On June 1, ISDA and the Association for Financial Markets in Europe submitted a response to a European Commission (EC) consultation on the Delegated Act on Article 8 taxonomy disclosures. The associations recommend that assets held in the trading portfolio should be excluded from the green asset ratio’s (GAR’s) computation and associated disclosure obligation and that only banking book exposures should form its basis. Moreover, the associations note that although derivatives should be included in the relevant key performance indicators measuring alignment with sustainability purposes, this should happen gradually following a more in-depth assessment of their current uses by EU policy-makers and regulators. Finally, the associations point out that the inconsistent treatment of derivatives in the GAR is not optimal from a methodological consistency standpoint, as it could structurally disfavour banks. The paper calls on the EC to reassess its approach for derivatives holistically in the GAR until this matter has been appropriately examined in more detail.
Documents (1) for ISDA Responds to EC Consultation on Taxonomy Disclosures
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