Increased focus of ESMA on taxonomy reporting

On 25 October 2023, the European Securities and Markets Authority (ESMA) published two documents that indicate an increased focus of ESMA on issues related to the Environmental Taxonomy Regulation (Regulation (EU) 2020/852). On the one hand, taxonomy reporting represents a common enforcement priority of ESMA and national enforcement authorities of the European Economic Area for the financial year 2023.

On the other hand, ESMA published a report on an investigation into the taxonomy reporting of non-financial companies for the 2022 financial year. Among other things, insufficient use of the reporting templates and insufficient narrative disclosures on the taxonomy ratios were identified.

In both documents, ESMA emphasises the importance of the FAQs published by the European Commission when interpreting application questions. The EU Platform on Sustainable Finance has recently installed a Stakeholder Request Mechanism (see here).

The ASCG has been organising for considerable time user fora on the Environmental Taxonomy Regulation with its member companies and associations. The application questions and possible solutions discussed here are filed with the European Commission in the form of submissions. Some of the issues raised in the submissions are also addressed in the FAQs published by the European Commission. Additional information can be found on the relevant ASCG project page.