Association for Financial Markets in Europe (AFME)

InfluenceMap Score
D
Performance Band
48%
Organisation Score
Sector:
Financials
Head​quarters:
London, United Kingdom
Official Web Site:
Wikipedia:

Sustainable Finance Lobbying Overview: Despite communicating top-line support for sustainable finance policy in Europe, the Association for Financial Markets in Europe (AFME) has generally engaged against decisive regulatory intervention in this area.

Top-line Messaging on Sustainable Finance Policy:AFME has stated support for the role of the finance industry in meeting EU climate goals and has commented on the need for financial markets to be "geared towards sustainability" but has stopped short of articulating the need for systemic reforms to the financial sector. In a consultation response to the European Commission in 2020, AFME warned against policy actions that would penalize investments/ lending to highly emitting sectors.

Position on Taxonomies: While consistently communicating support for a sustainable finance taxonomy on its website, AFME engaged in-depth with EU policymakers in favor of a watered-down version of the policy. For example, in a statement on the European Parliament negotiations in March 2019 they opposed expansion to cover environmentally harmful activities or the application of the taxonomy beyond products marketed as sustainable. In feedback to the Technical Expert Group (TEG) in September 2019, AFME supported the weakening of energy generation thresholds, which would allow unabated natural gas to be defined as 'green' under the taxonomy. In feedback to the Commission on the Renewed Sustainable Finance Strategy in 2020, AFME again opposed the development of a taxonomy of environmentally harmful activities. In a 2021 whitepaper, AFME further supported the creation of a “transition framework” alongside the taxonomy, with unclear impact on the policy and stated concerns in the harmonization of disclosures and taxonomy regulation to Cabinet members of Commissioner McGuinness. Also in 2021, AFME offered broad support for the UK Green Taxonomy in its website and a press release.

Position on Regulated Corporate ESG Disclosure: AFME’ has offered cautious support for sustainable corporate reporting, often suggesting a less prescriptive approach to disclosure requirements. In feedback to the European Commission on the review of the Non-Financial Reporting Directive (NFRD) in 2020, AFME was supportive of mandatory ESG reporting requirements, including on ESG impacts, as well as the expansion of the scope of the NFRD to cover large unlisted companies and a simplified framework for SMEs. In 2021, AFME stated further support for the Corporate Sustainability Reporting Directive (CSRD) in a press release but in feedback to the Commission it cautioned against the requirement on multinational companies and suggested a phased-in approach. In response to the draft European Sustainability Reporting Standards in 2022, AFME cautioned against the volume and complexity of metrics and suggested a less granular and phased-in approach to implementation. In response to the Financial Conduct Authority (FCA) in the UK in 2021, it also opposed certain disclosure requirements proposed, such as extending the scope to listed debt and suggested a delay in implementation of TCFD metrics due to a lack of data availability.

Position on ESG Standards, Labels & Benchmarks: In a 2019 consultation response, AFME supported weaker requirements on disclosure for EU Benchmarks Regulation, opposing the inclusion of scope 3 emissions and suggesting a delay to implementation. In a Commission consultation in 2020, AFME stated broad support for the EU Green Bond Standard (EU GBS), whilst cautioning against alignment with “a very restrictive taxonomy” and not supporting the Commission’s suggestion to create a social bond standard. During 2022, AFME opposed the European Parliament’s proposed amendment to the EU GBS, which would make disclosures mandatory for all green bonds issued in the EU in press releases and media outlets. It later expressed support for the Parliament’s compromise by which the EU GBS would remain voluntary, and further suggested the exclusion of requirements for transition plans. In a 2021 consultation response, AFME also cautioned against UK regulators considering the development and creation of a UK green bond standard

Position on Integrating ESG into Investor Duties: In response to the ESA’s Sustainable Finance Disclosure Regulation (SFDR) consultation on investor ESG disclosure in 2020, AFME argued for a less prescriptive approach, including a reduced number of mandatory indicators. Also in response to the European Commission in 2020, it suggested a broader description of sustainability under MiFID II amendments, with an unclear impact on the stringency of the policy In a 2021 press release, AFME offered broad support for the UK’s Sustainability Disclosure Requirements (SDR).

Position on the integration of ESG factors into risk management, prudential regulation and stress testing: In a 2021 whitepaper, AFME suggested that ESG risk integration should allow for non-prescriptive and flexible methodologies and supported a phased-in approach to ESG integration into Basel’s Pillar 2 framework. In response to the European Banking Authority (EBA) in 2022, it supported the risk-based approach to integration of climate and environmental risks into prudential regulation but cautioned against adjustment factors and double materiality. In response to the European Central Bank in 2020, AFME supported a delay to recommendations on climate-related risks for banks, although in a 2022 press release, AFME appeared to support the ECB’s climate stress tests as a learning exercise.

Lobbying Transparency: AFME has disclosed policy positions for all relevant sustainable finance policies, including some detail of activities to influence these policies. It is also transparent about its general and board membership, although it has not disclosed full membership of committees and working groups.

Details of Organization Score

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