Legal & Regulatory News

ESMA publishes speech on ESG reporting, risk management, strategy and responsibility

On 19 November 2021, the European Securities and Markets Authority (ESMA) published the transcript of a keynote speech by ESMA Chair, Verena Ross, covering ESG reporting, risk management, strategy and responsibility.

Amongst other things, the speech highlights that the rapidly growing demand for ESG products, coupled with a regulatory regime that is still in the making, creates a clear risk of distortions and even manipulation in the marketplace, in particular the risk of greenwashing or ESG-washing. In order to minimise this risk of market distortion, the speech notes that a co-ordinated approach across the EU is needed and regulators must work together to tackle greenwashing.

The speech also highlights the importance of:

• reliable and transparent company disclosures;
• ensuring that investors are sufficiently educated on the fundamentals of sustainable investing; and
• having governance mechanisms in place to ensure the appropriate level of stewardship on the decisions that companies take with regards to sustainability.

Click here to access a transcript of the speech.