This article was written by Nadia Humphreys, Business Manager, Sustainable Finance Solutions at Bloomberg, Co-rapporteur on the Platform for Sustainable Finance of the European Commission.
To be effective and achieve its goals, sustainable finance regulation must be usable. This means corporates, banks and investment firms must be able to efficiently implement the requirements in their decision-making and reporting processes, resulting in transparent and reliable ESG data for the market.
Yesterday, the “Data and usability” subgroup of the European Commission’s Platform on Sustainable Finance published a report looking back at the first phase of the implementation of the EU Taxonomy, providing recommendations to enhance its usability and improve the coherence of EU ESG regulations. The report is based on contributions not only from Platform members but also on input from the across the market, including from industry associations and market practitioners.
Overall, the implementation of the EU Taxonomy is progressing well according to the report. Of the 1,956 companies covered by the Non-Financial Reporting Directive, 1,053 have reported data for Taxonomy-eligibility and 534 even reported Taxonomy-alignment, which is not required of them yet (this includes firms who have reported 0 alignment). Bloomberg data also shows that demand for sustainable investment products continues to grow, as evidenced notably by the success of article 8 and 9 labelled ETF funds, which took close to 60% of the inflows to European ETF funds year to date.