Controversy brewing over Commission’s plan to simplify sustainability reporting rules

The European Commission's plans to simplify and ease EU sustainability reporting legislation could prompt a collision between the competitiveness agenda of president Ursula von der Leyen and advocates of a continuing focus in Europe on measures to monitor companies' impact on the climate and the broader environment, as well as the social effects of their activities, especially abroad. The Commission initiative is targeting the Corporate Sustainability Reporting Directive, for which the first reports, by the largest companies, are due this year, as well as the Corporate Sustainability Due Diligence Directive and the EU's green taxonomy. There are already reports that it will propose a drastic reduction in the scope of the CSDDD, which will apply from July 2026 and requires companies not only to identify and report on environmental and social issues in their supply chains but to take remedial action – especially after Qatar threatened to cut off natural gas supplies to Europe if it is threatened with multi-billion-euro penalties for failing to undertake the decarbonisation of its fuel. The Spanish government has urged the Commission not to water down the legislation, although it welcomes moves to simplify reporting processes and says the direct and indirect reporting burden on smaller companies could be scaled back.

Spanish government warns against weakening EU corporate sustainability reporting rules

The Spanish government has warned the European Commission against weakening EU corporate sustainability requirements. It welcomes moves to simplify processes, but says that the bulk of sustainability legislation should be left as it is to ensure the certainty required to boost capital flows toward the green transition. Madrid does suggest that the reporting burden for smaller companies could be lightened and that the 'do no significant harm' principle be streamlined to ensure that more investments can be considered as sustainable under the EU's green taxonomy.

Best source: Euractiv

HSBC defers net zero targets from 2030 to 2050, blaming slowness of wider economic transition

HSBC is delaying its goal of reaching net zero across its activities from 2030 to 2050, blaming the slowness of the transition in the economy as a whole. The bank says it has little control over technological advances, demand or policy influence on the pace of change, and that its original target was based on using carbon credits to offset emissions in its supply chain, which would now be invalidated by the most recent Science Based Targets initiative guidelines. HSBC has now set a target of reducing emissions from its operations, business travel and supply chain by 40% over the course of this decade. Chief sustainability officer Julian Wentzel says the delay will mean the bank can take a more measured approach to oil and gas lending.

Best source: Reuters (subscription required)

Esma and national regulators launch year-long survey of internal audit at fund management businesses

The European Securities and Markets Authority and national regulators have launched a year-long joint review of retail and alternative fund managers in the EU for adherence to compliance and internal audit requirements, with Esma due to publish a report in 2026. The common supervisory action will examine whether managers have established effective compliance and internal audit functions with adequate staffing, authority, knowledge and expertise to carry out their duties, and whether they are meeting their legal requirements.

Best source: Investment Executive

See also: European Securities and Markets Authority

Delfin looks to boost stake in Generali to as much as 20% ahead of shareholder vote on board composition

Delfin, the holding company of the late Italian billionaire Leonardo Del Vecchio, plans to increase its stake in the country's largest insurer Generali from 9.8% to as much as 20%, subject to approval from regulator Ivass. Delfin chairman Francesco Milleri says the company will soon be ready to increase its shareholding above 10% after receiving authorisation. The move could increase Delfin's influence ahead of the shareholders' vote on Generali's board composition, with current CEO Philippe Donnet seeking another term despite frequent criticism from Delfin and other investors. Mediobanca, Generali's largest shareholder, is expected to propose its own slate of board candidates.

Best source: Reuters (subscription required)

See also: Milano Finanza (in Italian)

Norwegian wealth fund to continue sustainability investment and corporate engagement

Norway's sovereign wealth fund says it will continue ESG investments and engagement with companies on sustainability issues, including with large technology companies in its portfolio. Carine Smith Ihenacho, chief governance and compliance officer at Norges Bank Investment Management, which runs the Government Pension Fund Global, says the current backlash against sustainability, especially in the US, is impacting markets, companies and investors, but the asset manager remains convinced that ESG is intrinsic to financial performance and long-term value creation. Around 19% of the fund's total investments at the end of last year were in technology stocks, including Apple, Microsoft and Nvidia. The fund gained 13% in value during 2024, taking its total assets under management to NOK19.74trn (€1.7trn).

Best source: Reuters (subscription required)

See also: Chief Investment Officer

European Commission says 17 member states have missed the deadline to implement board gender balance legislation

The European Commission has notified 17 of the 27 EU member states that they have fallen short of full implementation of the Gender Balance on Corporate Boards Directive by the deadline of December 28. The legislation requires women to make up at least 40% of directors of large listed companies in the EU. The Commission has sent letters of formal notice, the first step in the infringement process, to Belgium, Bulgaria, Czech Republic, Denmark, Estonia, Ireland, Greece, France, Cyprus, Latvia, Luxembourg, Hungary, the Netherlands, Austria, Poland, Portugal and Romania, which have two months to respond.

Best source: European Commission

See also: Bulgaria News Agency

European Commission advisory body sets out recommendations to simplify EU green taxonomy reporting

The Platform on Sustainable Finance, an advisory body to the European Commission, has put forward a set of evidence-based recommendations to simplify reporting under the EU's green taxonomy. As part of a broader programme to address the competitiveness of the EU economy, the recommendations are intended to reduce companies' reporting burden by one-third, focusing on simplification, data access and regulatory coherence. The proposals include amending 'do no significant harm' assessments and reporting obligations by distinguishing between non-financial and financial entities, turnover and capital expenditure, and EU as opposed to non-EU exposure. The body recommends introduction of a materiality principle and thresholds for key performance indicator requirements for non-financial companies, as well as allowing the use of proxies for the green asset ratio and green investment ratio for financial institutions.

Best source: Sustainable Views (subscription required)

See also: Reuters (subscription required)

See also: European Commission

Activist hedge fund firm Elliott takes stake in BP as investors question renewables strategy

Activist hedge fund manager Elliott Management has taken a stake in UK oil and gas producer BP, whose share price has been in the doldrums following significant underperformance relative to its competitors. BP shares have fallen by nearly 8% over the last five years, while those of Shell and France's TotalEnergies are up by around one-third. BP has invested heavily in renewable energy projects but has undergone multiple senior management changes, and in the past three years lowered investment in its clean energy, leaving investors unsure of its long-term strategy. Elliott Management may be looking to push the group to focus purely on oil and gas and divest its renewables businesses altogether.

Best source: Bloomberg

See also: City A.M.

Irish regulator’s inquiry finds Permanent TSB CEO failed to protect borrowers with home loans

An inquiry conducted on behalf of the Central Bank of Ireland has found that former Permanent TSB CEO David Guinane did not act in the best interest of customers with home loans in 2009. It says Guinane breached consumer protection rules in the bank's handling of borrowers who were denied more attractive tracker mortgage loan rates when their fixed-rate loan periods expired. The head of the inquiry, Peter Hinchliffe, says, however, that Guinane did not intend to harm customers and was not guilty of dishonesty. The central bank is seeking a penalty of as much as €500,000.

Best source: Irish Independent

Generali investor considers challenging reappointment of CEO Philippe Donnet

One of Generali's largest investors is considering challenging the reappointment of CEO Philippe Donnet and is evaluating alternative candidates for the top job. Industrialist Francesco Gaetano Caltagirone, who holds a 6.9% stake in the insurer and previously attempted to remove Donnet three years ago, criticises the CEO for what he says is Generali's insufficient growth and also has reservations about a proposed joint venture with France's BPCE group. Other potential candidates could include Flavio Cattaneo, currently CEO of Italian electricity and gas utility Enel, although Caltagirone's final strategy at the insurer's shareholders' meeting in May is still undecided.

Best source: Reuters (subscription required)

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