Sustainable finance
Sustainability is a topic that concerns all financial market participants and individual markets. Sustainable finance refers to the recognition of general environmental and social aspects in investment decisions. In 2018, the EU Commission released an action plan on financing sustainable growth, which aims to reorient the financial markets to foster sustainability objectives. In its strategy for 2020–2022, the Financial Supervisory Authority (FIN-FSA) identified the impact of climate change as one key area of supervision.
In its supervision of financial stability, the FIN-FSA monitors that supervised entities take into consideration in their operations sustainability risks as well as other risks. The information given to customers and investors on sustainability factors must be appropriate so that customers can make an informed assessment of the sustainability of products and services, and investors can, if they wish, make sustainable investment decisions.
sustainability risk
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an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the investment; (EU 2019/2088 Art 2(1)(22)) |
sustainability factor
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environmental, social and employee matters, respect for human rights, anti‐corruption and anti‐bribery matters; 2019/2088 Art 2(1)(24)) |
sustainable investment |
an investment in an economic activity that contributes to an environmental objective or a social objective, provided that such investments do not significantly harm any of those objectives and that the investee companies follow good governance practices Art 2(1)(17)) |
environmentally sustainable economic measure |
To be added later when the Regulation has been published in the Official Journal and been assigned a number (Taxonomy, Art 3) |
financial market participant
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- an insurance undertaking which makes available an insurance‐based investment product; - an investment firm or credit institution which provides portfolio management; - an institution for occupational retirement provision; - a manufacturer of a pension product; - an alternative investment fund manager (AIFM); - a pan‐European personal pension product (PEPP) provider - a manager of a qualifying venture capital fund - a manager of a qualifying social entrepreneurship fund - a UCITS management company (EU 2019/2088 Art 2(1)(1)) |
financial adviser |
- an insurance intermediary or insurance undertaking which provides insurance advice with regard to an insurance-based investment product - a credit institution, investment firm, AIFM or fund management company which provides investment advice (EU 2019/2088 Art 2(1)(11)) |
financial product |
- an asset management service under the Investment Firms Act - alternative investment fund - an insurance-based investment product - a pension product - a pension scheme - an UCITS - a PEPP product (EU 2019/2088 Art 2(1)(12)) |
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Thematic review: Plenty of room for development in climate and environmental risk management by credit institutions under direct FIN-FSA supervision
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Supervision focuses on economic uncertainty, cyber security and longterm changes in the operating environment
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Amendments to FIN-FSA regulations and guidelines 3/2011 as regards sustainability risks and sustainability factors to be taken into account
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Amendments to FIN-FSA regulations and guidelines 7/2018 concerning the integration of sustainability factors into product governance obligations and to implement new ESMA Guidelines on appropriateness requirements
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Taking sustainability risks into account in the supervision of insurance undertakings: regulatory changes and expectations set by supervisors
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EBA publishes discussion paper on integration of ESG risks into risk management and supervision of credit institutions and investment firms – consultation period until 3 February 2021
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European Supervisory Authorities’ proposal on the standardisation of sustainability-related disclosures – consultation period until 16 October
More supervision releases, press releases ja blogs