Europe’s regs seek expanded ESG disclosure

By James Langton | April 12, 2023 | Last updated on April 12, 2023
2 min read
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European regulators are proposing a series amendments of to sustainable finance disclosure requirements, which are intended to combat greenwashing and improve transparency to retail investors, among other things.

A trio of regulatory agencies — the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA) and the European Securities and Markets Authority (ESMA) — published a joint consultation paper setting out proposed changes to the rules for disclosing sustainability information.

Among other things, the regulators are proposing to require the disclosure of decarbonization targets; to expand the social issues that must be disclosed (such as earnings from non-cooperative tax jurisdictions or interference in the formation of trade unions); and revising certain definitions and methodologies that are used in determining disclosure obligations.

The proposals also aim to improve the disclosure of how sustainable investments “do not significantly harm” the environment and society; to simplify disclosure templates for financial products; and, to make other technical adjustments to the requirements.

The paper noted that “fast evolving ESG markets and the growing demand for ESG investments has been accompanied by an increased demand for high quality sustainability information” — however, it said that this demand for information is not being met by “adequate transparency and comparability on the sustainability impact” of available financial products, issuers’ sustainability, and the methodologies underpinning ESG ratings and data in general.

The paper detailing the regulators’ proposals is out for consultation until July 4, with the regulators’ final recommendations due by the end of October.

Additionally, the regulators said that they plan to hold a joint public hearing and targeted consumer testing during the consultation period.

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James Langton

James is a senior reporter for and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.