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Sustainalytics BV

Sustainalytics

Sustainalytics, a Morningstar Company, is a leading independent ESG and corporate governance research, ratings and analytics firm that supports investors around the world with the development and implementation of responsible investment strategies.

Lobbying Activity

Meeting with Rasmus Andresen (Member of the European Parliament, Shadow rapporteur) and Insurance Europe and

12 Oct 2023 · ESG

Meeting with Ville Niinistö (Member of the European Parliament)

21 Jun 2023 · ESG-ratings (staff level)

Response to Initiative on EU taxonomy - environmental objective

3 May 2023

Executive summary (full feedback in the document uploaded). Morningstar Sustainalytics welcome the opportunity to comment on the new EU taxonomy criteria related biodiversity, circular economy, pollution, and water. Our opinion is based on our experience as a practitioner of the EU Taxonomy (data and SPOs) and long-standing ESG research firm. While we applaud the EC for this proposal, which would enhance the EU Taxonomy, we believe that some important additions and modifications could be considered to further improve the functionality and the usability of these new EU Taxonomy criteria. Its with these two objectives in mind that we are sharing the following recommendations: Raise the level of ambition by prioritizing the most impactful activities: We strongly encourage the EC to add sectors and their related activities with most impact across the 5 objectives and with clear alternative methods (e.g., Agri-food industry). Omitting these critical sectors for another couple years, while including less impactful ones, undermines the functionality of the EU Taxonomy and stop it from fully contributing to the EUs objectives (e.g., climate-neutrality by 2050, biodiversity by 2030, zero pollution vision for 2050). At the same time, while expanding criteria to broader range of activities, we need to be careful not to cover part of the economies where sustainability outcomes are not evident or questionable (e.g., Road and motorway maintenance). Opt for a holistic approach by recognizing activities contributions across different objectives: We understand the need to expand the technical screening criteria to other environmental objectives to increase use cases of the EU Taxonomy and gradually increase the relevancy of alignment figures that needs to be displayed by corporates and investors via advisors and pre-contractual documents. An activity-by-activity approach can lose sight of the bigger picture and interconnections between sectors and their impacts across objectives. Certain activities will significantly contribute to several objectives (e.g., renewable energy: climate and pollution). Allocating each activity to only one objective or look strictly at direct activities (e.g., water criteria) or specific type of actors (biodiversity: public land vs private land) will stop the EU Taxonomy from being a comprehensive and transformative tool. Some safeguards can be put place to avoid double counting in Taxonomy alignment figures. Ensure the usability of the EU Taxonomy by ensuring the applicability of the criteria and managing data gaps: We would like to highlight that we fully endorse the advice produced by the Platform on Sustainable Finance (PSF) regarding the usability of criteria (e.g., NACE codes, machine readability). In addition, we would like to stress the need for guidance on how to deal with the many references to EU legislations when assessing activities carried outside the EU. This has implications on corporate disclosures, the uptake of the EU GBS, and the relevancy of the EU Taxonomy for EU investors who wants to seize investment opportunities both in and outside the EU. In the absence of detailed guidance or equivalence regimes, the prudent use of estimates should continue to be allowed when looking at non-NFRD companies. Please refer to document attached to continue reading our feedback.
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Meeting with Florian Denis (Cabinet of Commissioner Mairead Mcguinness), Katherine Power (Cabinet of Commissioner Mairead Mcguinness), Patricia Reilly (Cabinet of Commissioner Mairead Mcguinness) and

10 Jan 2023 · ESG Ratings