Page 19 - BIPAR Annual Report 2020_EN

The aim of this consultation is to collect feedback to feed sustainability risks, as part of the review of Solvency II. - SMEs may be interested to prove that a project, for which they look for finance or public support, is sustainable.
into the Commission’s work to help mobilise private Furthermore, some questions are dedicated to the EU
investment in sustainable projects. The Commission’s Green Bond Standard and to pension providers. Finally, However, requiring SMEs to apply the same standards as large companies will be a disproportionate burden for SMEs.
aim is to adopt the Renewed Sustainable Finance Strategy the Commission explores the potential of social and This consultation is seeking, among others, feedback on the possibility to develop a simplified sustainability reporting
in the second half of 2020. This is an integral part of the catastrophe bonds to help mobilise the broadest possible standard for SMEs. In the same light, the Commission is collecting views on the possibility to broaden the scope of the
European Green Deal and according to the Commission, range of private finance alongside public budgets to Directive to cover EU companies with securities listed in regulated markets with more than 250 employees (or even
the ongoing coronavirus outbreak highlights the critical contribute to the resilience of the EU’s health and regardless their size) and their subsidiaries which may not meet this condition as well as to cover large non-listed
need to strengthen the sustainability and resilience of our economic systems, via prevention and reinsurance, as companies. The consultation will be open until 11 June 2020.
economies in the future. according to EIOPA insurability is likely to be an increasing
concern.
The Renewed Sustainable Finance Strategy will
predominantly focus on three areas: BIPAR has launched an internal consultation amongst
its member associations and based on the feedback
1. Strengthening the foundations for sustainable collected it will submit its contribution to the Commission.
investment by creating an enabling framework
(taxonomy, benchmarks, disclosure requirements).
Many financial and non-financial companies still Review of Non-Financial Reporting Directive
focus on short-term financial performance instead
of their long-term development and sustainability- In the framework of the EU sustainable finance strategy,
related challenges and opportunities. the European Commission aims to review the Non-
2. Increased opportunities for citizens, financial Financial Reporting Directive (NFRD) in 2020. In February
institutions and corporates to have a positive impact 2020, the Commission launched a consultation on the
on sustainability (environment and society). This NFRD. The Commission consultation aims to collect
second pillar aims at maximising the impact of the views from across the EU on different possible reforms
frameworks and tools in the EU arsenal in order to or improvements that could be made to the NFRD in
“finance green”. order to improve corporate transparency and provide
3. Climate and environmental risks will need to be fully all stakeholders with more comparable and relevant
managed and integrated into financial institutions information on sustainable economic activities.
and the financial system as a whole, while ensuring
social risks are duly taken into account where relevant. The NFRD requires large public-interest companies
Reducing the exposure to climate and environmental (listed companies, banks, insurers) with more than 500
risks will further contribute to “greening finance”. employees to include a non-financial statement as part
of their annual public reporting obligations. Although
The consultation will be open until 15 July 2020. The SMEs are not currently covered by the Directive, the new
consultation reiterates that the Commission will soon requirements on disclosing non-financial information
publish the amended delegated acts of MIFID II and laid down in the Regulation on “sustainability-related
IDD, which will require investment advisors to ask retail disclosure in the financial services sector” and in the
investors about their sustainability preferences. The Taxonomy Regulation (see above), will have an impact on
Commission is also asking the stakeholders’ opinion SMEs:
about insurers’ obligation to finance the transition and - large enterprises will need information from
manage climate and environmental risks. The Commission their SME suppliers to fulfil their reporting obligations;
will soon launch an inception impact assessment to - banks may have to report about the sustainability
consider clarification on insurers’ obligation regarding of their loan portfolios;

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