EU recommendations on ESG disclosures under the Benchmarks Regulation

The European Securities and Markets Authority (ESMA) has published a final report on the outcome of the 2024 Common Supervisory Action (CSA) on ESG disclosures under the Benchmarks Regulation (BMR). The CSA was conducted by ESMA with national competent authorities and assessed how benchmark administrators supervised in the EU comply with the BMR's ESG disclosure requirements. The report presents the findings of the CSA, including that: (i) the lack of specific guidance on the definition and calculation of ESG factors has led to divergent and inconsistent calculation and disclosure practices across benchmarks and administrators; and (ii) there are inconsistent approaches to the underlying assumptions used by administrators for determining the factors. The CSA report recommends that the European Commission considers amendments such as rationalising ESG disclosure requirements, for which ESMA would be able to assist with technical advice. The report also provides clarifications for administrators on transparency expectations and guidance on definitions and methodology used for calculating ESG factors.

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