In Brief: NZAM loses another member; EU consults on updated taxonomy criteria and SFDR
The latest round-up of ESG policy and regulatory news.
The Net Zero Asset Managers initiative is losing another member, with the exit of US fund manager Green Century Capital Management. According to media reports, the fund exited the alliance last month due to compliance concerns. Large asset manager Vanguard left at the end of last year, citing a will to regain independence from the group. NZAM is part of a larger network under the Glasgow Financial Alliance for Net Zero, launched at COP26. In recent months, several participants in the different financial groups have decided to withdraw their membership due to legal concerns.
The European Commission is consulting until May 3 on the technical screening criteria of the four remaining objectives under its green taxonomy. These environmental objectives are economic activities that contribute to the protection of water and marine resources; a circular economy; pollution prevention and control; and biodiversity. The commission has also made revisions and added new activities for the first two objectives under the taxonomy: mitigation and adaptation. The new criteria are set to be adopted by June 30.
The European supervisory authorities are proposing amendments to the Sustainable Finance Disclosure Regulation. In a joint consultation paper, the regulators are suggesting to expand product disclosures regarding decarbonisation targets to also incorporate intermediate targets, ambition levels and an explanation on how those will be achieved. They also propose to amend indicators for principal adverse impacts to include factors such as earnings from non-cooperative tax jurisdictions or interference in the formation of trade unions. The proposals will be open for consultation until July 4 2023.
The UK Department for Environment, Food and Rural Affairs has launched a consultation to extend the powers of the UK Environment Agency to make it easier to prosecute environmental crimes. The government is considering increasing the overall penalty cap for environmental offences committed in England to either £25mn, £250mn, or to have no cap at all. The current cap is set at £250,000. The consultation is open until May 15 2023.
The Association of Southeast Asian Nations has published an updated version of its sustainable finance taxonomy. The updates include criteria for a phase-out of coal activities, which could be considered green or amber under the taxonomy’s colour-code system.
The US Environmental Protection Agency has proposed new federal vehicle emissions standards to stimulate clean energy use in newly manufactured cars and trucks. The agency expects the proposed standards to avoid nearly 10bn tons of carbon dioxide emissions through to 2055 and reduce oil imports by approximately 20bn barrels. The proposals do not include a ban on combustion engines as was recently agreed in the EU.
A group of OECD nations responsible for export credit agencies’ rules setting has agreed “in principle” on more flexible and generous financing terms for climate-friendly projects. The 13 participating countries and the EU stated that they will expand the scope for longer repayment terms to sectors such as CO2 capture, storage and transportation; clean hydrogen and ammonia; and clean energy minerals and ores. The group also agreed to extend the maximum repayment term for eligible projects to 22 years and to adjust the minimum premium rates for credit risk incurred.