This update covers the period from June until mid-August 2023. The main update is that the EU Commission published a Sustainable Finance Package on 13 June 2023. Our view on the main takeaways for Swedish and Norwegian AIFMs is listed below.

Implementation timeline for sustainable finance regulations published by ESMA

On 3 August 2023, ESMA published an updated implementation timeline for sustainable finance related regulations. The timeline can be accessed here.

Permian comment: ESMA publishes updated implementation timelines on regular basis. It is an excellent document to obtain an overview of the sustainability related legislations and their entry into force.

Sustainable Finance Package

The Sustainable Finance Package published on 13 June 2023 covers the following five main areas:

1. Proposal on a new regulation for ESG rating providers: this regulation will apply to service providers of ESG ratings and includes a definition of ESG ratings. It does not apply to service providers of ESG raw data. Its entry into force is subject to the EU legislative process.
2. Taxonomy delegated acts: the EU Commission adopted the delegated acts that were mentioned in our SFDR Update January – May 2023. Expected entry into force is 1 January 2024.
3. Transition finance: this recommendation provides information on how companies can use tools from the EU for transition finance. An example provided in the recommendation is that companies can use the Taxonomy by reporting Taxonomy-aligned capital expenditure (i.e. since this would generally provide for a higher alignment in a transition context than reporting Taxonomy-aligned revenue). In addition, the recommendation includes information that could be included in a transition plan.
4. Clarification on the link between taxonomy-alignment and sustainable investment under the SFDR: according to this notice, investments in taxonomy aligned environmentally sustainable economic activities can be automatically qualified as “sustainable investment” under the SFDR (provided that the taxonomy-alignment relates to the entire company and not only a part of the company’s economic activities).
5. Staff working document on the Taxonomy: this document includes a summary of the Taxonomy, tools to be used as well as links to other documents related to the Taxonomy.

For further information, please click here.

Permian comment: The package does not include additional reporting obligations on the Manager. For further comments, see below.

1. ESG ratings: to be followed-up with any ESG rating provider used by the Manager closer to the regulation’s entry into force. (Please note that the definition of ESG rating providers is not fully clear to us.)
2. Taxonomy delegated acts: to be considered for Taxonomy assessments as of 2024.
3. Transition finance: to be considered in connection with e.g. preparing a transition plan and for asset managers with a transition finance investment mandate.
4. Clarification on the link between taxonomy-alignment and sustainable investment under the SFDR: the practical implication of this clarification is that any investment that has been assessed as taxonomy-aligned can also be assumed qualify as a sustainable investment under the SFDR. This should mean that if you disclose that you have taxonomy-aligned investments, then those investments could also be disclosed as sustainable investments in the periodic reporting. Please note however, that if you use this new presumption, then you should first read the clarification since there are some exceptions (such as when a portfolio company’s economic activities have not all been assessed as taxonomy aligned).
5. Staff working document on the Taxonomy: this document could be read as a summary of the Taxonomy and includes some useful links.

Amendment to the Norwegian Regulation under the Sustainable Finance Act

On 13 June 2023, the EEA Committee decided to incorporate Regulation (EU) 2022/1214 into Annex IX of the EEA Agreement. This regulation amends Regulation (EU) 2021/2139, which encompassed a broad range of energy-related activities but lacked technical screening criteria for the fossil gas and nuclear energy sectors, and Regulation (EU) 2021/2178, which fell short in achieving full transparency for these economic activities. With the Amendment Regulation, the fossil gas and nuclear energy activities are now recognized as environmentally sustainable activities with respect to EU’s 6 environmental objectives. The Amendment Regulation has been implemented into Norwegian law in Section 2 of the regulation under the Sustainable Finance Act and came into effect 14 June 2023.

For further information, please click here.

Permian comment: Relevant entities should review how the amendments are applicable to them.

Contacts

Anna Berntson Petas: anna.berntson@permian.se

Thomas Blomgren: thomas.blomgren@permian.se

Felicity Guttormsen: felicity.guttormsen@permian.no