Global Trustee and Fiduciary Services Bite Sized Issue 7 2023

Global Trustee and Fiduciary Services Bite-Sized | Issue 7 | 2023 8 QUICK LINKS CRYPTOASSETS CYBER DORA ELIGIBLE ASSETS DIRECTIVE FINANCIAL STABILITY BOARD FINTECH LTAF MICA MIFID II/MIFIR NBFI SUSTAINABLE FINANCE/ ESG ASIA EUROPE LUXEMBOURG NORTH AMERICA UNITED KINGDOM EC Publishes its Sustainable Finance Package 2023 On 13 June 2023 the European Commission (EC) published its Sustainable Finance Package (the Package), which the EC says contains measures which will build on and strengthen the foundations of the EU Sustainable Finance Framework. The EC also: (1) added a new set of criteria (which relate to economic activities that make a substantial contribution to one or more of the remaining four environmental objectives under the EU Taxonomy Regulation) as well as targeted amendments relating to the climate change mitigation and adaption environmental objectives; and (2) published a proposal for a Regulation on the transparency and integrity of ESG rating activities (with feedback on the proposal due by 31 August 2023). The EC say the new rules are intended to enable investors to make better informed decisions regarding sustainable investments and will require that ESG rating providers offering services to investors and companies in the EU, to be authorised and supervised by ESMA. The Package also makes recommendations to provide guidance and practical examples to companies and the financial sector in respect of various tools within the EU sustainable finance framework for different purposes. Finally, the EC has published questions and answers on the sustainable finance package and a factsheet. Link to Sustainable Finance Package here NGFS Publishes the Results of its First Public Feedback Survey on Climate Scenarios On 9 June 2023 the Network for Greening the Financial System (NGFS) published the results of its first public feedback survey on climate scenarios, conducted in February 2023. The publication comprises a summary and a presentation. The NGFS states that the survey results affirm the value of the NGFS scenarios as a key tool for identifying and assessing climate risks globally. Looking ahead, the next version of the NGFS scenarios (Phase IV) will be released by the end of 2023 and will include updated data and other improvements. Link to Summary Note here Link to Presentation here MAS to Set Expectations on Credible Transition Planning by Financial Institutions On 8 June 2023MAS announced that it will set supervisory expectations to steer financial institutions’ transition planning processes to facilitate credible decarbonisation efforts by their clients. MAS states that guidance on transition planning will cover financial institutions’ governance frameworks and client engagement processes to manage climate-related financial risks and enable transition in the real economy towards net-zero. MAS also says that financial institutions should not indiscriminately de-risk from particular sectors, but instead carefully assess clients’ transition plans and provide the needed financing for transition where the plans are credible. In reviewing financial institutions’ implementation of transition plans, MAS will recognise that a short-term increase in their financed emissions may arise due to actions supporting longer term climate positive outcomes. MAS will issue a consultation paper later this year. MAS aims to bring together patient, concessionary capital from philanthropies, multilateral development banks, development finance institutions, and donor partners which MAS state will help to crowd in more conventional infrastructure financiers, including banks, and institutional investors. MAS says that details will be announced when the plans are more developed. Building on the strong achievements of the Green Finance Industry Taskforce, MAS together with the financial industry will establish the Singapore Sustainable Finance Association (SSFA) which will initially focus on initiatives to scale voluntary carbon markets, transition finance, and blended finance. Link to MAS Announcement here