Delegated Regulation on the inclusion of ESG factors in the benchmark statement 2020/1816

Commission Delegated Regulation (EU) 2020/1816 of 17 July 2020 supplementing Regulation (EU) 2016/1011 of the European Parliament and of the Council as regards the explanation in the benchmark statement regarding how environmental, social and governance factors are reflected in the individual benchmarks provided and published (Text with EEA relevance).

This regulation enters into force on the twentieth day after its publication in the Official Journal of the European Union.

Publication date

3. 12. 2020

This regulation complements Regulation (EU) 2016/1011 of the European Parliament and of the Council and further details explains how environmental, social and governance (ESG) factors are reflected in the reference values.

The regulation was adopted with a purpose to improve the transparency and comparability of benchmarks and provide investors with clearer information on how ESG factors affect their investments.

Main points of the regulation:

• Benchmark managers must in the benchmark statement explain how ESG factors are reflected in each benchmark or set of benchmarks they provide and publish. This explanation should include assessment of ESG factors a aggregate weighted average value.
• Regulation does not apply to interest rates and foreign exchange reference values.
• Benchmark administrators must update the provided information on ESG factors whenever there are significant changes and at least once a year. They must too state the reasons for the update.
• Annex I to the regulation sets out the template to be used to explain ESG factors in the benchmark statement.
• Annex II lists ESG factors to consider depending on the underlying assets of the benchmark.

The Regulation entered into force 20 days after its publication in the Official Journal of the European Union.