Member States' ambassadors to the EU (Coreper) are expected to reach political agreement in principle on Wednesday 19 December on the proposed regulation, which specifies how institutional investors should integrate environmental, social and governance (ESG) factors into their investment decision-making (see EUROPE 11977).
The compromise text, viewed by EUROPE, was submitted to a silence procedure that ended on Monday 17 December.
As regards the scope, it specifies in particular that the Regulation is intended to apply to financial market participants and financial advisors, including: - insurance intermediaries or insurance undertakings providing advice on insurance investment products; - credit institutions or investment firms providing investment advice; - managers of alternative investment funds or undertakings for collective investment in transferable securities (UCITS) providing investment advice.
The text allows Member States to apply the Regulation to financial actors managing national schemes that fall under the Regulation on the coordination of social security systems.
On the other hand, an exemption is provided for insurance intermediaries and investment firms that employ fewer than three persons and provide investment advice.
Like the European Parliament, which adopted its negotiating position in early November (see EUROPE 12131), the Council inserted its own definition of "sustainability risk" as "an environmental, social or governance event or condition which, if it occurs, could have a significant negative impact on the value of the investment".
According to the text, financial actors would also be required to include in remuneration policies information on how such remuneration is compatible with the integration of sustainability risks, and to publish this information on their website.
The date of entry into force of the Regulation has been extended to 18 months after its adoption, instead of the 12 months proposed by the Commission, except for certain transparency requirements that will only start to apply the following year. (Original version in French by Marion Fontana)