ICMA Feedback on the Draft Proposal of the EU Platform on Sustainable Finance for an Extended Taxonomy to Support Economic Transition

The Green Bond Principles Executive Committee and Climate Transition Finance Working Group of the International Capital Markets Association (‘ICMA’) provided feedback to the EU Platform on Sustainable Finance which in turn drives development EU Taxonomy for Sustainable Activities (‘EUT’). ICMA indicates an assessment of EU policy and legislative initiatives that incentivize finance for urgent transition away from significantly harmful activities via design of a ‘Significantly Harmful Taxonomy’ would have benefits including:

• Increasing the transparency of environmental performance levels of activities
• Assist companies in developing strategies and investment plans for moving away from significantly harmful performance levels and meeting environmental performance objectives
• Help markets define and develop instruments for financing the transition
• Enhance risk management frameworks

ICMA also addressed matters concerning extension of the EUT to support economic transition, including:

• Greater environmental performance delineation in the EUT
• Greater environmental performance delineation in the sustainability-linked financial instruments
• Identification and definition specific significant harm performance levels
• Mandatory reporting to follow voluntary disclosure