Council gives final approval to right-to-repair directive
On 30 May, the Council adopted a directive promoting the repair of broken or defective goods, also known as the right-to-repair (or R2R) directive. This legislation will make it easier for consumers to seek repair instead of replacement and repair services will become more accessible, transparent and attractive. The adoption of the directive is the last step in the legislative decision-making process. The directive will now be published in the Official Journal of the EU and will enter into force 20 days later. Member states will then have two years to transpose the directive into national laws.

Council gives final approval to CSDDD
On 24 May, the Council formally adopted the Corporate Sustainability Due Diligence Directive (CSDDD). This is the final step in the EU decision-making process. The directive will now be published in the Official Journal of the EU and will enter into force 20 days later. Member states will then have two years to transpose the directive into national law. Our update on the CSDDD provides further information, including application timelines.

Council gives final approval to gas and hydrogen market package
On 21 May, the Council adopted a regulation and a directive establishing common internal market rules for renewable and natural gases and hydrogen and reforming the existing EU gas legislation. The new rules call for integrated and transparent network planning across the EU, based on the 'energy efficiency first' principle and with a forward-looking approach. Gas and hydrogen network operators will prepare a 10-year EU network development plan. The regulation and directive will now be signed and published in the Official Journal of the EU. The regulation will enter into force six months after its publication. Member states have two years to adapt their national legislation to the provisions of the directive.

EU’s electricity market reform: Council adopts updated rules
On 21 May, the EU Council adopted the electricity market regulation, amending the current electricity regulation and the regulation on the Agency for the Cooperation of Energy Regulators (ACER). The changes aim to ensure more stable energy prices, less dependence on fossil fuel prices and better protection against future crises on the way to a decarbonised EU. The regulation will be signed and published in the Official Journal of the EU. It will be directly applicable in all Member States twenty days after publication.

ECB publishes working paper on the globalisation of climate change
On 17 May, the European Central Bank (ECB) published a working paper examining how climate-related physical risks are amplified through economic interdependencies, known as input-output linkages. The analysis provides an interesting country-level breakdown within the European Economic Area, identifying two main groups at risk of substantial aggregate losses: (i) countries with high direct exposure to physical risks associated with climate change; and (ii) those with significant trade links to parts of the world expected to suffer severe direct damages. The wholesale and retail trade, real estate services, and construction sectors are projected to experience the largest aggregate losses. In addition, substantial repercussions are foreseen for the financial and insurance sectors, raising concerns about potential financial stability spillovers from tangible economic setbacks. A key determinant of these outcomes is the ability of individual country sectors to adjust their input sourcing strategies. The findings suggest that sectors with greater flexibility in reallocating inputs may be able to mitigate some of these potential losses, while those with less adaptability may experience more adverse impacts.

  • May 2024

    EP adopts CSDDD
    On 24 April, the European Parliament (EP) adopted the Corporate Sustainability Due Diligence Directive (CSDDD) in a plenary vote. The proposal now has to be formally approved by EC bodies on 15 and 23 May. The CSDDD will then be published in the Official Journal of the European Union. Member states will then have two years to transpose the directive into national law. Please see our update on the CSDDD for more information, including application timelines.

    EP adopts regulation on packaging and packaging waste
    On 24 April, the EP adopted the regulation on packaging and packaging waste. The regulation concerns the full lifecycle of packaging. It sets requirements to ensure that packaging is safe and sustainable, by requiring that all packaging is recyclable and that the presence of substances of concern is minimised. It also sets binding re-use targets for 2030, restricts certain types of single-use packaging and requires economic operators to minimise the packaging used. Furthermore, it contains harmonised labelling requirements to improve consumer information. The regulation will apply approximately 18 months after its publication in the Official Journal.

    EP adopts right to repair directive
    On 23 April, the EP adopted the directive on the right to repair of goods for consumers, also known as the Right to Repair Directive (R2RD). It will apply to products already in scope of EU repair requirements and aims to improve the reparability of these goods, including after the warranty period. The directive (i) obliges manufacturers to repair in-scope goods; (ii) introduces a European consumer information form on repair services; and (iii) establishes an EU online repair information platform. After repair, the manufacturer’s liability is extended for at least 12 months. Member States will have to apply the Directive approximately 24 months after its publication in the Official Journal.

    EP adopts ecodesign regulation

    On 23 April, the EP adopted the proposed Ecodesign for Sustainable Products Regulation (ESPR). While the existing Ecodesign Regulation only applies to energy-related products, the new regulation will cover almost all product categories. It establishes a framework for setting requirements for product groups to make them energy and resource efficient, as well as more durable, reliable and circular. On the basis of this framework, the EC will adopt delegated acts setting requirements for specific product groups. The regulation also introduces a ban on the destruction of unsold clothing and footwear, which could later be extended to other product groups. It also provides for mandatory green procurement requirements. Lastly, the regulation introduces a ‘digital product passport’ containing information on the product’s environmental sustainability. The ESPR will apply 20 days after its publication in the Official Journal.

    EP adopts regulation on forced labour
    On 23 April, the EP adopted the proposed regulation on forced labour. The regulation will ban the placing on the EU market, making available on the EU market and export to third countries of products made with forced labour. It will apply to all products made with forced labour inside or outside the EU, and across all sectors. Competent national authorities will have to investigate reasonable indications that products have been made with forced labour. Most of the regulation will apply 36 months after its publication in the Official Journal.

    EP adopts directive and regulation on hydrogen and low-carbon gas markets
    On 11 April, the EP adopted a regulation and a directive on hydrogen and low carbon gas markets. The package provides much-needed clarity for investors and market players on the transition to hydrogen and low-carbon networks. The regulation sets out harmonised market access requirements and mechanisms for fair pricing and stable energy supply. The directive focuses on market organisation, consumer rights and energy poverty. The proposals include a definition of low carbon hydrogen and its derivatives. The EC will develop a methodology to assess the carbon footprint of blue hydrogen, hydrogen leakage and actual carbon capture rates. Once published in the Official Journal, the directive will have to be transposed into national law within two years. The regulation will apply six months after its publication.

  • April 2024

    Council endorses modified version of CSDDD proposal
    On 15 March, the European Council (EC) endorsed a modified version of proposed Corporate Sustainability Due Diligence Directive (CSDDD). The main elements of the final compromise text are explained in our latest CSDDD update. The current wording of the CSDDD already refers to the application of the OECD Guidelines for Multinational Enterprises, which emphasise the specificities of financial services and expect financial institutions to assess adverse impacts and use their influence on companies. The end of the European procedure for the CSDDD is now in sight. If the European Parliament (EP) adopts the proposal as planned on 24 April, the directive will be published in the Official Journal of the European Union. After the vote, member states have two years to transpose the directive into national law, so that the CSDDD will be in force by 2026.

    Provisional agreement on ban on products made with forced labour
    On 13 March, the Council and the EP reached a provisional agreement on a regulation on forced labour. The proposal bans the placing on the EU market, making available on the EU market and export to third countries of products made with forced labour. The regulation will apply to all products made with forced labour inside or outside the EU, and across all sectors. Competent national authorities must investigate reasonable indications that products have been made with forced labour. The agreement clarifies the roles of the different supervisory authorities. It also clarifies that if only a part of a product is non-compliant, an order to dispose of the product will only apply to that part and not to the whole product. The proposal now has to be formally approved by the Council and the EP.

    EC communication on climate risks
    On 12 March, the EC published a communication on managing climate risks in Europe. It sets out how the EU and its Member States can better anticipate, understand, and address growing climate risks. It shows how they can prepare and implement policies that will save lives, reduce costs, and protect prosperity across the EU. The communication also responds to the first ever European Climate Risk Assessment (EUCRA), a scientific report by the European Environment Agency. The communication and report are a call to action for all levels of government, as well as the private sector and civil society. They set out how all major sectors and policy areas are exposed to climate-related risks, how severe and urgent the risks are, and how important it is to have clarity on who is responsible for addressing the risks.

    Provisional agreement on regulation on packaging and packaging waste
    On 4 March, the Council and the EP reached a provisional political agreement on a regulation regarding packaging and packaging waste. The proposal takes into account the full life-cycle of packaging and sets requirements to ensure that packaging is safe and sustainable, by requiring that all packaging is recyclable and that the presence of substances of concern is minimised. It also sets out harmonised labelling requirements to improve consumer information. The proposal aims to significantly reduce the generation of packaging waste by setting binding reuse targets for 2030, restricting certain types of single-use packaging and requiring economic operators to minimise the packaging used.

    Dutch ministry announces new round of SDE++ subsidies
    On 1 March, the Dutch Ministry for Economic Affairs and Climate (EZK) announced that the SDE++ subsidy programme will re-open as of 10 September 2024, with an initial budget of EUR 11.5 billion. SDE++ is the main Dutch subsidy programme for large-scale sustainable (energy) projects. It reimburses the difference between the cost price of the technology and the revenue (the ‘non-profitable top’). Subsidies will be available for the following categories, among others: sun, wind, geothermy and aquathermy, electric boilers, hydrogen, carbon capture and storage, process-integrated heat pumps and thermal storage for high-temperature heat.

  • March 2024

    No support yet for endorsement of CSDDD proposal
    On 28 February, the Presidency of the European Council stated that no support was found at a meeting earlier that day for endorsement of the proposal for a Corporate Sustainability Due Diligence Directive (CSDDD). The statement follows an already postponed vote in a preparative body of the Council. The Presidency said it intends to address the concerns. With European elections in June, the proposal must be endorsed and sent to the European Parliament before the final deadline of 15 March. See also our Highlight above.

    Parliament adopts revised directive to protect the environment through criminal law (the Environmental Crime Directive)
    On 27 February, the European Parliament (EP) formally adopted a revision of the Environmental Crime Directive. The revision clarifies several definitions of environmental crimes, including on illegal timber trade, deforestation-linked products and water abstraction. The Directive also sets a minimum on several maximum sanctions for natural and legal persons, such as imprisonment of up to at least ten years for natural persons and fines of up to at least 5% of the total worldwide turnover for legal persons. The Directive adds ‘ecocide’ as an aggravating circumstance for environmental crimes, without using the word explicitly. Authorisation of conduct by a public authority of a member state, for instance by means of an administrative permit, excludes criminal liability, provided that the authorisation was not issued fraudulently or through corruption, extortion, or coercion, and provided that the authorisation is not in manifest breach of relevant substantive legal requirements. After publication in the Official Journal, the directive will have to be transposed into national law within two years.

    Commission approves third IPCEI to support hydrogen infrastructure
    On 15 February, the European Commission approved a third Important Project of Common European Interest (IPCEI) supporting hydrogen infrastructure. Under ‘IPCEI Hy2Infra’, seven member states, including the Netherlands, will provide up to EUR 6.9 billion of public funding for 33 selected hydrogen projects. This is expected to generate an additional EUR 5.4 billion of private investments. The selected projects aim to develop infrastructure beyond what the market currently offers. The projects include the development of large-scale electrolysers for renewable hydrogen production, hydrogen distribution pipelines, hydrogen storage facilities and port infrastructure improvements.

    Council and Parliament agree on EU certification framework for carbon removal
    On 20 February, the EP and Council reached a provisional agreement on a Regulation establishing the first EU certification framework for permanent carbon removal, carbon farming and carbon storage in products. Based on a set of criteria, the Commission will develop tailored certification methodologies for different types of carbon removal activities. Based on these criteria, national certification bodies will be able to provide voluntary certification for carbon removal projects. It is envisaged that the proposed Green Claims Directive will require certification under this framework for corporate claims relating to carbon offsets. The provisional agreement now needs to be formally adopted by both institutions, and will apply immediately upon its entry into force.

    Provisional agreement on Net-Zero Industry Act
    On 16 February, the EP and the Council reached a provisional agreement on a framework of measures to strengthen Europe's manufacturing ecosystem for net-zero technology products, better known as the Net-Zero Industry Act (NZIA). The NZIA aims to facilitate investments in green technologies by simplifying authorisation procedures, such as permit procedures for strategic projects. It also proposes to facilitate market access for strategic technology products, to improve the skills of the European workforce in these sectors (notably through the establishment of net-zero industry academies) and to create a platform to coordinate EU action in this field. The provisional agreement introduces a number of improvements to the main objectives of the NZIA proposed by the Commission, such as streamlined rules for construction permit procedures, the creation of net-zero industrial valleys and more clarity on criteria for public procurement and auctions. The provisional agreement now needs to be formally adopted by both institutions. The NZIA will largely apply directly upon its entry into force.

    Commission presents recommendation on 2040 emissions reduction target
    On 6 February, the Commission published a detailed impact assessment report on possible pathways to achieve the agreed goal of making the EU climate neutral by 2050. Based on its impact assessment, the Commission recommends a 90% net reduction in greenhouse gas emissions by 2040 compared to 1990 levels. This recommendation is the start of a political debate and an open dialogue with all stakeholders. The political and legislative decision on the 2040 target will be made by the next EC, following this year’s EU elections. The Commission states that reaching the 90% target will require a number of enabling policy conditions, including (i) full implementation of the agreed 2030 framework; (ii) ensuring the competitiveness of the European industry; (iii) a greater focus on a just transition; (iv) a level playing field with international partners; and (v) a strategic dialogue on the post-2030 framework, including with industry and the agricultural sector. See also the accompanying Q&A's on the EU Industrial Carbon Management Strategy and the Communication on Europe's 2040 climate target and path to climate neutrality by 2050.

    Commission adopts communications on 2040 emission reduction targets and carbon management
    On 6 February, the Commission adopted two communications. The first communication is on implementing the 2030 energy and climate framework as the stepping stone to reaching the 2040 climate target and climate neutrality in 2050, in line with the European Climate Law. The second communication is on industrial carbon management, setting out how CO2 capture, utilisation and storage could contribute to achieving the EU's climate change objectives. The Commission announced that it will start working on the necessary regulatory framework for transportation and storage of CO2.

    Provisional agreement on right-to-repair Directive
    On 2 February, the Council and Parliament reached a provisional agreement on a proposed Directive on the repair of goods, also known as the right-to-repair (R2R) Directive. The Directive will apply to products already in scope of EU repair requirements and aims to improve the reparability of these goods, including after the warranty period. The directive (i) obliges manufacturers to repair in-scope goods; (ii) introduces a European consumer information form on repair services; and (iii) establishes an EU online repair information platform. After repair, the manufacturer’s liability is extended for at least 12 months. The provisional agreement maintains the consumer’s right to choose between repair and replacement. The provisional agreement must now be formally adopted by both institutions and will apply 24 months after its entry into force.

    Two new EU Regulations to phase down harmful F-gases and ozone-depleting substances
    On 29 January, the Council announced the adoption of two Regulations to phase down fluorinated gases (F-gases) and other substances that cause global warming and deplete the ozone layer. Under the new rules, the consumption of hydrofluorocarbons (HFCs) will be completely phased out by 2050. On the other hand, the production of HFCs, in terms of production rights allocated by the Commission to produce HFCs, will be phased down to a minimum (15%) as of 2036. Both production and consumption will be phased down on the basis of a tight schedule with a degressive quota allocation (Annexes V and VII). It also sets dates for the complete phase-out of the use of F-gases in air conditioning, heat pumps and switchgears.

  • February 2024

    Platform on Sustainable Finance launches 'Compendium of Market Practices’ report
    On 29 January, the EU Platform on Sustainable Finance published a report providing insights into how the EU Taxonomy and sustainable finance framework support financial and non-financial actors in their net zero transition. The report focuses on seven stakeholder groups: corporates, credit institutions, investors, insurers, auditors and consultants, small and medium-sized enterprises and the public sector. The report spans three areas: (i) the EU sustainable finance framework for business strategy and transition planning; (ii) finance and transactions, including observations on the adoption of EU tools and frameworks by market participants; and (iii) reporting, monitoring, and assurance. The report’s annex provides case studies for each stakeholder group.

    Council adopts negotiation mandate on EU regulation on forced labour
    On 26 January, the European Council adopted its negotiation mandate on the proposed EU regulation on forced labour. The proposal prohibits the placing, making available on the EU market and export to third countries of products made with forced labour. Competent national authorities should investigate reasonable indications that products were made with forced labour. In cases of forced labour, the authorities shall withdraw or ban the placement and export of these products. Companies may be required to dispose of the products. The Council mandate proposes, inter alia, that the EC should take over (pre-)investigations into forced labour if the potential violation is of Union interest. The EP, the EC and the Council will now initiate inter-institutional negotiations on the proposal.

    Final text of the CSDDD proposal available
    On 24 January, the European Parliament, Committee and Council concluded technical negotiations on the proposal for the Corporate Sustainability Due Diligence Directive (CSDDD), resulting in a final text. This text will be voted on by the Council and JURI committee in February. A final vote on the text is expected in April 2024. Read more in our latest update on the CSDDD proposal.

    ECB publishes report on risks from misalignment of banks’ financing with EU climate objectives
    On 23 January, the European Central Bank (ECB) published a report on the climate transition risks for banks’ credit portfolios. The report shows that the euro area banking sector is significantly misaligned with EU climate objectives and may therefore be exposed to increased transition risks. In addition, around 70% of banks are exposed to elevated reputational and litigation risks. Banks can use the approach described in the report to further develop their alignment assessment capabilities in order to identify the transition risks they face and to comply with the forthcoming disclosure requirements under the EBA’s Implementing Technical Standards on Pillar 3. In a recent blog, ECB Executive Board Member Frank Elderson argues that banks should identify, measure and, above all, manage transition risks in the same way as any other material risk.

    NGFS publishes guidance on the purpose and use of the NGFS scenarios
    On 23 January, the Network for Greening the Financial System (NGFS) published a technical document on the purpose and use of the NGFS scenarios. Since their initial release, the NGFS scenarios have played an important role in helping central banks, supervisory authorities and other financial institutions explore the implications of different potential futures related to climate change and transition. The document sets out the purposes and practical applications of the NGFS scenarios, recognising the need for scenario users to clarify what they are trying to achieve and to consider how the scenarios enable them to meet their objectives and specific needs, and concludes with frequently asked questions. The online version will be updated regularly.

    EBA launches a consultation on guidelines on ESG risk management
    On 18 January, the European Banking Authority (EBA) launched a public consultation on draft guidelines setting out requirements for institutions to identify, measure, manage, and monitor ESG risks, including through plans aimed to address risks arising from the transition towards a climate-neutral EU economy. These guidelines set out principles for the development and content of institutions’ plans under the Capital Requirement Directive (CRD6) to monitor and adequately address the financial risks stemming from ESG factors, including those arising from the transition process towards the EU's 2050 climate neutrality goal. The consultation is open until 18 April 2024.

  • January 2024

    Dutch Ministry of Finance launches consultation on climate measures in the financial sector
    On 21 December, the Dutch Ministry of Finance launched an internet consultation on additional measures to strengthen the financial sector’s contribution to the climate transition. The consultation concerns both legislative and non-legislative measures. As described in the consultation document, it specifically seeks input on three legislative options: (i) the inclusion of a duty of efforts to align loans and investments with the targets of the Paris Agreement in the Dutch financial supervision regime; (ii) an obligation to prepare and implement a specific climate plan; and (iii) additional legal obligations on engagement. Participants are requested to specifically consider European legislative initiatives in their answers. Decision making on the results of the consultation will be left to the next cabinet. The consultation closes on 15 February 2024.

    ESMA presents methodology for climate risk stress testing and analysis of the financial impact of greenwashing controversies
    On 19 December, the European Securities and Markets Authority (ESMA) published two articles: (i) a risk analysis on Dynamic modelling of climate-related shocks in the fund sector and (ii) a risk analysis on the Financial impact of greenwashing controversies. The first article presents a methodological approach to modelling climate-related shocks in the fund sector, which includes dynamic impacts, such as investor inflows and outflows and portfolio rebalancing by managers. The analysis focuses on the overall direction of these effects, and shows that investor outflows can amplify fund value losses following an initial shock. The second article explores the impact of greenwashing controversies on companies’ financial performance, and shows how data on past greenwashing controversies can be useful for monitoring greenwashing-related risks. It also outlines the challenges of using such data.

    ECB and ESRB report ‘Towards macroprudential frameworks for managing climate risks to the EU financial system’
    On 18 December, the European Central Bank (ECB) and the European Systemic Risk Board (ESRB) published a joint report setting out three detailed macroprudential frameworks for managing risks to the EU financial system. The first framework covers financial stability risk surveillance. It takes stock of advances in climate risk impact measuring and modelling, and proposes a list of indicators for regular financial stability risk monitoring. The second framework concerns macroprudential policy options. It outlines the features of a robust strategy as well as an initial operational design based on existing instruments, which can be scaled up as further information and more tailored policy options emerge. The third framework takes a first look at prospective financial stability impacts stemming from nature degradation, which could exacerbate the financial stability impacts of climate change.

    EBA publishes opinion and report on green loans and mortgages
    On 15 December, the European Banking Authority (EBA) published an opinion and report on green loans and mortgages, in response to a call for advice from the European Commission. The EBA highlights that green lending currently represents a limited share of the banking sector’s overall lending. In order to facilitate a more active participation of banks in the green loans market, the EBA proposes, amongst others, the introduction of a voluntary EU label for green loans based on a common EU definition. The EBA also proposes to integrate the concept of green mortgage and its key sustainability features in the Mortgage Credit Directive.

    Provisional agreement on the CSDDD
    On 14 December, the Council and European Parliament reached a provisional agreement on the Corporate Sustainability Due Diligence Directive (CSDDD). The CSDDD will require large companies (including certain non-EU companies) and mid-size companies active in ‘high-risk’ sectors to conduct due diligence on human rights and environmental impacts in their own operations and their subsidiaries’ operations, as well as the operations of ‘business partners’ in their ‘chains of activities’. Notable changes to the Commission proposal include that the mandatory climate plan must align with the European climate neutrality targets, including fossil fuel-related exposures. Among others, the plan should contain time-bound reduction targets in five-year steps from 2030 to 2050 for the company’s scope 1, 2 and 3 emissions.

    Following debate on this topic, financial service providers will only have to conduct due diligence on their own and upstream operations (subject to a review clause for future inclusion of downstream operations), while also being in scope of the climate plan obligation.

    The disclosure requirements of the CSDDD will be aligned with the CSRD. Disclosures will need to be accessible through the European Single Access Point (ESAP). National supervisory authorities will be able to impose a minimum maximum penalty payment of 5% of the company’s net worldwide turnover if CSDDD provisions are violated. The provisional agreement also specifies the civil liability rules, for instance setting a minimum limitation period of five years and adding that companies can be held liable if they ‘intentionally or negligently’ failed to prevent, mitigate or end an adverse impact as listed in Annex I. The provisions on directors’ duty of care were deleted. A vote on the final text is expected in March 2024. See here for further insights.

    EBA publishes roadmap on the implementation of the EU banking package
    On 14 December, the EBA published its roadmap on the implementation timeline of the EBA mandates under the EU banking package that implements the final Basel III reforms in the EU. The banking package encompasses several innovations in the prudential framework for credit institutions. The first phase of the roadmap will also see the first mandates under the Capital Requirements Directive (CRD) in the area of ESG, which is reaffirmed as a clear EU priority.

    NGFS publishes recommendations for assessing nature-related economic and financial risks
    On 13 December, the Network for Greening the Financial System (NGFS) published guidance that addresses the growing consensus that nature degradation poses risks to individual financial institutions and the financial system in general. The guidance (i) suggests approaches for developing narratives that could serve as starting points for assessing nature-related financial risks; (ii) reviews a range of modelling approaches for nature-economy models and biophysical models; (iii) examines alternative modelling approaches; and (iv) concludes with a list of options for central banks and supervisors to develop quantified nature-related scenarios to guide them in responding dynamically to emerging nature-related risks.

    EIOPA launches consultation on the prudential treatment of sustainability risks
    On 13 December, the European Insurance and Occupational Pensions Authority (EIOPA) launched a consultation on the prudential treatment of sustainability risks by insurers. This consultation paper follows a 2022 discussion paper which outlined the scope, methodologies and data sources for the analysis on prudential treatment of sustainability risks. The consultation focuses on three conceptual areas: (i) the potential link between prudential market risks in terms of equity, spread and property risk and transition risks; (ii) the potential link between non-life underwriting risks and climate-related risk prevention measures; and (iii) the potential link between social risks and prudential risks, including market and underwriting risks. The consultation closes on 22 March 2024.

  • December 2023

    ECB examines net-zero commitments of global banks
    On 28 November, the European Central Bank (ECB) published a paper examining the net-zero commitments of 30 Global Systemically Important Banks (G-SIBs). The paper discusses potentially problematic entity-level disclosures relating to net-zero commitments, and specifically addresses greenwashing risks. The ECB concludes that comparability and reliability of net-zero commitments should be improved by defining a common minimum framework, as is already partially the case in the European Union. The ECB reiterates that incomplete or poor net-zero commitments and insufficient transition risk management may give rise to litigation and reputational risks, as well as supervisory action by prudential supervisors.

    Final consultation on draft UN Guide on human rights due diligence with an environmental focus
    On 28 November, the UN Working Group on Business and Human Rights and the UN Development Programme published a draft guide for businesses on human rights due diligence and the environment. In addition, a public consultation was launched to allow respondents to provide final feedback on the draft guide by 15 January 2024. The guide aims to provide practical tools for conducting human rights due diligence with a particular focus on the environment, and sets out four ‘essential components’ for conducting such due diligence. The guide also specifies the correlations between the aforementioned due diligence and other due diligence-related guidelines, frameworks and assessments.

    Provisional agreement on gas and hydrogen Directive
    On 27 November, the European Council and the European Parliament reached a provisional agreement on the Directive on gas and hydrogen markets, as originally proposed in December 2021. As part of the broader EU hydrogen and decarbonised gas markets package, the Directive provides investment rules for hydrogen networks and consumer protection rules. The proposed Regulation will be agreed upon at a later stage. The provisional agreement on this Directive can be seen as a first step towards the much-needed legal certainty in the emerging European hydrogen market.

    Council adopts position on right-to-repair Directive
    On 22 November, the European Council adopted its negotiation mandate (position) on a proposed Directive on the repair of goods, also known as the right-to-repair (R2R) directive. The Directive aims to remove obstacles that discourage consumers from having broken products repaired, such as inconvenience, lack of transparency or lack of access to repair services. The Council supports the general objectives of the proposed Directive, while introducing some improvements regarding the obligation to repair, the information form and the online platform. The Council aims to maintain the choice between repair and replacement. Negotiations with the EP will start in the coming weeks.

    EP adopts position on EU Regulation on the certification of carbon removals
    On 21 November, the EP adopted its position on a Regulation establishing a framework for the certification of carbon removals. The proposed framework covers both technological and natural carbon removals, providing quality criteria as well as verification and certification rules. The framework aims to quantify, monitor and verify carbon removals with the goals of increasing their use, building trust with stakeholders and countering greenwashing. EP will now start its negotiations with EU Member States.

    UN Emissions Gap Report 2023
    On 20 November, the UN Emissions Gap Report 2023 was released. This annual report tracks the gap between (i) greenhouse gas emission levels consistent with the Paris Agreement and (ii) current and projected emission levels under the Nationally Determined Contributions (NDCs) to the Paris Agreement. The report notes that global emissions have increased by 1.2% between 2021 to 2022. Full implementation of current NDCs would result in a 2.5-2.9°C temperature rise by 2100, slightly higher compared to the 2022 Report (2.4-2.8°C). The 2023 Report aims to inform the next round of NDCs under the Paris Agreement, which countries are requested to submit in 2025.

    Provisional agreement on revised Directive to protect the environment through criminal law
    On 16 November, the EP and the Council reached a provisional agreement on the revision of the Environmental Crime Directive, as originally proposed by the EC in December 2021. Following debate on this matter, the provisional agreement provides that permits issued under administrative law in principle do exempt from criminal liability, except if they were issued fraudulently or by corruption, extortion or coercion. The revision clarifies several definitions of environmental crimes, including on illegal timber trade, deforestation-linked products and water abstraction. The Directive also sets a minimum on several maximum sanctions for natural and legal persons, and adds ‘ecocide’ as an aggravating circumstance in environmental crimes (without using that word explicitly in the legal text). The EP is expected to formally adopt the proposal in February 2024.

    DNB: "Insurers have made progress in embedding sustainability, but most are not halfway there yet"
    On 15 November, DNB published an article and a presentation on a self-assessment by over 20 insurers of the sustainability maturity level of their organisations. The majority of the insurers indicated that at least one of their directors bears responsibility for sustainability. Many insurers are also committed to sharing knowledge and expertise, and actively involve key functions in sustainability-related decisions. Although many insurers have climate plans and commitments in place, respondents encounter difficulties when translating intentions into concrete investment- and insurance-related actions. DNB will conduct a more comprehensive self-assessment in 2024, with the goal of determining DNB’s sectoral sustainability-related enforcement priorities for the coming years, if any.

    ECB’s Frank Elderson - Formal action against banks on climate risk management
    In a keynote speech on 14 November, ECB Board Member Frank Elderson spoke about formal action by the ECB regarding Climate-related and Environmental (C&E) risk management. Some banks have missed the March 2023 interim deadline set in the ECB’s Guide on C&E Risk Management, as they have not yet performed an adequate materiality assessment of the impact of C&E risks across their portfolios. The ECB has therefore started to adopt enforcement measures, such as the potential imposition of penalty payments. Elderson also expressed the ECB’s view that banks should be in scope of the Corporate Sustainability Due Diligence Directive (CSDDD).

    AFM 2024 outlook: More action needed to assess climate risks in the Dutch housing market
    On 7 November, the AFM published its 2024 Trend Monitor (Trendzicht) on recent developments and associated risks, bottlenecks and control measures. With regard to sustainability, the AFM warns that the Dutch housing market is lagging behind in assessing climate risks. Homebuyers and homeowners would be insufficiently informed about climate risks that are not part of the financing process. Foundation damage and flooding are the most prominent risks, as they can have potentially large financial consequences, but are mostly uninsurable. The AFM publication ‘Factoring climate risks into housing prices’ provides an in-depth discussion of this issue.

    Updated NGFS climate scenarios for central banks and supervisors
    On 7 November, the Network of central banks and supervisors for Greening the Financial System (NGFS) published an update of its NGFS Climate Scenarios. These scenarios aim to capture the impact of possible energy transition pathways and physical risks on banks and the economy. The scenarios are now underpinned by new and more granular data to better reflect a more disorderly future, taking into account recent developments. Two new scenarios have been introduced: one that explores the consequences of delayed, divergent and therefore overall ineffective climate action, and a Paris-aligned scenario that is driven by significant behavioural change and avoids the worst physical risk impacts. Finally, droughts and heatwaves have been added to the modelling of acute physical risks.

  • November 2023

    Dutch Climate and Energy Outlook 2023: estimates of greenhouse gas emissions, renewable energy and energy savings
    On 26 October, the Dutch Environmental Assessment Agency (PBL) published its annual Climate and Energy Outlook 2023 (Klimaat- en Energieverkenning 2023). The report shows that well-developed Dutch and European transition plans could yield an additional 5 percentage points of emission reductions, allowing for a reduction of 46 to 57%. To achieve the highest target all elements have to be aligned, including unmanageable factors such as weather and electricity imports, and a more concrete transition plan is required.

    EBA recommendations: enhance the Pillar 1 framework
    On 12 October, the EBA published a report on the role of environmental and social (E&S) risks in the prudential framework for credit institutions and investment firms. The EBA recommends short-term and medium- to long-term improvements to the risk categories of the Pillar 1 framework, using a risk-based approach. The short-term improvements should be implemented over the next three years as part of the revised Capital Requirements Regulation and Capital Requirements Directive (CRR3/CRD6). The EBA is for instance proposing to incorporate environmental risks in stress testing programmes, encourages financial institutions to incorporate E&S risk factors into external credit assessments, and require identification whether E&S factors constitute triggers of operational risk losses. The EBA recommendations follow the Basel Committee's agreement on 5 October to consult on a Pillar 3 disclosure framework for banks' exposure to climate-related financial risks. The Committee’s consultation paper is expected to be published by November 2023. 

    Dutch consultation on renewable hydrogen initiatives
    On 6 October, the Ministry of Economic Affairs (EZK) launched a consultation on the main proposed changes to the subsidy scheme for scaling up fully renewable hydrogen production via electrolysis (OWE). The consultation connects to EZK’s intention to organise a new round of the subsidy scheme in 2024. The scheme is aimed at companies interested in developing electrolysis projects.

    ACM policy rules on the supervision of sustainability agreements
    On 4 October 2023, the Dutch Authority for Consumers and Markets (ACM) published its final policy rules on the application of competition law in the supervision of sustainability agreements between corporates. The key message of the rules is that the ACM wants to allow businesses to collaborate in order to achieve sustainability goals. The rules inter alia provide for an informal guidance process and a description of collaborations that will not be fined by the ACM. Some of these collaborations are complementary to the EC Guidelines on horizontal cooperation agreements. The ACM’s policy rules entered into force on 6 October.

    NGFS publishes a conceptual note on short-term climate scenarios
    On 3 October, the Network for Greening the Financial System (NGFS), a group of central banks and financial supervisors, published a Conceptual note on short-term climate scenarios. The note proposes five short-term climate impact scenarios (i.e., for the next three to five years) that explore the potential short-term macro-financial risks associated with climate change. The scenarios will serve as a basis for future work by the NGFS and its members on short-term climate stress tests.

    ESMA to launch a Common Supervisory Action on MiFID II requirements
    On 3 October, the ESMA announced the launch of a Common Supervisory Action (CSA) with National Competent Authorities (NCAs) on the integration of sustainability into firms' suitability assessments and product governance processes and procedures in 2024. The CSA will cover specific aspects, such as how firms collect information on clients' sustainability preferences and assess the sustainability-related suitability of investments. The ESMA expects that these efforts will contribute to a consistent application of EU rules and enhance investor protection. The launch of the CSA follows ESMA's recent update of the guidelines on suitability and the product governance guidelines.

  • October 2023

    Supervisory framework for assessing nature-related financial risks
    On 28 September, the OECD published a methodological supervisory framework for assessing nature-related financial risks, as part of a broader project of the EC to incorporate biodiversity-related risks into financial supervision. By translating biodiversity-related risks into financial risks, the report aims to enable central banks and financial supervisors to assess biodiversity-related financial risks, impacts and dependencies in the financial sector. The report also contains a useful list of references.

    Updated IEA Net Zero Roadmap 
    On 26 September, the International Energy Agency (IEA) released an update of its influential Net Zero Roadmap, which was last published in May 2021. The report re-explores how the energy sector can achieve the IEA’s cost-efficient Net Zero Emissions by 2050 Scenario (NZE). Despite global CO2-emissions reaching record highs in 2022, the report is generally positive about the global uptake of renewable energy since 2021. CCUS and green hydrogen deployment are relative laggards. Annual coal, oil and natural gas usage is projected to peak before the end of this decade under current climate policies. The updated report supports the first global stocktake of the Paris Agreement, in preparation for the COP28 climate conference in Dubai. In addition, the IEA’s World Energy Outlook 2023, published on 24 October, provides an in-depth analysis of the global energy system outlook.

    Speech by EC President Von der Leyen: "How can we close the global clean investment gap?"
    On 21 September, EC President Ursula von der Leyen delivered a keynote speech at the Global Citizen NOW climate session. She stressed the importance of closer cooperation between public and private sectors. Von der Leyen identified four areas for improvement: (i) green bonds as a key tool to mobilise capital from private investors who want to make climate-positive investments, (ii) carbon pricing as a market-based instrument, (iii) trustworthy carbon credits, and (iv) accelerating the global transition to clean energy.

    Provisional agreement on empowering consumers for the green transition
    On 20 September, the European Council and the European Parliament have reached a provisional political agreement on the Directive to empower consumers for the green transition. The proposal aims at enhancing consumers’ rights by adapting the Unfair Commercial Practices Directive and the Consumer Rights Directive to the green transition. Of interest are the inclusion of certain types of greenwashing as unfair market practices, the clarification regarding unfair market practice claims and the introduction of a harmonised format for voluntary commercial durability guarantees. See our previous newsletter for more information on the proposed Consumer Empowerment Directive.

    EP study explores impact of EU due diligence legislation on SMEs
    On 15 September, the EP published a study on the effects of the CSDDD proposal on small and medium-sized enterprises (SMEs) in the EU and third countries, using the German supply chain act (Lieferkettengesetz) as an example which may provide lessons for EU due diligence legislation. The study identifies key challenges which SMEs face when dealing with the requirements of the supply chain act, and discusses support measures that SMEs need or are already using. The study also provides a number of recommendations, such as targeted capacity building for SME suppliers in developing countries, and simplification of reporting requirements for SMEs in Europe.

    First UN Global Stocktake report: "ambition and implementation must be accelerated rapidly"
    On 8 September, the United Nations Framework Convention on Climate Change (UNFCC) published the Global Stocktake - synthesis report, which provides the most comprehensive overview of climate action since the adoption of the Paris Agreement in 2015, as well as a roadmap for governments. The technical findings highlight existing and emerging opportunities, and provide creative solutions to bridge well-known gaps. The report will serve as the basis for the first Global Stocktake meeting at the UN Climate Change Conference COP 28 in Dubai.

    ECB economy-wide climate stress test: faster green transition would benefit firms, banks and households
    On 6 September, the ECB published the results of its second economy-wide climate stress test. The findings indicate that the best way to achieve a net-zero economy for firms, banks and households in the euro area is to accelerate the green transition. Immediate and decisive action (the accelerated transition scenario) would bring significant benefits for firms, households, and the financial system, not only by keeping the economy on the optimal net-zero emissions path (thus limiting the impact of climate change), but also by rapidly reducing their energy expenses and financial risks.

    82 UN member states sign Treaty of the High Seas
    Following its adoption in March of this year, 82 UN Member States (including the EU and the Netherlands) have signed the Treaty of the High Seas, also known as the Biodiversity Beyond National Jurisdiction (BBJN). The Treaty's primary goal is to achieve the '30 by 30' objective, which means effectively conserving and managing 30% of the earth's land and sea by 2030. This target was established in the Kunming-Montreal Global Biodiversity Framework and aims to promote SDG 14. To accomplish this, the Treaty sets up a procedure to establish large-scale marine protected areas in the high seas. Furthermore, the treaty provides rules on the sharing of benefits from marine genetic resources and technologies, as well as rules on environmental impact assessments before conducting activities in the high seas and dispute resolution mechanisms.

  • September 2023

    Update on Financial Sector Climate Commitment
    On 20 July, the Dutch Association of Banks, the Dutch Association of Insurers, the Federation of Dutch Pension Funds and the Dutch Fund and Asset Management Association published an updated version of the Financial Sector Climate Commitment. This document aims to provide guidance on the elements of climate action plans and on measurement of the CO2 contents of loans and investments.

    ECB opinion on CSDDD – role of transition planning and transition finance
    On 14 July, the ECB published its opinion on the proposal for a Directive on corporate sustainability due diligence (CSDDD). A separate technical working document sets out specific and reasoned drafting suggestions where the ECB recommends changes to the proposal. An interesting observation: the ECB stresses the need to consider and recognise the role of transition planning in firms when introducing civil liability in relation to the adverse effects of lending. This is crucial to ensure that banks can finance the transition efforts of clients that have not yet met the EU climate targets and the Paris Agreement but intend to do so. The ECB also notes that good management of transitional risks includes process risk management.

    European Council on export credits for renewable energy, climate change mitigation and adaptation and water projects
    On 14 July, the Council adopted two decisions setting the EU’s position on proposed changes to the Arrangement on Officially Supported Export Credits. The first decision modernises the arrangements in order to enhance flexibility. The second decision concerns the proposed amendment of the Sector Understanding on export credits for renewable energy, climate change mitigation and adaptation, and water projects. The purpose of the change is to expand the scope of the Sector Understanding and allow exports from a broader range of industries to benefit from its terms. The decisions enter into force immediately after their adoption.

    Dutch Parliament debates criminalising ecocide
    On 13 July, the Dutch Parliament launched the consultation on the legislative proposal for a criminal act on ecocide. The proposed act aims to introduce a new norm in criminal law: that the environment has an intrinsic value and that seriously damaging that environment, by a human act or omission, is a criminal offence. To enable enforcement, the concept of ‘ecocide’ will be introduced in Dutch law: criminal and serious degradation of the environment by (potentially) damaging acts or omissions. This means that commission of ecocide would be included as a criminal offence in the Penal Code.

    ESMA public statement on sustainability disclosure in prospectuses
    On 11 July, ESMA published a public statement on sustainability disclosure in prospectuses, directed at National Competent Authorities to encourage coordinated action on sustainability-related disclosure in prospectuses under current legislation. ESMA emphasises that issuers and advisers should also consider the statement when preparing a Prospectus Regulation-compliant prospectus with sustainability-related disclosure. Key takeaways include the need for substantiating sustainability claims, avoiding misuse of risk factors, and meeting additional disclosure requirements. Specific requirements for items like 'sustainability linked bonds' and 'use of proceeds bonds' are mentioned and ESMA stresses consistency between prospectuses and marketing materials regarding sustainability disclosures. There is some overlap with the focus points that AFM uses for its review of prospectuses relating to the issuance of sustainable bonds and other prospectuses that contain sustainability-related information.

    EC Recommendation on sustainable transition finance
    On 7 July 2023 The EC Recommendation published in the Official Journal of the EU on (page 19) clarifies the concept of transition finance. The Recommendation provides extensive guidance on transition finance and transition planning and on using the existing framework to support solid transition planning. Undertakings, financial intermediaries and investors, member states and supervisory authorities could raise, provide or approach transition finance through the voluntary use of sustainable finance tools as set out in this Recommendation.

    DNB update on Sustainable Finance Strategy
    DNB published a new version of its Sustainable Finance Strategy 2021-2025 on 6 July, once again stressing the strategic priority of fully integrating sustainability into all our core functions. An important statement is that DNB will be more stringent in monitoring the management of sustainability risks and voluntary commitments made by financial institutions around sustainability. In 2024, DNB will announce when compliance by financial institutions will be assessed and when violations will be sanctioned. The Climate Commitment of 2022 is indicated to become a more important element in DNB's supervision.

    Legislative proposal to prevent discrimination in personnel recruitment and selection
    On 14 March, the House of Representatives adopted a legislative proposal pursuant to which all employers in the Netherlands are obliged to have practices in place to prevent discrimination in the recruitment and selection of personnel. As proposed, an employer must have written practices aimed at preventing labour market discrimination at its disposal. Such practices shall prescribe that the recruitment and selection procedures are based on job requirements relevant for the position, whereas the procedures and methods must be transparent and verifiable, and systematically organised. The legislative proposal is currently before the Dutch Senate.

  • July 2023

    Updated OECD Guidelines for Multinational Enterprises on Responsible Business Conduct
    On 8 June, the updated OECD Guidelines for Multinational Enterprises on Responsible Business Conduct were released. Key updates include important recommendations on the alignment with internationally agreed goals on climate change and biodiversity, on due diligence and on the disclosure of responsible business conduct information. The adjusted Guidelines were adopted by 51 Ministers in the Ministerial Council Meeting and inter alia contain specific recommendations on Paris aligned absolute and intensity based CHG reduction targets including scope 3 emissions. According to the press release, the 2023 update responds to urgent social, environmental, and technological priorities facing societies and businesses.

    Information Note on UN Guiding Principles
    In June, the UN Working Group on Business and Human Rights published its first Information Note on climate change and the UN Guiding Principles (UNGPs). The note explains how the UNGPs can help integrating the actual and potential impacts of climate change with other human rights-related impacts caused by, contributed to or linked with business activities. It may influence additional soft law duties for states and companies regarding their climate change-related impacts.

    7th National SDGs Report ‘The Netherlands develops sustainably’
    The ‘7th National Sustainable Development Goals Report - The Netherlands develops sustainably’ provides data from the government, local authorities and social sectors on the achievement of SDGs. The report shows both the positive developments and the challenges.

    ESMA consultation on sustainability in suitability and product governance
    As part of the EC's sustainable development initiative, MiFID II has been updated to integrate sustainability requirements for investment firms. The European Securities and Markets Authority (ESMA) subsequently updated its Guidelines on suitability and product governance requirements. On 16 June, ESMA published a Call for evidence on the evolution of the market and on how firms are applying the new legal requirements. The aim is to gather input and views on consumer needs, industry initiatives and challenges on the topics of suitability and product governance and to ensure supervisory convergence.

    Dutch Ministry submitted its Innovation Strategy for Aviation
    On 13 June, the Dutch Ministry of Infrastructure and Water Management submitted its Innovation Strategy for Aviation to the Dutch Parliament with a view to reducing the negative impact of aviation on the climate and living environment. The strategy identifies opportunities to innovate and describes the role of the Ministry in this regard. The Dutch Parliament needs to decide whether it consents with the strategy.

  • June 2023

    EP adopts position on proposed CSDDD
    On 31 May, the European Parliament discussed the proposed Corporate Sustainability Due Diligence Directive. Its aim is to oblige large corporates to address negative effects on human rights and the environment in their value chain. And therefore: to make these effects the subject of continuous investigation. The proposal is being presented as a 'gigantic legal revolution' and still heavily debated. Critics claimed that the rules impose red tape on corporates and harm competitiveness in view of increased competition from the US and China. The European Parliament adopted its position in respect of the proposal on 1 June. As a next step in the legislative process, the European Parliament and the Member States will enter into negotiations to establish the final wording of the directive.

    Draft Decree on embedding the updated Corporate Governance Code
    On 30 May, the Draft Decree on embedding the updated Corporate Governance Code was published as part of the four week preliminary scrutiny procedure at the Lower House of Parliament. After approval, the Decree will enter into force on 1 January 2024, establishing the updated reporting obligation for management reports covering financial years commencing on or after 1 January 2023. This means that compliance with the updated code in 2023 will be reported for the first time in 2024. For more information on the updated Code, see our 20 December 2022 newsletter.

    Dutch legislative proposal for mandatory appointment of confidential advisor
    On 23 May, the House of Representatives of the Dutch Parliament adopted the legislative proposal for the mandatory appointment of a confidential advisor. Its objective is to ensure that every employee has a legal right of access to a confidential advisor and to ensure the position of the confidential advisor as such within an organisation. The legislative proposal contributes to reducing inappropriate behaviour in the workplace and creating a safe working environment for employees in general.

    Dutch guideline on reports of sexual transgressive behaviour in the workplace
    On 17 May, government commissioner for combating inappropriate behaviour and sexual violence Marïette Hamer published a handbook on reports of sexually transgressive behaviour in the workplace. This guide is intended to help in relation to the entire process of dealing with a report and the (required) steps that follow, including the various interventions and, if appropriate and desired, conducting an investigation.

    Regulation on deforestation and forest degradation adopted by EU Council
    On 16 May, the EU Council adopted the proposed regulation on deforestation and forest degradation caused by EU consumption and production. The regulation lays down rules on the import and export of cattle, cocoa, coffee, oil palm, soya and wood which are expected to apply as of mid-2024 or mid-2025. 

    EU Council adopts approach to proposed Ecodesign Regulation
    On 15 May, the EU Council adopted its approach towards the proposed revision of the Ecodesign Regulation. The proposal aims to establish a framework for setting ecodesign requirements for sustainable products. As a next step in the legislative process, the EU Parliament will adopt its approach to the proposal.

  • May 2023

    Additional measures to further reduce CO2 emissions by 2030 announced by Dutch government
    On 26 April, the Dutch government announced a new set of rules as to achieve the Dutch climate goal by 2030. The proposed measures aim to reduce CO2 emissions by an addition 22 megatons. In the upcoming months, the relevant ministries will further develop the proposed measures. Part of the measures is expected to enter into force as from 2024. See the press release of the Dutch government for more information.

    EU Council adopts 'Fit for 55' package
    On 25 April, the EU Council adopted (amendments to) several directive and regulations in order to align EU legislation with the 2030 climate targets, i.e. to reduce net greenhouse gas emissions by at least 55% by 2030 and to achieve climate neutrality in 2050. To this end, for instance, the EU introduces a Social Climate Fund to reduce the impact of the emissions trading system for vulnerable households, micro-enterprises and transport (applying as from 30 June 2024). See the press release of the EU Council for all the amendments and initiatives.

    Frank Elderson (ECB): “2023 as a key milestone in stepping up the management of climate and environmental risks”
    The EBC expects financial institutions to submit a thorough risk analysis on their climate and environmental risks by the end of 2024. After 2024, identifying a risk as material but not adequately addressing it will no longer be tolerated. Things are moving too slowly, believes Frank Elderson (ECB Vice-Chair of the Supervisory Board and Member of the Executive Board). Banks are taking steps in their climate policies, but they must considerably increase the pace of progress. “We see the glass filling up slowly, but it is not yet even half full”, he said at a meeting of the Foreign Bankers' Association on 27 March 2023. See for the way ahead for banks and supervisors the full speech here.

    Dutch Ministry of Finance – ESG Policy Agenda for the Financial Markets
    On 16 March, the Dutch Ministry of Finance published its Policy Agenda for the Financial Markets for the upcoming years (for the agenda, click here). It formulates two policy goals on sustainability: (1) the financial markets are drivers towards creating a sustainable economy; and (2) reporting standards provide insight into all relevant sustainability factors and prevent greenwashing. Furthermore, the Minister announced that she would consider how the 2024 mortgage loan standards could take greater account of the energy efficiency of houses.

    EC’s request for a one-off stress-testing exercise
    On 8 March, the EC invited EIOPA, ESMA and EBA to conduct a one-off climate risk scenario analysis to assess, in cooperation with the ECB and the ESRB, the resilience of the financial system on the way to the EU’s targets for 2030 (see for the invitation here). The one-off exercise should give a better understanding of the vulnerabilities in the financial system and its capacity to support green investments under stress.

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