France’s financial market regulator, The Autorité des marchés financiers (AMF) has submitted a series of proposals for the European Commission to consider in its efforts to define a renewed sustainable finance strategy by the end of 2020. The proposals cover topics including supervisory frameworks for ESG data, standards for sustainable investment funds, the quality of non-financial disclosures, and sustainable financial products, among others.

In 2018, the European Commission established the EU Action Plan on Financing Sustainable Growth, a set of strategies, including legislative and non-legislative actions and proposals to channel investment flows toward the sustainability goals established in the Paris Agreement and other similar initiatives. Following the European Green Deal communication, adopted in late 2019, the commission launched a consultation, open until July 15, on the renewed sustainable finance strategy. The AMF’s proposals were made in the context of this consultation.

The AMF published a joint document with the ACPR, Banque de France, and General Directorate of the French Treasury highlighting French authorities’ common priorities for sustainable finance. The AMF also published a comprehensive document with proposals focusing on sustainable investment products, and on ESG reporting and ratings. In a statement accompanying the documents, the AMF summarized its proposals for the European Commission as follows:

  • Define a regulatory and supervisory framework for providers of environmental, social and governance (ESG) data and services that should be proportionate and suited to the different models and levels of risk.  The AMF proposes that this supervision be entrusted to ESMA (European Securities Markets Authority).
  • Define minimum standards for investment funds marketed as “sustainable” to prevent the risks of greenwashing, since the current framework only imposes transparency.
  • Create a European label to cover ESG funds, in addition to the future EU Eco-label and to respond to the multiplication of domestic labels.
  • Reinforce green bonds’ transparency with clearer rules for issuers concerning the information to be included in the prospectus.

According to the AMF, the European Union has made significant progress since 2018 on sustainable finance, highlighting in particular advances in tools and standards, disclosure requirements, and the EU taxonomy. The regulator’s recommendations are aimed at further promoting the transition to sustainable finance by creating conditions for effective implementation of the European Commission’s strategy.