[ParlTrack]

Paul TANG, René REPASI, Joachim SCHUSTER, Csaba MOLNÁR, Eva KAILI

Proposal for a directive
Recital 34

(34) To maintain adequate resilience to the negative impacts of ESG factors, institutions established in the Union need to be able to systematically identify, measure and manage ESG risks, and their supervisors need to assess the risks at the level of the individual institution as well as at the systemic level, giving priority to environmental factors and progressing to the other sustainability factors as the methodologies and tools for the assessment evolve. Institutions should assess the alignment of their portfolios with the ambition of the Union to become climate- neutral by 2050 and to reduce CO2 emissions by 55% by 2030 as well as avert environmental degradation and biodiversity loss. Institutions should set out specific plans to address the risks arising, in the short, medium and long term, from the misalignment of their business model and strategy with relevant policy objectives of the Union, included in the Paris Agreement, the Fit for 55 package52 [and the post-2020 Global Biodiversity Framework]. Institutions should be required to have robust governance arrangements and internal processes for the management of ESG risks and to have in place strategies approved by their management bodies that take into consideration not only the current but also the forward-looking impact of ESG factors. These strategies should ensure adherence to the EU's ambition to reduce emissions with 55% in 2030 and to be climate neutral by 2050 and shall ensure a reduction of their financing of activities that significantly harm environmental objectives as defined by Regulation (EU) 2019/852. The collective knowledge and awareness of ESG factors by the management body and institutions’ internal capital allocation to address ESG risks will also be key to drive the change within each and single institution. The specificities of ESG risks as well as their relative novelty means that understandings, measurements and management practices can differ significantly across institutions. To ensure convergence across the Union and a uniform understanding of ESG risks, appropriate definitions and minimum standards for the assessment of those risks should be provided in prudential regulation. To achieve this objective, definitions are laid down in Regulation (EU) No 575/2013 and the EBA is empowered to specify a minimum set of reference methodologies for the assessment of the impact of ESG risks on the financial stability of institutions, giving priority to the impact of environmental factors. Since the forward-looking nature of ESG risks means that scenario analysis and stress testing, together with plans for addressing those risks, are particularly informative assessment tools, EBA should be also empowered to develop uniform criteria for the content of the plans to address those risks and for the setting of scenarios and applying the stress testing methods. Environment-related risks, including risks stemming from environmental degradation and biodiversity loss, and climate-related risks in particular should take priority in light of their urgency and the particular relevance of scenario analysis and stress testing for their assessment. __________________ 52 Communication of the Commission COM(2021)568 final, 14.07.2021, comprising the following Commission proposals: COM(2021)562 final, COM(2021)561 final, COM(2021)564 final, COM(2021)563 final, COM(2021)556 final, COM(2021)559 final, COM(2021)558 final, COM(2021)557 final, COM(2021)554 final, COM(2021)555 final, COM(2021)552 final.

2022/08/22
Committee: ECON

Jonás FERNÁNDEZ, Paul TANG, Eero HEINÄLUOMA

Proposal for a directive
Article 1 – paragraph 1 – point 1 – point c

Directive 2013/36/EU
Article 3 – paragraph 1 – point 9a

(9a) ‘key function holders’ means persons who have significant influence over the direction of the institution but are not members of the management body, including the heads of internal control functions and the chief financial officer, where those heads or that officer are not members of the management body, and the AML Compliance Officer referred to in Article 9(3) of Regulation [please insert reference – proposal for Anti-Money Laundering Regulation - COM/2021/420 final];

2022/08/22
Committee: ECON

Aurore LALUCQ, Paul TANG, Csaba MOLNÁR

Proposal for a directive
Article 1 – paragraph 1 – point 1 – point g a (new)

Article 3 – paragraph 1 – point 69 a (new)

(g a) the following point is added: (69 a) “climate neutrality” means climate neutrality as defined in Article 2 of the Regulation (EU) 2021/1119 (“European Climate Law”). Or. en https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:02013L0036- 20220101&from=EN

2022/08/22
Committee: ECON

Paul TANG, René REPASI, Csaba MOLNÁR

Proposal for a directive
Article 1 – paragraph 1 – point 2

Directive 2013/36/EU
Article 4 – paragraph 4 – subparagraph 2

For the purposes of preserving the independence of competent authorities in the exercise of their powers, Member State shall provide all the necessary arrangements to ensure that those competent authorities, including their staff and members of their governance bodies, can act independently and objectively, ~~without~~and that they are legally distinct from, and functionally independent of, other public and private bodies. Member States shall ensure that members of the governance bodies are appointed for a fixed term, renewable once, based on objective, transparent and published criteria and can be dismissed only if they no longer meet the criteria or have incurred serious criminal convictions. The reason(s) for dismissal shall be publicly disclosed. Member States shall ensure that competent authorities publish their objectives, are accountable for the discharge of their duties in relation to those objectives and are subject to financial control which does not affect their independence. Member Sates shall ensure that competent authorities refrain from seeking or taking instructions, or being subject to influence, whether direct or indirect, from supervised institutions, from any government of a Member State or body of the Union or from any other public or private body. These arrangements shall be without prejudice to the rights and obligations of the competent authorities as stemming from being part of the European system of financial supervision as stemming from Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010*1, the Single Supervisory Mechanism as stemming from Council Regulation (EU) No 1024/2013 of 15 October 2013*2 and Regulation (EU) No 468/2014 of the European Central Bank of 16 April 2014*3, for the Single Resolution Board as stemming from stemming from Regulation (EU) No 806/2014 of the European Parliament and of the Council of 15 July 2014*4.

2022/08/22
Committee: ECON

Jonás FERNÁNDEZ, Paul TANG, Eero HEINÄLUOMA

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/36/EU
Article 27b – paragraph 3 – subparagraph 2

For the purposes of this paragraph and Article 23(2), and with regard to the criterion laid down in paragraph 1, point (c), an objection ~~in writing~~ by the authorities competent for the supervision of the undertakings under Directive (EU) 2015/849 shall constitute a reasonable ground for opposition.

2022/08/22
Committee: ECON

Jonás FERNÁNDEZ, Paul TANG, Eero HEINÄLUOMA

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/36/EU
Article 27b – paragraph 7 – subparagraph 1 – point b

~~(b) a common assessment methodology of the criteria set out in this Article, Article 27g and Article 27l;~~deleted

2022/08/22
Committee: ECON

Jonás FERNÁNDEZ, Paul TANG, Eero HEINÄLUOMA

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/36/EU
Article 27b – paragraph 7a (new)

7 a. EBA shall issue guidelines to specify a common assessment criteria set out in this Article, Article 27g and Article 27l. The EBA shall issue those guidelines by [OP please insert the date = 12 months from date of entry into force of this amending Directive].

2022/08/22
Committee: ECON

Jonás FERNÁNDEZ, Paul TANG, Eero HEINÄLUOMA

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/36/EU
Article 27g – paragraph 3 – subparagraph 2

With regard to the criterion laid down in paragraph 1, point (b), an objection ~~in writing~~ by the competent authorities under Directive (EU) 2015/849 shall constitute a reasonable ground for opposition.

2022/08/22
Committee: ECON

Jonás FERNÁNDEZ, Paul TANG, Eero HEINÄLUOMA

Proposal for a directive
Article 1 – paragraph 1 – point 7

Directive 2013/36/EU
Article 27l – paragraph 3 – subparagraph 2

With regard to the criterion laid down in paragraph 1, point (f), an objection ~~in writing~~ by the authorities competent for the supervision of the undertakings in line with Directive (EU) 2015/849 shall constitute a reasonable ground for negative opinion.

2022/08/22
Committee: ECON

Jonás FERNÁNDEZ, Paul TANG, Eero HEINÄLUOMA

Proposal for a directive
Article 1 – paragraph 1 – point 8

Directive 2013/36/EU
Article 48o – paragraph 6 – subparagraph 1 – point b

(b) the mechanisms for cooperation and information exchange between the authorities referred to in paragraph 5 of this Article, in the context of identifying serious breaches of anti-money laundering rules.deleted

2022/08/22
Committee: ECON

Jonás FERNÁNDEZ, Paul TANG, Eero HEINÄLUOMA

Proposal for a directive
Article 1 – paragraph 1 – point 8

Directive 2013/36/EU
Article 48oa (new)

Article 48oa Guidelines on cooperation with authorities responsible for supervision of anti-money laundering EBA shall, after consulting the European Data Protection Board, issue guidelines on the the mechanisms for cooperation and information exchange between competent authorities and a) the authorities responsible for supervision of anti-money laundering in the Member State in accordance with Directive (EU) 2015/849 in the context of the application of Articles 27b (2), 48c (4) and 48d (4); b) the authorities referred to in paragraph 5 of Article 48o, in the context of identifying serious breaches of anti- money laundering rules. The EBA shall issue those guidelines by [OP please insert the date = 12 months from date of entry into force of this amending Directive].

2022/08/22
Committee: ECON

Joachim SCHUSTER, Paul TANG, René REPASI

Proposal for a directive
Article 1 – paragraph 1 – point 8 a (new)

Directive 2013/36/EU
Article 53 – paragraph 1– subparagraph 2

(8 a) in Article 53 (1), subparagraph 2 is replaced by the following: Confidential information which such persons, auditors or experts receive in the course of their duties may be disclosed only in summary or aggregate form, such that individual credit institutions cannot be identified, without prejudice to cases covered by criminal ~~law.~~ or taxation law. Or. en https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02013L0036-20150101)

2022/08/22
Committee: ECON

Joachim SCHUSTER, Csaba MOLNÁR, Paul TANG, René REPASI

Proposal for a directive
Article 1 – paragraph 1 – point 8 b (new)

Directive 2013/36/EU
Article 53 – paragraph 2

(8 b) in Article 53, paragraph 2 is replaced by the following: ‘2. Paragraph 1 shall not prevent the competent authorities from exchanging information with each other or transmitting information to the ESRB, EBA, or the European Supervisory Authority (European Securities and Markets Authority) (‘ESMA’) established by Regulation (EU) No 1095/2010 of the European Parliament and of the Council (1) in accordance with this Directive, with Regulation (EU) No 575/2013, with Regulation (EU) 2019/2033 of the European Parliament and of the Council (2), with Article 15 of Regulation (EU) No 1092/2010, with Articles 31, 35 and 36 of Regulation (EU) No 1093/2010 and with Articles 31 and 36 of Regulation (EU) No 1095/2010, with Directive (EU) 2019/2034 of the European Parliament and of the Council (3) and with other directives applicable to credit institutions. ~~That information shall be subject to paragraph 1~~ Competent authorities shall not be prevented from exchanging information with national taxation authorities, including where this information originates in another Member State. That information shall be subject to paragraph 1.’ Or. en https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02013L0036-20150101)

2022/08/22
Committee: ECON

Joachim SCHUSTER, Csaba MOLNÁR, Paul TANG, René REPASI

Proposal for a directive
Article 1 – paragraph 1 – point 8 c (new)

Directive 2013/36/EU
Article 56 – paragraph 2 – subparagraph 1 a (new)

(8 c) in Article 56(2), the following subparagraph is inserted: Article 53(1), 54 and 55 cannot preclude the exchange of information between competent authorities and taxation authorities in the same Member State. Or. en https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02013L0036-20150101)

2022/08/22
Committee: ECON

Paul TANG, René REPASI, Csaba MOLNÁR, Eva KAILI

Proposal for a directive
Article 1 – paragraph 1 – point 14 – point b

Directive 2013/36/EU
Article 76 – paragraph 2 – subparagraph 2

Member States shall ensure that the management body develops specific plans and quantifiable targets to monitor and address the risks arising in the short, medium and long-term from the misalignment of the business model and strategy of the institutions, with the relevant Union policy objectives or broader transition trends towards a sustainable economy in relation to environmental, social and governance factors.; These plans shall outline the institution's pathway to reduce financed emissions by 55% in 2030 compared to 1990 levels and to have net 0 financed emissions by 2050. These plans shall also outline the institution's pathway to end financing of activities that do significant harm to environmental objectives as stipulated in Article 17 of Regulation (EU) 2019/852, reducing the exposure to such activities by at least 50% by 2035 compared to current levels.

2022/08/22
Committee: ECON

Aurore LALUCQ, Paul TANG, Csaba MOLNÁR

Proposal for a directive
Article 1 – paragraph 1 – point 14 – point b

Directive 2013/36/EU
Article 76 – paragraph 2 – subparagraph 2

Member States shall ensure that the management body develops specific plans and quantifiable targets to monitor and address the risks arising in the short, medium and long-term from the misalignment of the business model and ~~strategy~~activities of the institutions, with the ~~relevant Union po~~objective to achieve climate neutralicty ~~objectives or broader transition trends towards a sustainable economy~~by 2050 at the latest, set out in Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 (“European Climate Law”), as well as other relevant Union policy objectives in relation to environmental, social and governance factors.;

2022/08/22
Committee: ECON

Aurore LALUCQ, Paul TANG

Proposal for a directive
Article 1 – paragraph 1 – point 14 – point b a (new)

Directive 2013/36/EU
Article 76 – paragraph 2 a (new)

(ba) the following paragraph is inserted: ‘2a. The plans referred to in paragraph 2 of this Article should include transition plans with implementing actions and specific, science-based short-term, medium- and long-term targets, including absolute emission reduction targets for operational and attributable greenhouse gas (GHG) emissions for 2025 and 2030, reviewed every five years up to 2050, to ensure that the institution’s overall business model, strategy and activities are compatible with the transition to a sustainable economy and with the limiting of global warming to 1,5 °C in line with the Paris Agreement with no or limited overshoot and pursuant to the latest recommendations of the IPCC and the European Scientific Advisory Board on Climate Change. For the purposes of this Article, institutions that are required under Article 19a or Article 29a of Directive XXX[CSRD] to report information on environmental, social and governance matters shall integrate their transition plan into their risk management.’

2022/08/22
Committee: ECON

Aurore LALUCQ, Paul TANG

Proposal for a directive
Article 1 – paragraph 1 – point 14 – point b b (new)

Directive 2013/36/EU
Article 76 – paragraph 4 – subparagraph 2

(bb) in paragraph 4, subparagraph 2 is replaced by the following: ‘The management body in its supervisory function and, where one has been established, the risk committee shall determine the nature, the amount, the format, and the frequency of the information on risk which it is to receive. In order to assist in the establishment of sound remuneration policies and practices, the risk committee shall, without prejudice to the tasks of the remuneration committee, examine whether incentives provided by the remuneration system take into consideration risk, ~~capital, liquidity and the likelihood and timing of earnings.~~ including those resulting from the current, short, medium and long-term impacts of environmental, social and governance factors, capital, liquidity and the likelihood and timing of earnings.’ Or. en https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:02013L0036-20150101

2022/08/22
Committee: ECON

Aurore LALUCQ, Paul TANG

Proposal for a directive
Article 1 – paragraph 1 – point 17

4. Competent authorities shall assess and monitor developments of institutions’ practices concerning their environmental, social and governance strategy and risk management, including the plans to be prepared in accordance with Article 76, as well as the progress made ~~and the risks~~towards achieving the targets set in accordance with Article 76 in order to adapt their business models to the relevant policy objectives of the Union ~~or broader transition trends towards a sustainable economy~~, taking into account sustainability related product offering, transition finance policies, related loan origination policies, and environmental, social and governance related targets and limits.

2022/08/22
Committee: ECON

Aurore LALUCQ, Paul TANG

Proposal for a directive
Article 1 – paragraph 1 – point 17

Directive 2013/36/EU
Article 87 a – paragraph 4 a (new)

4a. The Commission shall adopt delegated acts in accordance with Article 148 to provide for the standards and reference methodologies for the transition plans and targets. Those standards shall specify the requirements that institutions are to fulfil in accordance with Article 76(2)and be in line with the requirements of the Directive XXX [CSRD].The Commission shall, at least every three years after its date of application, review any delegated act adopted pursuant to this Article, taking into consideration the technical advice of the European Financial Reporting Advisory Group (EFRAG), and where necessary shall amend such delegated act to take into account relevant developments, including developments with regard to international standards.

2022/08/22
Committee: ECON

Aurore LALUCQ, Paul TANG

Proposal for a directive
Article 1 – paragraph 1 – point 17

Directive 2013/36/EU
Article 87 a – paragraph 5 – subparagraph 1 – point a

~~(a) minimum standards and reference methodologies for the identification, measurement, management and monitoring of environmental, social and governance risks;~~deleted

2022/08/22
Committee: ECON

Aurore LALUCQ, Paul TANG, Csaba MOLNÁR

Proposal for a directive
Article 1 – paragraph 1 – point 17

Directive 2013/36/EU
Article 87 a – paragraph 5 – subparagraph 1 – point b

(b) the content of plans to be prepared in accordance with Article 76, which shall include specific timelines and intermediate quantifiable targets and milestones, in order to address the risks from misalignment of the business model and strategy of institutions with the ~~relevant policy objectives of the Union, or broader transition trends towards a sustainable economy in relation to environmental, social and governance factors~~objective to achieve climate neutrality by 2050 at the latest, set out in Regulation(EU) 2021/1119 of the European Parliament and of the Council of 30June 2021 (“European Climate Law”), as well as other relevant policy objectives of the Union;

2022/08/22
Committee: ECON

Paul TANG, René REPASI, Csaba MOLNÁR, Eva KAILI

Proposal for a directive
Article 1 – paragraph 1 – point 17

Directive 2013/36/EU
Article 87 a – paragraph 5 – subparagraph 1 – point d a (new)

(da) timelines for banks to reduce their financed emissions and their financing of activities that significantly harm environmental activities as outlined in Article 19 of Regulation (EU) 2019/852 so that adherence to the EU's climate and environmental ambitions is guaranteed.

2022/08/22
Committee: ECON

Jonás FERNÁNDEZ, Paul TANG, Eero HEINÄLUOMA

Proposal for a directive
Article 1 – paragraph 1 – point 19

Directive 2013/36/EU
Article 91 – paragraph 1 – subparagraph 1

1. Institutions and financial holding companies and mixed financial holding companies, as approved pursuant to Article 21a(1),(“the entities”), shall have the primary responsibility for ensuring that members of the management body are at all times of good repute, act with honesty, integrity and independence and possess sufficient knowledge, skills and experience to perform their duties and fulfil the requirements set out in paragraphs 2 to 8 of this Article. The absence of a criminal conviction or of ongoing prosecutions for a criminal offence shall not in itself be sufficient to fulfil the requirement to be of good repute and act with honesty and integrity.

2022/08/22
Committee: ECON

Jonás FERNÁNDEZ, Paul TANG, Eero HEINÄLUOMA

Proposal for a directive
Article 1 – paragraph 1 – point 19

Directive 2013/36/EU
Article 91 – paragraph 12 – subparagraph 1 – point e a (new)

(ea) the criteria to determine where there are reasonable grounds to suspect that money laundering or terrorist financing within the meaning of Article 1 of Directive (EU) 2015/849 is being or has been committed or attempted, or there is increased risk thereof in connection with an institution;

2022/08/22
Committee: ECON

Jonás FERNÁNDEZ, Paul TANG, Eero HEINÄLUOMA

Proposal for a directive
Article 1 – paragraph 1 – point 19

Directive 2013/36/EU
Article 91 – paragraph 12 – subparagraph 1 a (new)

For the purpose of developing the guidelines laid down in paragraph (ea), EBA shall work in close cooperation with the Anti-Money Laundering Authority and the European Securities and Markets Authority.

2022/08/22
Committee: ECON

Jonás FERNÁNDEZ, Paul TANG, Eero HEINÄLUOMA