HLEG Recommendations and the bilateral trade agreement - what are the implications?

Last week, the EU announced that it is going to immediately proceed with new regulations that will impact a broad range of financial services. The new regulations will be based on the recommendations made recently by the High Level Expert Group on Sustainable Finance.

The Australian Government and the EU jointly announced last week they are going to fast track a bilateral trade agreement. This will open up new opportunities to the Australian financial services industry – but also potentially make them subject to EU regulations. See below for more on these two important announcements.

EU Announces Plans to Implement HLEG Recommendations

24 May 2018.

Vice-President of the EU Commission Valdis Dombrovskis

Vice-President of the EU Commission Valdis Dombrovskis

Valdis Dombrovskis, Vice-President responsible for Financial Stability, Financial Services and Capital Markets Union said: "We should put our money into projects that are compatible with our decarbonisation objectives and the fight against climate change. This is important for the environment and the economy, but also for financial stability. Between 2007 and 2016, economic losses from extreme weather disasters rose by 86%. The proposals presented today show that the European Union is committed to ensuring that our investments go in the right direction. They are about harnessing the vast power of capital markets in the fight against climate change and promoting sustainability."

The proposed Regulation will introduce consistency and clarity on how institutional investors, such as asset managers, insurance companies, pension funds, or investment advisors should integrate environmental, social and governance (ESG) factors in their investment decision-making process. Exact requirements will be further specified through Delegated Acts, which will be adopted by the Commission at a later stage.

But the council has added a warning that it wants to make sure the deal doesn’t compromise its high standards of social and environmental protection, or hurt small and medium sized business. Read More

EU-Australia Free Trade Negotiations Start - Sydney Morning Herald

22 May 2018

EU Trade Commissioner Cecilia Malmstrom. Photo: AP

EU Trade Commissioner Cecilia Malmstrom. Photo: AP

European officials will land in Australia next month to begin negotiations on a free trade deal, after the EU’s governing council gave its long-awaited official authorisation on Tuesday  to begin negotiations for trade deal with Australia.

“The council also approved negotiation of a similar deal with New Zealand. They expect the agreement to increase EU exports to New Zealand and Australia by about a third in the long term, through removing customs duties and other barriers. EU Trade Commissioner Cecilia Malmstrom said the deal would “safeguard high standards in key areas such as sustainable development”. Read more