ESG : Further Commission guidance on the Disclosures Delegated Act

What's new?

On Friday (8 November), a new Commission Notice (the Notice) was published in the Official Journal.

The Notice provides the Commission's views on the interpretation and implementation of certain aspects of the Disclosures Delegated Act made under Article 8(4) of the EU's Taxonomy Regulation.

The Disclosures Delegated Act deals with the reporting of Taxonomy-eligible and Taxonomy-aligned economic activities and assets.

We will be publishing a Briefing Note shortly, in which we will look at the key areas of interest for, and the key impacts on, our clients arising from the Notice.

What does the Notice contain?

The Notice sets out 71 questions and answers, organised under the following sections:

1. General questions

A. Scope of covered entities

B. Scope of the consolidation disclosures

C. Taxonomy-assessment of exposures to individual undertakings

D. Taxonomy-assessment of groups

E. Taxonomy-assessment of specific exposures

F. Verification / assurance / evidence of compliance with the Technical Screening Criteria (TSC)

G. Compliance with minimum safeguards

2.    Questions related to specific financial undertakings

A. Credit institutions

B. Insurance and reinsurance undertakings

What's the aim of the Notice?

The purpose of the Notice is "to provide further interpretative and implementation guidance to financial undertakings in the form of replies to Frequently Asked Questions (FAQs) on the reporting of their KPIs under the Disclosures Delegated Act".  The FAQs come from a combination of stakeholders subject to the reporting requirements, the Platform on Sustainable Finance and national and European supervisory authorities.

The answers given in the Notice

• clarify the rules already contained in the applicable legislation.

• neither extend the rights and obligations deriving from such legislation, nor introduce any additional requirements for the operators and competent authorities.

• are merely intended to help financial undertakings implement the relevant legal rules.

Previous Notices

The Notice's formal title notes that this is the third Commission Notice made under Art 8 of the Taxonomy Regulation, following on from

• the Commission Notice "on the interpretation of certain legal provisions of the Disclosures Delegated Act on the reporting of Taxonomy-eligible economic activities" (published on 6 October 2022) -- see our client note here and

• the Commission Notice "on the interpretation and implementation of certain legal provisions of the Disclosures Delegated Act on the reporting by non-financial undertakings of Taxonomy-eligible and Taxonomy-aligned economic activities" (published on 20 October 2023). See our key takeaways from the draft Notice of 19 December 2022 here