EU financial services watchdog the European Securities and Markets Authority (ESMA) has published its work plan for 2025, which includes its sustainable finance-related priorities. ESMA intends to build on its work on greenwashing risks achieved during 2022-24 by further clarifying supervisory expectations, developing tools that enable supervisors to best address related risks, and enhancing the effectiveness and quality of ESG disclosures. “ESMA will collaborate with participating NCAs [national competent authorities] to support the development of supervisory tools and methodologies to detect and address potential greenwashing practices by supervised financial market participants,” the report read. ESMA will also monitor the implementation of guidelines such as the fund names rules. In addition, the watchdog outlined plans to develop technical standards and additional guidance on several aspects relating to the Green Bonds Regulation, MiFID II, Corporate Sustainability Reporting Directive, and Benchmarks Regulation. “ESMA will, alongside the other ESAs [European Supervisory Authorities], publish their annual report on the extent of voluntary disclosures of principal adverse impact in the Sustainable Finance Disclosure Regulation (SFDR) [and] may provide guidance and Q&As for sustainability disclosures under the SFDR,” it said, noting that the European Commission’s assessment and review of the regulation may generate requests for advice from ESMA. To support the EU’s broader transition efforts, ESMA intends to monitor initiatives related to transition finance and will issue guidance on capacity-building to promote an effective and consistent framework.
