In 2018 the European Commission issued four legislative proposals to address several areas of the action plan on sustainable Finance.

Taxonomy Regulation

The Taxonomy Regulation establishes the conditions and the framework to create a common classification system for economic activities to be considered environmentally sustainable. It focuses on climate change mitigation and adaptation, but also requires economic activities to do no significant harm with regards to the other environmental objectives.

Disclosure Regulation

It introduces obligations for institutional investors and asset managers to disclose how they integrate ESG factors in their risk management and investment decision-making processes.

Benchmarks Regulation

This regulation creates a new category of low-carbon benchmarks with the introduction of two new climate-related benchmark classification - EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks - helping investors to better understand the relative carbon impact of their investments and prevent greenwashing.

Sustainability preferences

It includes ESG considerations into the advice that investment firms and insurance distributors offer to their clients under MiFID II and the Insurance Distribution Directive.