On June 9, ISDA published a position paper setting out its views on the European Commission’s (EC) Sustainability Omnibus Package. In the paper, ISDA urges European authorities to:

• Ensure a proportionate, harmonized and symmetrical approach to the use of derivatives across the EU’s sustainable finance framework in line with the EU’s Platform on Sustainable Finance derivatives recommendations, both at entity and product level (eg, taxonomy and Sustainability Finance Disclosure Regulation  (SFDR)).
• Permanently remove the trading book key performance indicator (KPI) from the Taxonomy Disclosures Delegated Act, as trading book activities involve positions held by banks on behalf of their customers. This KPI is meaningless as banks do not have visibility on clients’ investment objectives.
• Include structured products under scope of the SFDR during the upcoming SFDR level 1 review to ensure an equal treatment with funds products given all types of assets are currently eligible for consideration under the Markets in Financial Instruments Directive sustainability preferences framework.
• Ensure the guidance required to adopt Article 18 of the Corporate Sustainability Due Diligence Directive on ‘model contractual clauses’ will be purely guidance and that, while companies may take that guidance into account, they will still be permitted to use any contractual wording they consider appropriate for compliance with their obligations under articles 10 and 11.
• Encourage the scaling up of high-quality, high-integrity carbon credits, certified under the EU’s Carbon Certification Removal Framework and independent and/or under international crediting programs.
• Include international verified carbon credits for the purposes of the EU Emissions Trading System and the EU Carbon Border Adjustment Mechanism if such credits successfully overcome issues related to consistency, comparability and clarity.