Breaking news – Sustainable Finance

What’s new in sustainable finance?

Ursula von der Leyen has been endorsed for a second term as President of the European Commission, as EU leaders acknowledge the escalating damage from climate change and biodiversity loss. Concurrently, the European Council has set new priorities, emphasizing the continuation of the green transition. However, there are concerns about potentially weakening environmental standards as efforts are made to lessen administrative and regulatory burdens.

In a statement regarding European Sustainability Reporting Standards (ESRS), the European Securities and Markets Authority (ESMA) emphasized that large public-interest entities will start publishing sustainability statements in 2025 as required by the CSRD. To support this, the ESMA highlighted the importance of establishing strong governance and internal controls, conducting transparent double materiality assessments clearly communicating the use of transitional reliefs, preparing structured digitization-ready statements and creating connectivity between financial and sustainability information.

The Network for Greening the Financial System (NGFS) has issued guidelines for central banks to assess nature-related financial risks, focusing on identifying vulnerable sectors and ecosystems and evaluating potential economic impacts. They should also consider broader financial system effects, particularly contagion risks. Some central banks have already begun such assessments. NGFS also released a report on emerging nature-related litigation trends, advising banks to monitor these as they may increase pressure on the financial system.

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