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The
EU approved the law last year to increase transparency on how
banks, insurers, financial advisers and funds consider
sustainability risks in their investment decisions and advice to
investors.
It includes consideration for cutting carbon emissions, social
and employee matters, and respect for human rights. Firms will
have to say publicly whether they see risks to sustainability
from their investment decisions.
EU insurance, banking and securities regulators had begun
working on guidelines for the end of December to implement broad
principles sketched out in the law.
The European Commission said in a letter to the regulators
published on Friday that the unprecedented economic and market
stress caused by the COVID-19 crisis means the December deadline
for guidance cannot be met.
"While the delay is unfortunate, it is justified by the need to
guarantee sufficient stakeholder involvement in the process
given the current difficult circumstances," said the letter from
John Berrigan, head of the EU executive's financial services
unit.
Financial lawyers have said that guidelines are essential for
firms to understand what exactly the bloc means by
sustainability risk.
But Berrigan said the entry into force of the EU law does not
depend on guidelines being ready on time, and therefore the
March 10 start date for complying with its high-level
requirements will be maintained.
"In order to provide financial market participants and financial
advisers adequate time for implementation, the regulatory
technical standards will become applicable at a later stage,"
Berrigan said.
(Reporting by Huw Jones; Editing by Kirsten Donovan)
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