MEPs, meeting in Strasbourg in Parliament's plenary session on Thursday 18 April, supported by a large majority (449 votes in favour, 51 against and 51 abstentions) the agreement reached in early March between European Parliament and Council of the EU representatives (see EUROPE 12209/14) on the proposed regulation which specifies how institutional investors should integrate environmental, social and governance (ESG) factors into their investment decision-making (see EUROPE 11977/2).
"From the start the idea has been radically simple: make the sustainability part of the DNA of the financial sector (...) It sounds simple but the implementation is not", said rapporteur Paul Tang (S&D, Netherlands), during the debate before the vote.
The Council of the EU had adopted a relatively minimalist approach (see EUROPE 12162/12) compared to that of the European Parliament, and it was ultimately the MEPs who won their case as regards the scope, since the regulation will indeed apply to all financial products (see EUROPE 12131/3).
The agreement also maintains the principle of "due diligence” in a broad sense, defended by the rapporteur, who asks financial institutions not only to identify negative impacts on sustainability, but also to have a policy to avoid or mitigate these impacts.
As regards disclosure of information, the agreement takes up the logic of two levels, the company and the product, and adds a compliance or explain mechanism - a concession that the European Parliament had to make and that British Green MEP, Molly Scott Cato, deeply disapproved of during the debate.
See the agreed text: https://bit.ly/2UmKvCw (Original version in French by Marion Fontana)