The EU sustainable finance framework includes the following building blocks below.
Corporate disclosure of climate-related information: There is an EU Guidance for companies on how to report on the impacts of their business on the climate and on the impacts of climate change on their business.
EU labels for benchmarks (climate, ESG) and benchmarks’ ESG disclosures help make benchmark methodologies more transparent when it comes to ESG & put forward standards for the methodology of low-carbon and ESG benchmarks in EU.
Sustainability-related disclosure in the financial services sector (SDFR): A regulation adopted in 2019 lays down sustainability disclosure obligations for manufacturers of financial products and financial advisers toward end-investors.
European green bond standard: An EU-wide standard to encourage market participants to issue and invest in EU green bonds and improve the effectiveness, transparency, comparability and credibility of the market.
Taxonomy: The EU taxonomy is a classification system, establishing a list of environmentally sustainable economic activities. It could play an important role helping the EU scale up sustainable investment and implement the European Green Deal.
Corporate sustainability reporting: EU rules require large companies and listed companies to publish regular reports on the social and environmental risks they face, and on how their activities impact people and the environment. On 5 January 2023, the Corporate Sustainability Reporting Directive entered into force. This new directive modernises and strengthens the rules concerning the social and environmental information that companies have to report.