As a result of growing demand and interest in sustainable financial products, the European Union has updated its policies to accommodate this new reality.
The EU’s financial markets regulator and supervisor, the European Securities and Markets Authority (ESMA), is changing its Union Strategic Supervisory Priorities (USSPs) to include ESG disclosures.
The USSPs are a set of guidelines that ESMA uses to make sure financial markets in the EU run smoothly. It is important for ESMA to focus its supervisory efforts on the most pressing risks to effectively protect investors and contribute towards market integrity.
According to the press release, the regulator aims to gradually promote increased scrutiny of ESG disclosures through effective and consistent supervision. This also implies building supervisory capabilities to fully embed sustainable finance into daily supervisory work and supervisory culture.
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