ESMA_QA_897
Status: ✅ Answer Published
Link to ESMA Q&A tool: https://www.esma.europa.eu/publications-data/questions-answers/897
Regulatory Context
Regulation : BMR
Level 1 Regulation: Benchmarks Regulation (BMR) - Regulation 2016/1011
Level 2 Regulation: No information available
Level 3 Regulation: No information available
Topic: Climate Benchmarks
Subject Matter: ESG factors and ESG objectives
Question
Submission Date: 19 November 2021
What is the difference between taking into account ESG factors and pursuing ESG objectives?
ESMA Answer
Answer Date: 19-11-2021
Answer provided by the European Commission in accordance with article 16b(5) of the ESMA Regulation When it comes to the consideration of ESG factors by benchmarks, the Benchmark Regulation (BMR) refers to benchmarks that “take into account ESG factors” or benchmarks that “pursue ESG objectives”. Both terms refer to the same situation, a benchmark that integrates ESG factors within its methodology. Both sets of terms can be used interchangeably, and should be understood as substitutable. In practical terms, the BMR provides for two scenarios:
either the benchmark or family of benchmarks does not integrate ESG factors in its design: benchmark administrators should clearly mention this as part of methodological and benchmark statement disclosures; or the benchmark or family of benchmarks integrates ESG factors in its design: the benchmark is considered to be taking into account ESG factors or, interchangeably, pursuing ESG objectives, and should therefore comply with all relevant methodological and benchmark statement and transparency requirements.
Disclaimer: The answer clarifies provisions already contained in the applicable legislation. It does not extend in any way the rights and obligations deriving from such legislation nor does it introduce any additional requirements for the concerned operators and competent authorities. The answer is merely intended to assist natural or legal persons, including competent authorities and Union institutions and bodies in clarifying the application or implementation of the relevant legal provisions. Only the Court of Justice of the European Union is competent to authoritatively interpret Union law. The views expressed in the internal Commission Decision cannot prejudge the position that the European Commission might take before the Union and national courts.
This document was automatically extracted from the ESMA EMIR Q&A database.