Member States' ambassadors to the EU (Coreper) are expected to agree in principle on Wednesday 19 December on the proposed regulation creating a new category of benchmark indices to help investors compare the carbon footprint of investments (see EUROPE 11977).
The compromise text was submitted to a silence procedure that ended on 14 December. Overall, it provides for few changes compared to the Commission's initial proposal.
In particular, Member States have adopted the initial definitions of the ‘low-carbon benchmark’, which would be based on a standard decarbonisation benchmark, and the ‘positive carbon impact benchmark’, which would allow an investment portfolio to better align itself with the objective set in the Paris Agreement to limit global warming to below 2°C.
As a reminder, the European Parliament, which adopted its position last week (see EUROPE 12157), had chosen a different name, namely ‘climate transition benchmark’ and 'Paris aligned benchmark'.
It should be noted that, like MEPs, Member States set transitional measures for critical benchmarks. The text provides that any existing benchmark, designated as critical by an implementing act adopted by the Commission and which does not meet the authorisation requirements of this Regulation by 1 January 2020, may continue to be used until 31 December 2021 in existing and new financial instruments, financial contracts or the performance measurement of an investment fund.
"The removal of a critical benchmark can have repercussions on market integrity, financial stability, consumers, the real economy or the financing of households and businesses in Member States" the text stresses.
It also requires the Commission to review the methodology applicable to these two indices by 31 December 2021 at the latest, in order to reflect how the selection of underlying assets can take into account sustainable investments.
The compromise text can be found at the following address: https://bit.ly/2Ep7Jn3. (Original version in French by Marion Fontana)