The new legislative guidance
The choices made by th EU legislator involve the entire financial sector in the transition towards a sustainable economic development and define ESG issues according to its specific characteristics.
The EU Regulation 2019/2088, relating to the disclosure of financial products, identifies participants in the financial market (e.g. SGRs, retirement funds, insurance companies, credit institutions that provide portfolio management services) as its recipients. The regulation requires such entities to provide contractual information on how sustainable a proposed investment is.
The legislator has already addressed eco-sustainability and identified the goals for the environmental taxonomy. Progress is currently being made on the taxonomy relating to Social and Governance aspects.
EBA Guidelines
Alongside the 2019/2088 Regulation, a central role is played by the EBA Guidelines, which came into force on 30 June 2021. These Guidelines explicitly require banking institutions to “take into account the risks associated with ESG factors on the financial conditions of borrowers, and in particular the potential impact of environmental factors and climate change, in their credit risk appetite, policies and procedures”.
This implies the need to acquire efficiently and effectively the information that allows to comply with the provisions of both the legislator and the control authorities. It is therefore necessary to implement a sector-specific analysis and evaluation tool to assess compliance and ESG risks.
The ESG Portal offer
In light of these developments, ESG Portal offers a questionnaire with qualitative and quantitative indices of interest that meet the needs of this sector.
Participants of the financial markets can provide their customers with a self-assessment tool. Moreover, they can carry out their own assessments or rely on third parties for an in-depth analysis.
