The European Securities and Markets Authority has published its Sustainable Finance Roadmap for 2022-2024. The Roadmap sets out ESMA's priorities for sustainable finance over the next two years, which include: (i) tackling greenwashing and promoting transparency; (ii) building the capacity of national regulators and ESMA to understand and address the supervisory implications of new legislation and market practices; and (iii) monitoring emerging trends in environmental, social and governance markets and related risks and vulnerabilities.
To achieve these priorities, ESMA has also set out a list of planned activities which it will undertake in the financial sectors most impacted by its priorities (namely investment management, investment services, issuers' disclosure and governance, benchmarks, ratings, trading and post-trading and financial innovation). ESMA's planned activities include assessing the consistency of sustainable finance legislation, assessing "greenwashing" practices (i.e. where the publicly disclosed sustainability profile of an issuer or investment does not properly reflect the actual sustainability risks or impacts), a range of actions to assist regulators in monitoring the ESG market (e.g. developing a common understanding of regulators' roles and mapping ESG data needs for supervisory purposes) and contributing to the European Commission's efforts to develop EU-wide labels, including the EU Green Bond standard.
ESMA's roadmap builds on its 2020 Strategy on Sustainable Finance, which is designed to ensure ESMA complies with its obligations under the ESMA Regulation to take ESG factors into account across the range of its activities and monitor and assess ESG-related market developments and risks.
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