- Regulatory Relief Proposed: ESMA advises the European Commission to amend BMR Level 2 measures to ease compliance for benchmark administrators.
- Improved ESG Transparency: Recommendations call for enhanced clarity and comparability of ESG disclosures to benefit benchmark users.
- Stronger Supervision Ahead: ESMA will work with national authorities to build a unified EU supervisory culture around ESG reporting.
The European Securities and Markets Authority (ESMA) has published the findings of its 2024 Common Supervisory Action (CSA) on environmental, social, and governance (ESG) disclosures under the Benchmarks Regulation (BMR). This marks a pivotal step in ESMA’s role as a direct supervisor of benchmark administrators—its first coordinated review with National Competent Authorities (NCAs).
The outcome includes a dual set of recommendations:
- To the European Commission (EC): ESMA proposes amending BMR Level 2 measures to reduce the regulatory burden on benchmark administrators.
- To benchmark administrators: ESMA urges clearer and more comparable ESG disclosures to better serve the needs of benchmark users.
“The objective is to alleviate the regulatory burden on benchmarks administrators and to enhance transparency and comparability of ESG information for the benefit of users of benchmarks.”
The report emphasizes the need for coherence across EU sustainable finance legislation and suggests that streamlined ESG disclosure requirements will foster a more integrated regulatory framework.
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“ESMA considers the wider regulatory context on sustainable finance and the need to ensure consistency and compatibility of the ESG disclosure requirements across the various sustainable finance legislations.”
Looking ahead, ESMA will continue to collaborate with national authorities and the European Commission on implementation and supervisory convergence.
“These will include the need to use supervisory convergence tools to build a stronger supervisory culture across the EU and promote effective, sound and consistent supervision regarding ESG disclosure.”
This initiative forms part of ESMA’s broader effort to fortify sustainable finance in the EU’s capital markets and signals a shift toward more efficient, transparent ESG reporting across the financial industry.
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