LIECHTENSTEIN Law and Practice Contributed by: Bernhard Rankl, Moritz Blasy and Nicolai Binkert, Schurti Partners Attorneys at Law Ltd
9. ESG 9.1 ESG Requirements
Regulation (EU) 2019/2089 (ESG Benchmarks) This regulation requires all providers of bench - marks or indices used to measure the perfor - mance of financial instruments or investment funds to disclose whether and how ESG factors are taken into account. It focuses on increasing transparency and uniformity when it comes to indices and also introduces two new categories of benchmarks, namely the EU climate transition benchmarks and the EU Paris-aligned bench - marks. Regulation (EU) 2020/852 (Taxonomy) This regulation embodies the main pillar of the EU sustainability strategy and the so-called Green Deal. It provides an investment tool and classification system – the so-called green list – that facilitates sustainable investments by iden - tifying to what degree commercial activities can be considered environmentally sustainable. It provides for additional disclosure requirements (eg, on the alignment of financial products with the taxonomy), aims to further strengthen inves - tor protection and to avoid so-called greenwash - ing. The FMA indicated in its latest report on supervi - sory matters relating to sustainable finance that sustainability remains a priority, and that, in view of the topic’s significant relevance, its broad range of subjects, and the vast detail applica - ble to these, it has set supervision priorities. It is thus placing particular emphasis on the envi - ronmental aspects of ESG factors, transparency and disclosure requirements, practices in rela - tion to identifying investors’ sustainability prefer - ences, greenwashing and the integration of ESG into risk management and business strategy.
Liechtenstein, which ratified the Paris Agree - ment on climate change on 9 June 2017, has identified and declared climate risks as a core risk for the financial sector. As a member of the European Economic Area (EEA), Liechtenstein is participating in the EU-wide transformation of the financial sector towards a more long-term thinking and sustainable industry. This trend can also be found in Liechtenstein financing, where ESG-related margin grids or reporting and com - pliance obligations linked to environmental, social and/or governance (ESG) indicators and metrics are commonly used. The main pillars of the remodelling process are the following EU regulations, which have been approved by the Joint EEA Committee and are therefore directly applicable in Liechtenstein: Regulation (EU) 2019/876 (ESG Disclosure) This regulation amends the Capital Requirement Regulation (Regulation (EU) No 575/2013) and introduces an obligation to disclose ESG risks applicable to large financial institutions that have issued securities admitted to trading on a regu - lated market in the EEA. Regulation (EU) 2019/2088 (Sustainability- Related Disclosures) This regulation establishes rules as to how mar - ket participants and advisers have to integrate and consider ESG risk factors in their decision- making and investment advice processes. It also foresees additional disclosure requirements for financial advisers with a view to company-relat - ed as well as product-related information and with a special emphasis on sustainability risks and adverse effects of investment decisions in that regard.
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