Page 16 - BIPAR Annual Report 2020_EN
P. 16

versions of  this  Regulation  can be  found  here. The   The Commission consultation on the Renewed Sustainable
                                                                                                                                   Benchmarks Regulation will start  to apply on the day   Finance Strategy, which will run until 15 July 2020, includes
                                                                                                                                   following its publication, i.e. on 10 December 2019.  questions on these proposed amendments (see below).


                                                                                                                                   The Benchmarks Regulation introduces a harmonised
                                                                                                                                   regime creating a new category of financial benchmarks   EIOPA  and ESMA  Technical  Advice on  integrating
                                                                                                                                   aimed at giving greater information on an investment   sustainability risks in the IDD and MiFID II
                                                                                                                                   portfolio’s  carbon  footprint.  This  new  category,  which   On 3 May 2019, EIOPA published its Technical Advice to
                                                                                                                                   is  a  voluntary  label,  comprises  two  types  of  financial   the  European  Commission  on  possible  amendments
                                                                                                                                   benchmarks:                                         to the  IDD  and  Solvency  II  Delegated  Acts to integrate
                                                                                                                                   -       EU  climate transition  benchmarks,  which  aim   sustainability  risks  and  factors.   The  IDD  section
                                                                                                                                   to lower the carbon footprint of a standard investment   covers  conflict  of  interests  (related  to  organisational
                                                                                                                                   portfolio. More precisely, this type of benchmark should   requirements) and  product  oversight and  governance
                                                                                                                                   be  determined  as taking  into  account  companies  that   (related to the target market  assessment). The Advice
                                                                                                                                   follow a measurable, science-based “decarbonisation   proposes that insurance intermediaries:
                                                                                                                                   trajectory” by end 2022.
                                                                                                                                   -       EU Paris-aligned  benchmarks,  which  have  the   -   should include a clear reference in their conflict
                                                                                                                                   more ambitious goal of selecting only components that   of interests’ policy on how conflict of interests relating to
                                                                                                                                   contribute to attaining the 20C reduction set out in the   ESG considerations are identified and managed.
          Products. This action is linked to two other actions included   The main changes in this second version are fourfold:    Paris climate agreement.                            -      should  consider ESG factors in the product
          in  the Action  Plan: the  EU Taxonomy and  the  EU Green                                                                                                                    approval process of any insurance product – not only IBIP-
          Bond Standard. The objective sought by EU standards and   -   The thresholds  regarding  the  exposure  of  the                                                              only if the insurance product is supposed to have an ESG
          labels for sustainable financial products is to protect the   constituents to green activities were significantly reduced;  Amendments to the IDD  and MiFID  to integrate  ESG   profile.
          integrity of and trust in the sustainable financial market,   -   Criteria on ‘Engagement’ were added;                   preferences in advice
          as well as enable easier access for investors seeking those   -   The rule regarding the exposure of green bond                                                              ESMA also published its Technical Advice to the European
          products.                                         issuers to brown activities have been clarified: there is no           Following  a public  consultation launched  in May 2018,   Commission  on  possible  amendments  to  the  MiFID  II
                                                            limit;                                                                 to  which  BIPAR  contributed,  the  European  Commission   Delegated Act to integrate sustainability risks and factors.
          The Joint  Research Centre  (JRC), the  Commission’s   -   A  discussion  of  the  available  scientific  evidence       published  draft  rules  amending  the  Delegated   The Advice proposes to introduce a clear reference
          in-house science service, published in March 2019 a 1st   has been introduced, in an attempt to comply with the          Regulations under the IDD and MiFID II.  The objective of   to ESG considerations in the provisions on general
          draft Technical Report proposing  EU Ecolabel criteria   obligations of the Ecolabel Regulation.                         these amendments is to ensure that investment firms and   organisational requirements, risk management, conflicts
          for  retail  financial  products,  mainly  PRIIPs  and  IBIPs.                                                           insurance distributors who provide advice on IBIPs take   of interest and product oversight and governance.  ESMA
          PRIIPs encompass investment funds (UCITS & RAIFs) and   The  3rd  draft  Technical  Repot  is  expected  to  be          ESG considerations and their clients’ ESG preferences into   also published its Technical Advice for the integration of
          insurance products with an investment component (unit-  presented by September/October 2020 and the European             account in the suitability assessment they undertake to   sustainability risks and factors in the UCITS Directive and
          linked insurance).  The EU Ecolabel criteria will determine   Commission is expected to adopt its Decision in Q2 2021.   see if proposed investments are appropriate for a client.  AIFM (Alternative Investment Fund Managers) Directive.
          which  products  are  sufficiently  “green”  to  be  awarded   Regulation on low carbon and positive carbon impact
          with  the  EU Ecolabel  by  competent  bodies  following  a   benchmarks                                                 The Commission is expected to officially adopt these rules,   The Commission will consider whether or not to amend
          verification process. The Report proposed to start with a                                                                following the adoption of the new disclosure provisions   the IDD and MiFID II  Delegated Acts according to the
          narrower product scope that could be extended in future   The  Regulation  on  “EU Climate  Transition  Benchmarks,      for sustainable  investments and  sustainability  risks and   Technical Advice of EIOPA and ESMA.
          revisions. In March 2020, the JRC presented to the ad hoc   EU  Paris-aligned  Benchmarks  and  sustainability-related   of the taxonomy. Once adopted by the Commission, the
          working group its 2nd draft Technical Report.     disclosures for benchmarks” was published in the Official              amended delegated acts will enter into force after their   Renewed Sustainable Finance Strategy 2020
                                                            Journal of the EU (Regulation  2019/2089).  All language               publication in the EU Official Journal, unless the European
                                                                                                                                   Parliament and the Council object to them within a period   On 8 April 2020, the European Commission has launched a
                                                                                                                                   of three months (extendable to six months).         consultation on its Renewed Sustainable Finance Strategy.










                                                            16                                                                                                                     17
   11   12   13   14   15   16   17   18   19   20   21