Global Trustee and Fiduciary Services Bite-Sized Issue 10 2023

Global Trustee and Fiduciary Services Bite-Sized | Issue 10 | 2023 7 QUICK LINKS CBDC DIVERSITY & INCLUSION FINTECH FUND LIQUIDITY OPERATIONAL RESILIENCE SUSTAINABLEFINANCE/ESG ASIA EUROPE LUXEMBOURG NORTH AMERICA UNITED KINGDOM Some of the key findings from the ESAs’ Report are as follows: • The results show an overall improvement compared to the previous year, although there is still significant variation in the extent of compliance with the requirements and in the quality of the disclosures both across financial market participants and jurisdictions. • Disclosures appear easier to find on websites compared to the previous year. • When financial market participants do not consider principal adverse impacts, they should better explain the reasons for not doing so. • Even though they are encouraged to do so under the SFDR, financial market participants are generally not disclosing the extent to which their investments align with the Paris Agreement. The 2023 Report also includes a set of recommendations for the European Commission to consider ahead of the next comprehensive assessment of the SFDR. The ESA’s state the voluntary disclosures of PAI, and additional questions regarding processes and methods in comparing disclosures from previous years, will likely be further analysed in the third annual Report due in 2024. Link to Report here GFANZ Consults on Defining Transition Finance and Considerations for Decarbonisation Contribution Methodologies On 19 September 2023, the Glasgow Financial Alliance for Net Zero (GFANZ) launched a consultation which outlines preliminary considerations regarding defining transition finance and potential for decarbonisation contribution methodologies. The consultation document seeks market feedback on a principles-based approach to segment financial institutions’ portfolios by the four key strategies (1. Climate Solutions: Entities and activities that develop and scale climate solutions; 2. Aligned: Entities that are already aligned to a 1.5 degrees C pathway; 3. Aligning: Entities committed to transitioning in line with 1.5 degrees C-aligned pathways; 4. Managed Phaseout: The accelerated managed phaseout of high-emitting physical assets.) and highlights potential approaches to estimate associated decarbonisation contribution impact, drawing on existing methodologies and concepts. The principles outlined in the consultation document are designed to be voluntary, pan-sector and globally applicable. They build on previous GFANZ publications, existing practices, transition finance frameworks and potential decarbonisation contribution methodologies. The deadline for feedback to this consultation is 2 November 2023. The final report will be published by COP28. Link to Consultation here