EU taxonomy - disclosure of sustainability characteristics

Subject: EU taxonomy - disclosure of sustainability characteristics

In the light of Parliament’s report on the proposed taxonomy for sustainable activities published as part of the sustainable finance package, we think it is essential that issuers of bonds, stocks and other assets provide sufficient, standardised and easily available information to enable insurers to make use of the taxonomy.

Has the Commission planned to introduce standardised ways for asset issuers to disclose their sustainability data, since the onerous task of compiling it will surely deter them from using the taxonomy on a voluntary basis?

Does it believe that the burden of gathering information that might not be publicly available should lie with the insurer?

Answer given by Vice-President Dombrovskis on behalf of the European Commission (29 November 2019)

In June 2019, the Commission published an update to the non-binding guidelines (1) to the Non-Financial Reporting Directive (NFRD) (2), which already recommends large companies to disclose material environmental information. The updated guidelines recommend these companies to disclose the percentage of their alignment with activities in the taxonomy (expenditures and/or turnover) once adopted and applicable.

In addition, with a view to consider the possible implications of the proposed taxonomy of sustainable economic activities, the Commission is working on a Fitness Check on the overall EU framework for corporate reporting (3). The next Commission may put forward a proposal to revise the NFRD.

In this context, the Commission decided not to propose additional disclosure requirements on corporates through the Taxonomy proposal (4). The Commission is of the view that the non-binding guidelines will help companies to provide their data already before the taxonomy disclosure obligation on financial market participants, including those who offer green insurance-based investment products, will enter into application. In addition, the taxonomy is expected to incentivise companies to disclose (on a voluntary basis) specific information on the environmentally sustainable economic activities they carry out, in order to show their sustainable competitive edge to investors.

Where insurers make available insurance products in compliance with Articles 8 and 9 of Regulation on sustainability disclosures (5) they have to disclose how environmental characteristics or investment objectives are achieved. This means that insurers need to collect relevant issuers’ information so that they comply with applicable contractual terms and the regulation.

⋅1∙ Communication from the Commission — Guidelines on non-financial reporting: Supplement on reporting climate-related information (OJ C 209, 20.6.2019, p. 1‐


⋅2∙ Directive 2014/95/EU

⋅3∙ https://ec.europa.eu/info/law/better-regulation/initiatives/ares-2018-744988_en

⋅4∙ Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the establishment of a framework to facilitate sustainable investment

(COM/2018/353 final)

⋅5∙ Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL-Regulation of the European Parliament and the Council on sustainability-

related disclosures relating to sustainable investments and sustainability risks and amending Directive (EU) 2016/2341 COM/2018/354 final