In a context of high uncertainty, facing new challenges and after a period of unprecedented health crisis that had marked previous years, AMF’s newly published action and supervisory priorities for 2023 will focus primarily on four areas: promoting finance that meets the new expectations of investors, take up of European and international challenges, developing the regulatory framework for sustainable finance and combating greenwashing and ensuring a robust and efficient supervision.
This renewed position reflects the direction the AMF has been moving towards, as we saw in December 2022 the AMF renewed its consultative commissions and the Climate and Sustainable Finance Commission. This consistency in priorities reflect the growth of EU-level supervisory work, strengthened by this strategic plan covering the next five years.
Similarly, for the last three years, the AMF and ACPR have issued a joint annual report focusing on the commitments of French financial institutions to combating climate change and achieving carbon neutrality by 2050. In their latest report, the AMF and ACPR continue their assessment by providing an overview of banks and insurers’ commitments using the inventory compiled by the Sustainable Finance Observatory. The AMF and ACPR supplement this overview by a review of the governance of all market players’ commitments. As with previous editions, the report examines the fossil fuel policies of the main financial institutions, and provided new estimates of their exposure. It also assesses the implementation of recommendations that the AMF and ACPR made in previous reports, and makes a number of new recommendations.
The report states that further progress is still needed:
- While the successive reports confirm a strong mobilisation of financial sector participants, with advances noted over the first two years, especially regarding exit dates and exclusion criteria, approaches nonetheless remain heterogeneous.
- Overall, institutions haven’t sufficiently addressed the recommendations made in previous reports.
- Moreover, the operational implementation of institutions’ commitments remains insufficient.
- The changes in the European regulatory framework and strengthening of requirements for non-financial reporting are liable to lead to changes in the format and scope of the AMF and ACPR’s next joint reports. In light of this, the current report is also an appeal to financial institutions to quickly close the gap between the level of transparency currently observed on their voluntary commitments and the current and forthcoming regulatory requirements.
Further steps should be taken by financial institutions in order to be fully compliant with the regulatory framework and to avoid the risk of greenwashing, as greenwashing practices have become a supervision priority for both EU and French authorities. Furthermore, and in light the growing complexity of the sustainable finance requirements, additional guidance on the regulators’ expectations is welcomed to achieve both compliance with the regulatory framework and carbon neutrality by 2050.