Activities of Syed KAMALL related to 2018/0180(COD)
Shadow reports (1)
REPORT on the proposal for a regulation of the European Parliament and of the Council amending Regulation (EU) 2016/1011 on low carbon benchmarks and positive carbon impact benchmarks PDF (786 KB) DOC (94 KB)
Amendments (37)
Amendment 31 #
Proposal for a regulation
Recital 7
Recital 7
(7) Regulation (EU) 2016/1011 of the European Parliament and of the Council30 establishes uniform rules for benchmarks in the Union and caters for different types of benchmark based on their characteristics, vulnerabilities and risks. An increasing number of investors pursue low-carbon investment strategies and take recourse to low-carbon benchmarks to reference or measure the performance of investment portfolios. _________________ 30 Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014 (OJ L 171, 29.6.2016, p. 1).
Amendment 35 #
Proposal for a regulation
Recital 9
Recital 9
(9) Different categories of low carbon indices with various degrees of ambition have emerged in the marketplace. While some benchmarks aim to lower the carbon footprint of a standard investment portfolio, others aim to select only components that contribute to attaining the 2°C degree objective set out in the Paris Climate Agreement. Despite differences in objectives and strategies, allmany of these benchmarks are commonly promoted as low-carbon benchmarks.
Amendment 37 #
Proposal for a regulation
Recital 10
Recital 10
(10) Divergent approaches to benchmark methodologies result in fragmentation of the internal market because users of benchmarks do not have clarity on whether a particular low carbon index is a benchmark aligned to the 2C° objective or merely a benchmark that aims to lower the carbon footprint of a standard investment portfolio. To address potentially illegitimate claims by administrators about the low-carbon nature of their benchmarks, Member States are likely tomay adopt different rules to avoid the ensuing investors’ confusion and ambiguity about the aims and level of ambition underpinning different categories of so called low carbon indices used as benchmarks for a low carbon investment portfolio.
Amendment 47 #
Proposal for a regulation
Recital 12
Recital 12
(12) Therefore, to maintain the proper functioning of the internal market for the benefit of the end-investor, to further improve the conditions of its functioning, and to ensure a high level of consumer and investor protection, it is appropriate to adapt Regulation (EU) 2016/1011 to lay down a regulatory framework for harmonised low carbon benchmarks at Union level.
Amendment 50 #
Proposal for a regulation
Recital 13
Recital 13
(13) It is furthermore necessary to introduceing a clear distinction between low- carbon and positive carbon impact benchmarksnet emission reduction benchmarks, and developing minimum standards for each of these types of benchmarks, will help facilitate consistency across benchmarks that choose to promote themselves as such. While the underlying assets in a low- carbon benchmark should be selected with the aim of reducing carbon emissions of the index portfolio when compared to the parent index, a positive carbon impactnet emission reduction index should only comprise components whose emissions savings exceed their carbon emission contribute to the reduction of carbon emissions to a greater extent that the level of emission they produce. These two new categories of benchmark introduce optional requirements for industry and should only apply when a benchmark administrator decides to create a BMR- compliant low carbon or net emission reduction benchmark. A significant flexibility will be left to benchmark administrators in designing the formula for the calculation of their methodology, enabling market players to develop new strategies for addressing environmental issues.
Amendment 56 #
Proposal for a regulation
Recital 14
Recital 14
(14) Each company whose assets are selected as underlying in a positive impactnet emission reduction benchmark should save more carbon emissions than it produces, hence have a positive impact on the environment. The asset and portfolio managers who claim to pursue an investment strategy compatible with the Paris Climate Agreement should therefore use positive carbon impact benchmarks.
Amendment 64 #
Proposal for a regulation
Recital 15
Recital 15
(15) A variety of benchmark administrators claim that their benchmarks pursue environmental, social and governance (‘ESG’) objectives. The users of those benchmarks do however not always have the necessary information on the extent to which the methodology of those benchmark administrators takes into account those ESG objectives, i.e. the weighting they are given. The existing information is also often scattered and does not allow for effective comparison for investment purposes across borders. To enhance transparency to enable market players to make well- informed choices, benchmark administrators should be required to disclose how their methodology takes into account the ESG factors for each benchmark or family of benchmarks that is promoted as pursuing ESG objectives. That information should also be disclosed in the benchmark statement. The administrators of benchmarks that do not promote or take into account the ESG objectives, should not be subject to this disclosure obligation.
Amendment 66 #
Proposal for a regulation
Recital 16
Recital 16
(16) For the same reasons, administrators of low-carbon and of positive carbon impactnet emission reduction benchmarks should equally publish their methodology used for their calculation. That information should describe how the underlying assets were selected and weighted and which assets were excluded and for what reason. The benchmark administrators should also specify how the low carbon benchmarks differ from the underlying parent index, notably in terms of the applicable weights, market capitalisation and financial performance of the underlying assets. To assess how the benchmark contributes to the environmental objectives, the benchmark administrator should disclose how the carbon footprint and carbon savings of the underlying assets were measured, their respective values, including the total carbon footprint of the benchmark, and the type and source of the data used. To enable asset managers to choose the most appropriate benchmark forto reference in their investment strategy, benchmark administrators should explain the rationale behind the parameters of their methodology and explain how the benchmark contributes to the environmental objectives, including its impact on climate-change mitigation. The published information should also include details on the frequency of reviews and the procedure followed.
Amendment 72 #
Proposal for a regulation
Recital 17
Recital 17
(17) In addition, administrator of positive carbon impactnet emission reduction benchmarks should disclose the positive carbon impact of each underlying asset included in those benchmarks, specifying the method used to determine whether the emission savings exceed the investment asset's carbon footprint.
Amendment 78 #
Proposal for a regulation
Recital 18
Recital 18
(18) To ensure continued adherence to the selected climate-change mitigation objective, administrators of low-carbon and positive carbon impactnet emission reduction benchmarks should regularly review their methodologies and inform users of the applicable procedures for any material change. When introducing a material change, benchmark administrators should disclose the reasons for that change and explain how the change is consistent with the benchmarks’ initial objectives.
Amendment 83 #
Proposal for a regulation
Recital 19
Recital 19
(19) In order to enhance transparency and ensure an adequate level of harmonization, the power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union should be delegated to the Commission to specify further the minimum content of the disclosure obligations that benchmark administrators that take into account the ESG objectives should be subject to, and to specify the minimum standards for harmonization of the methodology of low- carbon and positive carbon impactnet emission reduction benchmarks, including the method for the calculation of carbon emissions and carbon savings associated with the underlying assets, taking into account the Product and Organisation Environmental Footprint methods as defined in points (a) and (b) of point 2 of Commission Recommendation 2013/179/EU31 . It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level, that they consider the progress on, and relevance of, other proposals within the 'Financing Sustainable Growth' Action Plan and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement on Better Law-Making of 13 April 2016. In particular, to ensure equal participation in the preparation of delegated acts, the European Parliament and the Council receive all documents at the same time as Member States’ experts, and their experts systematically have access to meetings of Commission expert groups dealing with the preparation of delegated acts. _________________ 31 Commission Recommendation 2013/179/EU of 9 April 2013 on the use of common methods to measure and communicate the life cycle environmental performance of products and organisations (OJ L 124, 4.5.2013, p. 1).
Amendment 91 #
Proposal for a regulation
Article 1 – paragraph 1 – point 1
Article 1 – paragraph 1 – point 1
Regulation (EU) 2016/1011
Article 3 – paragraph 1 – point 23 a (new)
Article 3 – paragraph 1 – point 23 a (new)
(23a) ‘low-carbon benchmark’ means a benchmark where the underlying assets, for the purposes of point 1(b)(ii) of this paragraph, are selected so that the resulting benchmark portfolio has less carbon emissions when compared to the assets that comprise a standard capital- weighted benchmark and which is constructed in accordance with the standards laid down in the delegated acts referred to in Article 19a(2), weighted or excluded on the basis that they have lower carbon emissions than the underlying assets that comprise a specified parent index, and which is constructed in accordance with the standards laid down in the delegated acts referred to in Article 19a(2). Parent index is an index which defines the underlying pool of assets available for inclusion within a benchmark, before any weighting, selection or exclusion criteria are applied;
Amendment 98 #
Proposal for a regulation
Article 1 – paragraph 1 – point 1
Article 1 – paragraph 1 – point 1
Regulation (EU) 2016/1011
Article 3 – paragraph 1 – point 23 b (new)
Article 3 – paragraph 1 – point 23 b (new)
(23b) ‘positive carbon impactnet emission reduction benchmark’ means a benchmark where the underlying assets, for the purposes of point 1(b)(ii) of this paragraph, are selected on the basis that their carbon emissions savings exceed the asset's carbon footprint assets' contribution to the reduction of carbon emissions is greater than the emission, and which is constructed in accordance with the standards laid down in the delegated acts referred to in Article 19a(2).;
Amendment 108 #
Proposal for a regulation
Article 1 – paragraph 1 – point 2 – point a
Article 1 – paragraph 1 – point 2 – point a
(d) an explanation of how the key elements of the methodology laid down in point (a) reflect environmental, social or governance (‘ESG’) factors for each benchmark or family of benchmarks which is promoted as pursueing or takeing into account ESG objectives;;
Amendment 117 #
Proposal for a regulation
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Regulation (EU) 2016/1011
Title III – Chapter 3 a (new) – title
Title III – Chapter 3 a (new) – title
Low-carbon and positive carbon impact benchmarks net emission reduction benchmarks Or. en (This change in definition applies throughout the proposal)
Amendment 122 #
Proposal for a regulation
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Regulation (EU) 2016/1011
Title III – Chapter 3 a (new) – Article 19 a – title
Title III – Chapter 3 a (new) – Article 19 a – title
Low-carbon and positive carbon impactnet emission reduction benchmarks
Amendment 127 #
Proposal for a regulation
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Regulation (EU) 2016/1011
Title III – Chapter 3 a (new) – Article 19 a – paragraph 1
Title III – Chapter 3 a (new) – Article 19 a – paragraph 1
(1) The requirements laid down in Annex III shall apply to the provision of, and contribution to, low-carbon or positive carbon impactnet emission reduction benchmarks in addition to, or as a substitute for, the requirements of Title II, III and IV.
Amendment 134 #
Proposal for a regulation
Article 1 – paragraph 1 – point 3
Article 1 – paragraph 1 – point 3
Regulation (EU) 2016/1011
Title III – Chapter 3 a (new) – Article 19 a – paragraph 2 – introductory part
Title III – Chapter 3 a (new) – Article 19 a – paragraph 2 – introductory part
(2) The Commission shall be empowered to adopt delegated acts in accordance with Article 49 to specify further the minimum standards for the construction of low- carbon and positive carbon impactnet emission reduction benchmarks, including:
Amendment 152 #
Proposal for a regulation
Article 1 – paragraph 1 – point 4
Article 1 – paragraph 1 – point 4
Regulation (EU) 2016/1011
Article 27 – paragraph 2 a (new)
Article 27 – paragraph 2 a (new)
2a. For each requirement in paragraph 2, a benchmark statement shall contain an explanation of how environmental, social and governance factors are reflected for each benchmark or family of benchmarks provided and published whichwhich is promoted as pursueing or takeing into account ESG objectives.
Amendment 163 #
Proposal for a regulation
Annex I – subheading 1
Annex I – subheading 1
Low-carbon and positive carbon impactnet emission reduction benchmarks
Amendment 172 #
Proposal for a regulation
Annex I – point 1 – introductory part
Annex I – point 1 – introductory part
1. The administrator of a low-carbon benchmark or a net emission reduction benchmark shall formalise, document and make public any methodology used for the calculation of low carbonthe benchmarks, describing the following:
Amendment 175 #
Proposal for a regulation
Annex I – point 1 – point a
Annex I – point 1 – point a
Amendment 180 #
Proposal for a regulation
Annex I – point 1 – point b
Annex I – point 1 – point b
(b) all criteria and methods, including selection, exclusion and weighting factors, metrics, and proxies used in the benchmark calculationmethodology;
Amendment 181 #
Proposal for a regulation
Annex I – point 1 – point c
Annex I – point 1 – point c
Amendment 187 #
Proposal for a regulation
Annex I – point 1 – point d
Annex I – point 1 – point d
(d) the criteria for and the methods of how the low carbonhow the benchmark measures the carbon footprint andemissions or carbon savings associated with the underlying assets in the index portfolio, as relevant;
Amendment 192 #
Proposal for a regulation
Annex I – point 1 – point e
Annex I – point 1 – point e
Amendment 203 #
Proposal for a regulation
Annex I – point 1 – point f
Annex I – point 1 – point f
(f) twhe positive reweighting of low- carbon assets in the low carbon benchmark versus the parent index and there the benchmark has a related parent index based on which it is alternatively weighted, an explanation of why this reweighting is necessary to reflect the chosen objectives of the low carbon benchmark;
Amendment 205 #
Proposal for a regulation
Annex I – point 1 – point g
Annex I – point 1 – point g
Amendment 211 #
Proposal for a regulation
Annex I – point 1 – point h – introductory part
Annex I – point 1 – point h – introductory part
(h) the type and source of input data used for the selection of assets or companies eligible for the low carbon benchmarkand how it is used within the benchmark methodology to determine the selection, exclusion or re-weighting of the underlying assets, including:
Amendment 218 #
Proposal for a regulation
Annex I – point 1 – point h – point i
Annex I – point 1 – point h – point i
(i) carbon emissions generated from sources that are controlled by the company associated with the underlying assets;
Amendment 222 #
Proposal for a regulation
Annex I – point 1 – point h – point ii
Annex I – point 1 – point h – point ii
(ii) emissions from the consumption of purchased electricity, steam, or other sources of energy generated upstream from the company associated with the underlying assets;
Amendment 225 #
Proposal for a regulation
Annex I – point 1 – point h – point iii
Annex I – point 1 – point h – point iii
(iii) emissions that are a consequence of the operations of a company associated with the underlying assets, but that are not directly controlled by the company; , if these are considered within the benchmark methodology;
Amendment 233 #
Proposal for a regulation
Annex I – point 1 – point h – point v
Annex I – point 1 – point h – point v
(v) whether the input data uses the Product and Organisation Environmental Footprint methods as defined in points (a) and (b) of point 2 of Commission Recommendation 2013/179/EUglobal standards such as TCFD (the FSB 'Task Force on Climate-related Financial Disclosures');
Amendment 236 #
Proposal for a regulation
Annex I – point 1 – point i
Annex I – point 1 – point i
(i) twhe total carbon-footprint exposure of the index portfolio and the estimated impacts on climate-change mitigation of the low carbon strategy pursued by the benchmarkre the benchmark has a related parent index based on which it is alternatively weighted based on carbon emissions, the difference in carbon emissions between the benchmark and the parent index;
Amendment 242 #
Proposal for a regulation
Annex I – point 1 – point j
Annex I – point 1 – point j
(j) the rationale for adopting a particular low-carbon methodology strategy or objective and an explanation of whyhow the methodology is appropriate for the calculation of the low-carbon objectives of the benchmarkligned with this strategy or objective;
Amendment 246 #
Proposal for a regulation
Annex I – subheading 3
Annex I – subheading 3
Amendment 252 #
Proposal for a regulation
Annex I – point 2
Annex I – point 2