European Commission Guidance for Financial Institutions on Disclosures Delegated Act under Taxonomy Regulation

A European Commission notice has been published in the Official Journal of the European Union on the interpretation and implementation of certain legal provisions of the Disclosures Delegated Act on the reporting of Taxonomy-eligible and Taxonomy-aligned economic activities and assets. The Disclosures Delegated Act supplements the EU Regulation on the establishment of a framework to facilitate sustainable investment, known as the Taxonomy Regulation. The purpose of this notice is to provide further interpretative and implementation guidance in the form of replies to FAQs to financial undertakings on the reporting of their KPIs under the Disclosures Delegated Act. Through this notice, the Commission intends to facilitate the compliance of stakeholders with the regulatory requirements in a cost-effective way and to ensure the usability and comparability of the reported information for scaling up sustainable finance. The FAQs cover scope of covered entities, scope of the consolidation of disclosures, taxonomy-assessment of exposures to individual undertakings, taxonomy-assessment of groups, taxonomy-assessment of specific exposures, verification/assurance/evidence of compliance with the technical screening criteria, and compliance with minimum safeguards. There are also separate questions related specifically to credit institutions and insurance and reinsurance undertakings.

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