Financial institutions will be required to adhere to minimum standards and reference methodologies for the identification, measurement, management, and monitoring of ESG risks under guidelines for ESG risk management released by the European Banking Authority (EBA).

The use of generic environmental and climate claims which are not based on fact and supported by evidence will be banned in the EU by 2026 and added to the list of unfair commercial practice, under new legislation agreed by EU legislators.

Companies required to disclose and publish sustainability information under the EU Corporate Sustainability Reporting Directive (CSRD) and the EU Taxonomy Regulation have the opportunity to comment on the European Securities and Markets Authority’s (ESMA) approach to enforcement when the requirements take effect from 1 January 2025.

Growing consensus on the need to create regulated standards on ESG data has been given a boost with the publication of a set of recommendations by the international securities standards setting body for global regulators.