companies in the UK will need to report on how climate change affects their business, in accordance with the recommendations of the TCFD. It has since been published in the Official Journal and entered into force on 12 July 2020. 4 Factor Back Test “Brown” Basket Total exposure to Green Revenue As always, we will bring the power of collaboration, gamification, and digitalization into play for an exciting learning experience. Please note that although you can expect to find some posts here that broadly accord with the PRI’s official views, the blog authors write in their individual capacity and there is no “house view”. To be included in the proposed EU Taxonomy, an economic activity must contribute substantially to at least one environmental objective, and do “no significant … The taxonomy, by contrast, will translate EU-wide sustainability goals into a tool investors and companies can work with. But opting out of some of these cookies may have an effect on your browsing experience. They will be required to disclose the proportion of turnover and/or CAPEX aligned with the taxonomy. The EU Taxonomy The Taxonomy is a list of economic activities within different sectors with technical screening criteria to substantially contribute and not to significantly harm environmental objectives. Agenda. In order to line up with the Taxonomy Regulation, economic activities need to considerably contribute to one of the six aforementioned environmental objectives, and not significantly harm any of the other five. PRI staff have been deeply involved in the EU taxonomy and are here to help. The EU Taxonomy is a classification tool, or list, of economic activities and performance criteria consistent with Europe’s commitment to net zero carbon emissions by 2050 and building resilience to climate change. It is mandatory to procure user consent prior to running these cookies on your website. It specifies what level of environmental performance a service or product should have if it is going to contribute to Europe’s environmental objectives. Last week, the European Commission’s Technical Expert Group on Sustainable Finance (TEG) published its final report along with a technical annex setting forth its recommendations regarding the design and implementation of a unified classification system, known as EU Taxonomy, which will define what economic activities are considered environmentally sustainable under the EU’s … The ESEF taxonomy is based on the IFRS Taxonomy. Moreover, reliable green data that supports investors when making decisions may lack or be incomplete in many cases. The latter sets out an indicative path over the next five years. As businesses and financial market participants begin preparing for the implementation of the Taxonomy Regulation, we take a closer look at its scope and operation. A tool to navigate the low carbon transition The Taxonomy is essentially a tool that will help ... Period End Date Dec 2018. The EU Taxonomy is at the heart of the EU’s action plan on sustainable finance. Here is an overview of the expected timeline for the implementation of the EU taxonomy and several broader developments. It is not yet clear whether the implementation will be done in phases or through a “big bang” approach. The list of economic activities and performance thresholds will be issued as part of the explicit legal requirements from the European Commission by the end of 2020. However, as of this moment, reporting is compulsory only for the following two groups: The objective of the Regulation “is to focus the minds of corporates on investing and delivering returns from these activities, and to provide investors with the data they need to be able to direct their capital to sustainable practices.” (Bloomberg Professional Services, 2020, “The EU Taxonomy for sustainable finance: FAQs for financial market participants”). EU taxonomy final report: 2020 starts a decade of action on climate change. To ensure that the draft advice covers key … The Green Finance Strategy document further noted that, in order to ensure the government “has the option of onshoring the EU’s proposals into UK law, regardless of the EU Exit outcome”, the Taxonomy would be included as part of the Financial Services (Implementation of Legislation) Bill. Minimum safeguards (Art 13) The . Action Learning Values: How Can Companies Benefit From It? Provisional agenda for the fifth ordinary meeting of the Withdrawal Agreement Joint Committee . What are the Principles for Responsible Investment? The taxonomy is a classification framework according to which activities can be assessed in order to determine whether they are environmentally sustainable. are welcome as a means to ensure social resilience in the transition towards a more sustainable economy and integrate crucial social considerations in the framework. activities to the EU Taxonomy for sustainable fi nance. Our modules are built on fun, team-work and thinking outside the box. The co-chairs of the sustainable finance committee will provide an update on the work of the committee. Sustainalytics is following the developments closely. This tool is essential for the implementation of the EU Green Deal (TEG,2020). On climate change mitigation, the taxonomy includes activities already consistent with net-zero carbon emissions by 2050, and importantly, transition and enabling activities too, where they are on a clear pathway to reaching the net-zero target. With this in mind, the TEG’s climate-related disclosures guidelines will upgrade the Non-Financial Reporting Directive ... click here > Any views expressed here are those of the author as of the date of publication, are based on available information, and are subject to change … For now, it represents a set of guidelines for the majority of companies, while reporting is not mandatory for most. The first phase looks at activities that can substantially contribute to climate change mitigation or adaptation. A greener future is a top priority for the European Union, now that the 2030 target date for achieving the environmental goals set out in the Paris Agreement and the UN’s Sustainable Development Goals (SDGs) is less than a decade away. Eligibility for Mowi ASA was 0.0% (agriculture 0.0%) as Bloomberg does not consider marine aquaculture. This course is organized by Bonnier Aktuell Hållbarhet in partnership with Enact. These cookies do not store any personal information. We used Bloomberg eligibility data. Moreover, the European Commission will further improv and supplement the Taxonomy tool in time. Automated page speed optimizations for fast site performance. For the PRI’s part, we’ve introduced mandatory TCFD reporting and with UNEPFI have launched the UN Net Zero Asset Owner Alliance. That’s because the taxonomy is a classification tool, essentially a list of economic activities and performance thresholds. For ESG-tilted equity baskets, we used the Bloomberg EU Taxonomy watchlist function to map eligible equity by revenue breakdown. Comments on the EU … The EU taxonomy is likely to be a key part of the answer for many. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. Decisions by investors to … The EU Taxonomy. EU taxonomy final report: 2020 starts a decade of action on climate change. 5 Brands That Are Doing Black Friday Right, sustainable use and protection of water and, life insurers and FCA-regulated pension schemes. However, Flemming Hedén also outlines some trade-offs. Understanding of the continued development of the EU Taxonomy and how to stay up to date with developments; The training will mainly be conducted in Swedish. EU Taxonomy The Platform on Sustainable Finance Taxonomy will be the base for the coming Ecolabel, the EU Green Bond Standard and for standards and labels at national level set on green investments The taxonomy expands the investment universe as it includes transitioning activities e.g. Article 8 of the Taxonomy Regulation obliges undertakings covered by the Non-Financial Reporting Directive to publish information on how and to what extent their activities are associated with economic activities that qualify as environmentally sustainable under the Taxonomy … Clarmondial and Versant Vision are supporting investors in assessing the EU Taxonomy and adapting their policies, procedures and strategies accordingly. O n 22 June 2020, the long-awaited Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment (the “EU Taxonomy Regulation”), and amending Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (the “SFDR”) was published on the Official Journal of the European Union. The EU taxonomy is a tool to help investors understand whether an economic activity is environmentally sustainable, and to navigate the transition to a low-carbon economy. The TEG released its draft taxonomy for sustainable economic activities in December 2018 5.The EU Taxonomy will be used as the basis for many aspects of the EU Action Plan 6, such as devising a standard for green bonds, ECO labels for sustainable funds and gauging how much of a company's overall turnover actually comprises sustainable activities.While the EU Taxonomy is … Implementing EU Taxonomy Goals. Required fields are marked *. The EU-wide green taxonomy set out by the Taxonomy Regulation represents … Lastly, the UK is also planning on introducing its own green taxonomy in the following years. According to the EU Commission, the Taxonomy for climate change mitigation and climate change adaptation ought to be established by the end of 2020, and applied by end of 2021. The Taxonomy Regulation will incentivise companies to invest in a sustainable manner. Necessary cookies are absolutely essential for the website to function properly. ... implementation of the framework and its potential consequences on financial markets. 2019-06-11T09:24:00+01:00. Updated: ... Also, it would be reasonable to adjust the date of entry into force of the Regulation. By clicking “Accept”, you consent to the use of ALL the cookies. Martindale emphasises that a case of low taxonomy alignment will not automatically imply greenwashing. We invite you to check our current modules and subscribe to our newsletter for news about our future Taxonomy module. On 22 June 2020, the long-awaited Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment (the “EU Taxonomy Regulation”), and amending Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (the “SFDR”) was published on the Official Journal of the European Union. Crucially, an activity will only be consistent with the taxonomy if it does no significant harm to the other environmental objectives, and meets minimum safeguards, defined in line with the OECD Guidelines on Multinational Enterprises and the UN Guiding Principles on Business and Human Rights. On 18 June 2020, the European Parliament adopted the regulation on the establishment of a framework to facilitate sustainable investment  (the Taxonomy Regulation), a milestone in the EU’s Action Plan on Sustainable Finance (the Action Plan). At 2030 Builders we are determined to use our expertise to help companies overcome the Taxonomy obstacles and put their efforts and resources into the best possible investments towards a more sustainable future. However, issuers will be allowed to adopt it already for 2020 reports on a voluntary basis. preparing a business plan for an EU taxonomy-aligned and sustainable real estate product. The final report on EU Taxonomy, developed by the Technical Expert Group (TEG) on Sustainable Finance, has been made public on 9 th of March 2020. However, decision-makers can be one step ahead of the regulation changes. To illustrate this, Hedén gives the example of nuclear energy. As we start a decade of delivery, the taxonomy is likely to be one of its key developments. The implementation date for the Taxonomy also remains unclear; the EU Parliament would like to implement the Taxonomy as soon as possible, while the EU Council wants to postpone until 2022. To help investors understand how to implement the taxonomy, the PRI has established a practitioners’ group, representing a wide membership, including US and Japanese investors. By the end of 2021, Financial Products on sale in the EU will have to reference the EU Taxonomy for Sustainable Activities. However, given that the Taxonomy is due to enter the Official Journal of the EU during the implementation period, most likely within the next couple of months following adoption by the Council and the Parliament, the remainder of the level one file (i.e. This is an attempt by the European Commission to prevent market players from supporting greenwashing activities and invest in sustainable solutions instead. The 2020 taxonomy will be mandatory for annual financial reports containing financial statements for financial years beginning on or after 1 January 2021. This is new. The Commission is committed to ensure a swift implementation of all 35 actions. What’s in the EU Taxonomy? As with the SDGs, this data deficiency can make it particularly challenging for a framework to be put into practice. Last week, the European Commission’s Technical Expert Group on Sustainable Finance (TEG) published its final report along with a technical annex setting forth its recommendations regarding the design and implementation of a unified classification system, known as EU Taxonomy, which will define what economic activities are considered environmentally sustainable under the EU’s sustainable … Therefore, as IFRS Standards and taxonomy evolve, the ESEF RTS must also evolve to provide preparers with the most relevant ESEF taxonomy for tagging IFRS consolidated financial statements. COP26 has been badged the ‘net zero’ COP. by Iulia Georgiana EneDec 15, 2020Impact, Sustainability0 comments. Supporting policy makers and regulators to build a sustainable financial system, Key sustainable investment policies in 2020, The PRI is an investor initiative in partnership with, PRI Association, 25 Camperdown Street, London, E1 8DZ, UK. EXAMPLES: The following implementation is an example on how this specific Architecture Building Block (ABB) can be instantiated as a Solution Building Block (SBB): EU SCIENCE HUB - The European Commission's science and knowledge service - JRC's Data policy The JRC's data policy is driven by transparency with the aim of contributing to innovation. He also calls attention to the fact that the Taxonomy Regulation does not encompass the so-called ‘neutral’ activities. Therefore, companies need to understand the basis and implications of the new Taxonomy framework and identify areas of business where it can be implemented. 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