Changes from report parliamentary committee draft to plenary report

RemovedAnnex III – Part 1 – paragraph 1 – point k a (new): (ka) in sufficient detail taking into account the nature of any conflicts of interest that arise, the general nature or sources of conflicts of interest and the steps taken to mitigate those risks;

Added– (i) a credit institution as defined in Article 4(1), point (1), of Regulation (EU) No 575/2013 of the European Parliament and of the Council;

RemovedAnnex III – Part 1 – paragraph 1 – point k b (new): (kb) where the ESG rating includes KPIs covering the E factor, information on whether that rating considers the alignment of the business model and strategy of the company with the objectives of the transition to a sustainable economy and with the limiting of global warming, in line with the Paris Agreement pursuant to the latest recommendations of the IPCC and the European Scientific Advisory Board on Climate Change;

Added– (ii) an investment firm as defined in Article 4(1), point (1), of Directive 2014/65/EU the European Parliament and of the Council;

RemovedAnnex III – Part 1 – paragraph 1 – point k c (new): (kc) where the ESG rating covers the S factor, information on whether that rating considers the compliance of the rated entity with International Labour Organisation core conventions on Right to Organise and Collective Bargaining as well as compliance with relevant due diligence legislation;

Added– (iii) an alternative investment fund manager (AIFM) as defined in Article 4(1), point (b), of Directive 2011/61/EU of the European Parliament and of the Council, including a manager of a qualifying venture capital fund as defined in Article 3, point (c) of Regulation (EU) No 345/2013 of the European Parliament and of the Council, a manager of a qualifying social entrepreneurship fund as defined in Article 3, point (c) of Regulation (EU) No 346/2013 of the European Parliament and of the Council and a manager of the ELTIF as defined in Article 2, point (12) of Regulation (EU) 2015/760 of the European Parliament and of the Council;

RemovedAnnex III – Part 1 – paragraph 1 – point k d (new): (kd) where the ESG rating covers the G factor, whether the rated entity aligns with international standard on tax evasion and avoidance and whether the remuneration criteria for management align with the sustainability strategy of the entity;

Added– (iv) an undertaking for collective investment in transferable securities (UCITS) management company as defined Article 2(1), point (b), of Directive 2009/65/EC of the European Parliament and of the Council;

RemovedAnnex III – Part 1 – paragraph 1 – point k e (new): (ke) any limitation on the information available to ESG rating providers.

Added– (v) an insurance undertaking as defined in Article 13, point (1), of Directive 2009/138/EC of the European Parliament and of the Council;

RemovedAnnex III – Part 2 – paragraph 1 – introductory part: In addition to the elements referred to in Article 21 of the Regulation, ESG rating providers and, where relevant, ESG rating subscribers shall make available the following information to European regulated financial undertakings:

Added– (vi) a reinsurance undertaking as defined in Article 13, point (4), of Directive 2009/138/EC;

RemovedAnnex III – Part 2 – paragraph 1 – point a – point 2: (2) whether the analysis is backward-looking or forward-looking and the time horizon covered,

Added– (vii) an institution for occupational retirement provision as defined in Article 1, point (6) of Directive 2016/2341 of the European Parliament and of the Council;

RemovedAnnex III – Part 2 – paragraph 1 – point a – point 3: deleted

Added– (viii) pension institutions operating pension schemes which are considered to be social security schemes covered by Regulation (EC) No 883/2004 of the European Parliament and of the Council and Regulation (EC) No 987/2009 of the European Parliament and of the Council, and any legal entity set up for the purpose of investment of such social security schemes;

RemovedAnnex III – Part 2 – paragraph 1 – point a – point 4: (4) the relevant KPIs, and weighting method,

Added– (ix) an alternative investment fund (AIF) managed by an AIFM as defined in Article 4(1), point (b), of Directive 2011/61/EU or an AIF supervised under the applicable national law;

RemovedAnnex III – Part 2 – paragraph 1 – point a – point 7 a (new): (7a) where the ESG rating includes KPIs covering the E factor, the extent to which the ESG rating is correlated with the percentage of taxonomy-alignment under Regulation (EU) 2020/852, together with an explanation of any significant deviations therefrom,

Added– (x) a UCITS as defined in Article 1(2) of Directive 2009/65/EC;

RemovedAnnex III – Part 2 – paragraph 1 – point b – point 5 a (new): (5a) whether the data used has been subject to an assurance review,

Added– (xi) a central counterparty as defined in Article 2, point (1), of Regulation (EU) No 648/2012 of the European Parliament and of the Council;

RemovedAnnex III – Part 2 – paragraph 1 – point b a (new): (ba) the timing of source data collection;

Added– (xii) a central securities depository as defined in Article 2(1), point (1), of Regulation (EU) No 909/2014 of the European Parliament and of the Council;

RemovedAnnex III – Part 2 – paragraph 1 – point c: (c) information about engagement with rated entities including whether on-site reviews or inspections have been performed by the ESG rating provider and at what frequency;

Added– (xiii) an insurance or reinsurance special purpose vehicle authorised in accordance with Article 211 of Directive 2009/138/EC;

RemovedAnnex III – Part 2 – paragraph 1 – point c a (new): (ca) a statement on the limitations of the ratings, including information about engagement with the various stakeholders of a rated entity and how contradictory, incomplete or subjective information is handled;

Added– (xiv) a ‘securitisation special purpose entity’ as defined in Article 2, point (2), of Regulation (EU) No 2017/2402 of the European Parliament and of the Council;

RemovedAnnex III – Part 2 – paragraph 1 a (new): The information referred to in Part 2 of this Annex shall be specific to each ESG rating distributed.

Added– (xv) an insurance holding company as defined in Article 212(1), point (f), of Directive 2009/138/EC or a mixed financial holding company as defined in Article 212(1), point (h), of Directive 2009/138/EC, which is part of an insurance group that is subject to supervision at the level of the group pursuant to Article 213 of that Directive and which is not exempted from group supervision pursuant to Article 214(2) of that Directive;