Skip to main content

In short

Understanding what each regulation is about and their main characteristics

The sustainable finance legislative pieces developed by the European Union pursue diverse objectives and target varied players with the goal to push the transition towards sustainability.  This page provides you with a snapshot of what each of these EU regulatory pieces is about as well as their main characteristics: when they were adopted, when they enter/-ed into force and to whom they target. Click on “More information” if you want to access the “In Depth” section.

The “In Depth” section provides you with more detailed information on each of them, deep diving into the specific objectives, what each of them means for the financial services, and what the chronology has been.

Snapshot of the Regulation: 

Taxonomy

It is a regulation introduced by the European Commission that establishes a list of environmentally sustainable economic activities considering the alignment of these activities against the following six environmental objectives: Climate change mitigation, Climate change adaptation, Sustainable use and protection of water and marine resources, Transition to a circular economy, Pollution prevention and control & Protection and restoration of biodiversity and ecosystems.

Click here to read more +
Target Icon
Target: Financial Market Participants, Companies
Application Icon
Application Date: 01 January 2022
Adoption Icon
Adoption Date: 18 June 2020
Binding Icon
Binding: Yes

Sustainable Finance Disclosure Regulation (SFDR)

It is a regulation developed by the European Commission to improve transparency in the market for sustainable investment products, prevent greenwashing and increase transparency around sustainability claims made by financial market participants. It imposes comprehensive sustainability disclosure requirements covering a broad range of environmental, social & governance (ESG) metrics at both entity- and product-level.

Click here to read more +
Target Icon
Target: Financial Market Participants, Financial Products
Application Icon
Application Date: 10 March 2021
Adoption Icon
Adoption Date: 27 November 2019
Binding Icon
Binding: Yes

Markets in Financial Instruments Directive II (MiFID II)

It is a directive that provides organisational and market transparency requirements aiming to improve investor protection by promoting robust, transparent and efficient financial markets. Among others, MiFID II establishes how financial advisers and asset managers interact with clients – which involves determining the latter’s investment preferences and risk tolerance (suitability assessment).

Click here to read more +
Target Icon
Target: Investment Firms
Application Icon
Application Date: 02 August 2022
Adoption Icon
Adoption Date: 21 April 2021
Binding Icon
Binding: Yes

Insurance Distribution Directive (IDD)

It is a Directive on insurance distribution introduced by the European Parliament and the Council. The IDD aims to strengthen the rules on the design and distribution of insurance products and harmonize national provisions concerning insurance and reinsurance distribution. It focuses mainly on: product oversight and governance (POG) and product distribution arrangements (PDA), conflicts of interest, client’s information and conduct of business, suitability assessment (and information to customer), professional training and competencies.

Click here to read more +
Application Icon
Application Date: 02 August 2022
Adoption Icon
Adoption Date: 21 April 2021
Binding Icon
Binding: Yes

Corporate Sustainability Reporting Directive (CSRD)

It is a directive introduced by the EU Commission that requires private and public European companies, as well as non-EU companies with a substantial presence in the European Union, to report on the impact of their activities on the environment and society and requires the audit of the reported information.

Click here to read more +
Target Icon
Target: Companies
Application Icon
Application Date: 01 January 2024
Adoption Icon
Adoption Date: 14 December 2022
Binding Icon
Binding: Yes

Corporate Sustainability Due Diligence Directive (CSDDD)

It is a proposed directive developed by the European Commission that aims to create a transparent framework that helps companies assess and manage sustainability risks and impacts concerning core human rights and environmental risks across their value chains. This Directive establishes a corporate due diligence duty.

Click here to read more +
Target Icon
Target: Companies
Binding Icon
Binding: Yes

Low Carbon Benchmark Regulation

It is a regulation introduced by the EU Commission that introduces two types of low-carbon benchmarks: the EU Paris-Aligned Benchmark (EU PAB), and the EU Climate Transition Benchmark (EU CTB). The Regulation requires benchmark administrators to disclose certain information on the specific characteristics of the above-mentioned low-carbon benchmarks.

Click here to read more +
Target Icon
Target: Benchmark Administrators
Application Icon
Application Date: 23 December 2020
Adoption Icon
Adoption Date: 27 November 2019
Binding Icon
Binding: Yes

Green Bond Standard (EU GBS)

It is a voluntary standard developed by the EU Commission to foster the growth of a transparent and resilient green bond market within the EU. This regulation set a gold standard for how companies and public authorities can use green bonds to raise funds on capital markets to finance such large-scale investments, while meeting sustainability requirements and protecting investors.

Click here to read more +
Target Icon
Target: Private and Public Bond Issuers
Application Icon
Application Date: 21 December 2024
Adoption Icon
Adoption Date: 22 November 2023
Binding Icon
Binding: No