The European Securities and Markets Authority (ESMA) announced a change in Union Strategic Supervisory Priorities (USSPs). USSPs are to include a new priority – ESG disclosures.
ESG principles cover three areas: environmental, social and governance-related issues. Environmental issues refer to, among others, the impact of a business on the environment, greenhouse emission, and how the business uses renewable and non-renewable resources. The social issues consider, for example, the impact of a business on the social environment, the company’s employment policy, cooperation with suppliers, respect for employment rights and human rights. The third pillar – corporate governance – includes transparency in management, acting against corruption, and compliance with corporate ethics.
Reporting ESG non-financial data is to support sustainability and promote informed decisions.
ESMA’s decision to include ESG disclosures in its Union Strategic Supervisory Priorities is a response to the growing demand for ESG-related financial products. ESMA and national competent authorities are going to act to promote investments in a credible ESG market.
More details about ESG disclosures as a new USSP can be found here:
https://www.esma.europa.eu/press-news/esma-news/esma-work-esg-disclosures-new-union-strategic-supervisory-priority