Asset owners and money managers in Europe want upcoming ESG rules for corporations to better align with existing regulations, they said in a joint statement Friday.
Nearly 100 investment firms, investors and banks alongside Eurosif, a pan-European association promoting sustainable finance; U.N. Principles for Responsible Investment; Institutional Investors Group on Climate Change; European Fund and Asset Management Association; U.N. Environment Program Finance Initiative called on the European Commission to review its European Sustainability Reporting Standards proposal.
The investors and managers want legislators to enable investors to make informed investment decisions and comply with their own European Union disclosure requirements.
The investors and managers said the European Commission should require under the ESRS proposal that key climate disclosure indicators are mandatory — including Scope 1, 2 and 3 carbon emission disclosures — so investors can assess corporate transition plans.
They also want to ensure that corporations explain why certain sustainability topics are not considered material by a company and to ensure that companies show how they align their strategy and business models with the EU 2030 biodiversity strategy.
"The first set of the European Sustainability Reporting Standards, as published by the European Commission on June 9, fails to address investors' needs and risks undermining the effective implementation of the EU sustainable finance regulatory framework," said Aleksandra Palinska, Eurosif's executive director, in a news release. "The European Commission is now presented with a final opportunity to correct its course and find a compromise that would truly reflect all industry and stakeholders' needs and better match the ambition of EU climate neutrality targets and the EU Green Deal."