EU Authorities Propose Mandatory Sustainability-Related Key Performance Indicator (KPI) Reporting for EU Companies

Sullivan & Cromwell LLP - March 19, 2021

The European Supervisory Authorities (ESMA, EBA and EIOPA) have submitted proposals to the European Commission that will be used to define the sustainability-related disclosure requirements under Article 8 of the EU Taxonomy Regulation. Article 8 of the Taxonomy Regulation requires disclosure, as part of the non-financial information large EU-listed companies, credit institutions, asset managers and insurance companies must disclose pursuant to the EU Non-Financial Reporting Directive, of how and the extent to which the activities of such entities are associated with economic activities qualifying as “environmentally sustainable”. The ESAs’ proposals include various sustainability-related Key Performance Indicators and methodologies for their calculation and disclosure. The Supervisory Authorities have also made a joint proposal for further defining the sustainability-related disclosure requirements for financial products falling under the EU Sustainable Finance Disclosure Regulation.

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