On 30 September 2019, the Technical Expert Group on sustainable finance (TEG) published its final report on Climate Benchmarks and Benchmarks’ ESG Disclosures :
TEG final report on Climate Benchmarks.pdf
The final report recommends:
- A list of minimum technical requirements for the methodologies of ‘EU Climate Transition’ and ‘EU Paris-aligned’ benchmarks.
- A set of ESG-related disclosure requirements, including standard reporting format.
Background:
As part of the Action Plan on sustainable finance, the EC proposed a regulation amending the benchmark regulation. The regulation, which reached political agreement in March 2018, introduces two new categories of benchmarks:
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- EU Climate Transition Benchmark: a low-carbon benchmark where the underlying assets are chosen so that the resulting benchmark portfolio is on a decarbonisation trajectory.
- EU Paris-aligned Benchmark: positive carbon impact benchmark where the underlying assets are chosen so that the resulting benchmark portfolio is on a decarbonisation trajectory aligned with the Paris Climate Agreement.
To this end, the EC set up a Technical Expert Group (TEG) to develop the minimum technical requirements and related ESG disclosures. The final report is the result of the analysis of the responses received on its call for feedback and subsequent amendments to its interim report (see FLASH-19-073).