ICMA’s response to the 'Call for feedback on the Platform for Sustainable Finance's report on minimum safeguards


7 September 2022 ICMA has responded to the call for feedback on the Platform for Sustainable Finance's report on minimum safeguards.

▪ ICMA welcomes the draft report which provides proposed advice on the last missing component of the EU Taxonomy Regulation, the functioning of the minimum safeguards (MS)

▪ However, ICMA believes that it is urgent to first resolve existing EU Taxonomy usability issues related to product alignment and regulatory reporting as outlined in its publication “Ensuring the usability of the EU Taxonomy”

▪ We agree that proposed EU Regulation such as the Corporate Sustainability Due Diligence Directive (CSDDD) and the European Sustainability Reporting Standards (ESRS) that EFRAG is currently working on under the Corporate Sustainability Reporting Directive (CSRD) could serve as proxies to confirm compliance with the MS at least for entities under scope of CSDDD and CSRD

▪ While CSDDD and ESRS are not final and therefore still subject to change, and without comparable mandatory regulation for non-EU companies and SMEs not under scope, MS risk further adding to already existing usability challenges with the EU Taxonomy

▪ ICMA therefore proposes flexibility, with MS compliance continuing to be assessed through proxies such as conformity with relevant national legislation, controversy screening and broader sustainability reviews. This would continue until CSDDD and ESRS are finalised and their usability and effectiveness for establishing compliance with MS has been assessed

▪ Further clarification is needed on how to establish compliance with MS in more complex cases such as for banks that are issuing sustainable bonds (re)financing loan portfolios


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