An investor initiative

in partnership with

- R E S P O N S I B L E I N V E S T M E N T -
This presentation is being provided to you by PRI Association (“the PRI”) and its subsidiaries for information purposes only. The presentation is incomplete without
reference to, and should be viewed solely in conjunction with, the oral briefing provided by the PRI. No reliance may be placed on its accuracy or completeness. Neither
the presentation, nor any of its contents, may be reproduced, or used for any other purpose, without the prior written consent of the PRI. PRI Association is incorporated
in England & Wales, registered number 7207947 and registered at 25 Camperdown Street, London E1 8DZ.

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The PRI
Investor-led, membership-based association, supported by the United Nations

The PRI works with its international network of

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signatories to put the six Principles for
Responsible Investment into practice.

Its goals are to understand the investment

implications of environmental, social and 2700+
governance issues and to support signatories in
integrating these issues into investment and
ownership decisions.

90+

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 Responsible investment policy is widespread
And the pace is increasing

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Number of policy instruments

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PENSION FUND CORPORATE DISCLOSURE

STEWARDSHIP CODES
REGULATIONS GUIDELINES

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Update on the Action Plan on Financing Sustainable Growth
Latest developments per action area

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Establish EU Sustainable  On the legislative front, the European Parliament adopted its Report on the taxonomy in April 2019.
Taxonomy  On the technical front, technical details (screening criteria) are being developed by the TEG

2  For Green Bond Standard, the TEG has released a final report on an EU Green Bond Standard in June
Create Standards and 2019.
Labels  For the EU Eco-Label, the Joint Research Center has released the preliminary report on EU Ecolabel
criteria for Financial Products in March 2019. The JRC closed the consultation in April 2019.

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Foster Investment in A mapping on investment gaps and financing took place in Q3 2018, best practices for sustainable
Sustainable Projects investments were exchanged on (inter-)national and EU level in Q4 2018.

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Incorporate Sustainability in Draft delegated acts to MiFID II and IDD to ensure that advisors will take into account the sustainable
Investment Advice preference of clients were published in January 2019

5  On the legislative front, the co-legislators have agreed on a new generation of low-carbon benchmarks
Develop Sustainability  On the technical front, the TEG published an interim report presenting its recommendations for minimum
Benchmarks standards for low-carbon benchmarks and minimum disclosure requirements for ESG benchmarks in June
2019.

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Update on the Action Plan on Financing Sustainable Growth
Latest developments per action area
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Integrate ESG in Ratings
and Market Research
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Clarify institutional
investors and asset
managers duties
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Incorporate sustainability in
prudential requirements
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Strengthen Sustainability
Disclosure & Accounting
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Foster Sustainable
Corporate Governance
ESMA published its final guidance on disclosure requirements for Credit Rating Agencies on the
integration of sustainability factors in July 2019.
 The European Commission, building on ESMA’s advice, has released a tender for a project on
sustainability ratings and research.
ESMA and EIOPA submitted their technical advice on the integration of sustainability risks in May 2019. The
Commission, in collaboration with ESMA and EIOPA, will develop the delegated acts to MiFID II, AIFMD,
UCITS Directive, IDD, and Solvency II.
The Commission requested EIOPA to analyze the impact of solvency II on sustainable investments in
September. EIOPA closed its call for evidence in March 2019 and will submit its opinion to the Commission in
Q3 2019.
The Commission published non-binding guidelines on climate-related information in June 2019.
The Commission asked the ESAs to collect and share evidence on short term market pressure arising from
capital markets
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EU Taxonomy
Mobilising private capital to meet climate, environmental and sustainability commitments
Technical work
Led by the Technical Expert Group, the objective of
this work is to draft technical screening criteria for
the first set of taxonomy-compliant activities.
Legislative work
The legislative work will set: three requirements are:
 Requirements on investors and Member States to
use the taxonomy
 The ongoing governance of the Taxonomy
 A framework for the European Commission to
adopt a delegated act to implement the Taxonomy
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Taxonomy: in a nutshell

A list of economic activities that are considered environmentally sustainable for

What it is investment purposes

What it is not
A mandatory list to invest in, nor a standard, nor an exclusion list

 Contributes to providing much needed investments for sustainable development

Why it is good  Taxonomy provides clarity and transparency on environmental sustainability, enabling
informed decision-making in order to foster investments in environmentally sustainable
activities.

 Member States when setting out “requirements on market actors in respect of financial
products or corporate bonds that are marketed as 'environmentally sustainable'”;
What it has to
be used for  Financial market participants when marketing “financial products as environmentally
sustainable investments, or as investments having similar characteristics”

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Taxonomy: High-level principles

 Environmental objectives proposed to be assessed by the Framework of the EU

Taxonomy Regulation:
1. Climate Change Mitigation
2. Climate Change Adaptation
3. Sustainable Use and Protection Of Water and Marine Resources
4. Transition to a Circular Economy, Waste Prevention and Recycling
5. Pollution Prevention and Control
6. Protection Of Healthy Ecosystems

 Required: determine a list of environmentally sustainable economic activities that:

 Contribute Substantially to a Given Environmental Objective
 Not Significantly Harm Any of the Other 5 Environmental Objectives
 Carried Out With Minimum Safeguards – Labour Rights
 Include Technical Screening Criteria (Methodologies, Metrics, Thresholds)