NFU welcomes the possibility to provide feedback to this consultation, and generally, the discussions surrounding sustainable finance and integration of ESG considerations.
In connection to the requirements set out in the regulation, an area that could receive more attention could be scenario analysis in the context of ESG risks.
Furthermore, when it comes to the qualitative assessment of environmental, social and governance risks, it is noteworthy that the table on Qualitative information on Environmental Risk is significantly more developed than the tables concerning qualitative information on Social Risk and Governance Risk, which are largely reduced to headlines only. This could be due to work on these aspects being less developed in general, compared to the climate and environmental considerations. Nonetheless, that also means that they are the least comprehensive to stakeholders. Hence, more detailing and increased coherence on social and governance considerations across the different legislative initiatives addressing same/similar concepts is imperative moving forward.

We understand the intentions with the EBA´s approach in considering the various legislative files in its mandate and their interplay. In addition to the points raised in Question 2, some additional considerations to include relate to the following:
- Further coherence with the NFRD – as the proposal for the new Sustainable Corporate Reporting Directive was announced in late April 2021, followed by an empowerment to EFRAG to develop standards concerning sustainability reporting, it would be relevant for the EBA to consider these developments and reflect them in this work, also because of the data needs.
- Progress with social and governance considerations – in the consultation text, the EBA rightfully notices that the further expansion of the Taxonomy is still to take place, for the inclusion of social (and possibly governance) objectives. The narrative on these developments has changed from ´if´ to ´when´, with a first report coming out at the end of 2021. Thus, it is positive to see that the EBA will later focus on quantitative ESG disclosures, in addition to the currently proposed qualitative ones, following those developments. However, the EBA should also at that time review the currently proposed qualitative ESG disclosures. This would allow for a better alignment between the social (and potentially governance) objectives that will be prescribed with the Taxonomy Regulation – just as it has been done with the environmental disclosures in the templates and the climate/environmental goals currently in the Taxonomy Regulation.
- Data needs and competence – the data to be disclosed, with the prescribed formats, will be substantial – when it is available. This is an important consideration as high amounts of data with various quality do not always mean better understanding. The possibility to find better coherence with other legislative files requiring same/similar data will be imperative to achieve the needed effect. At the same time, it is noteworthy to mention the substantial competence needs in the field of sustainable finance – for all actors, including finance sector employees. As highlighted in the Summary Report from the stakeholder consultation on the Renewed Sustainable Finance Strategy, the learning curve will be ongoing and due attention needs to be given to that in relation to the implementation timelines.
- Remuneration - As we highlighted in our response to the EBA discussion paper on the topic, it is not only remuneration policies and variable pay that can create risk incentives, as implied. Corporate culture, non-monetary merit rating systems, aggressive sales targets and more can be significant pressure points that should be considered as well.
- Timeline – The sequenced approach that the EBA has taken is positive, also considering the different stage of development with the various files. However, almost all files have so far faced a delay, which is worthwhile to consider when planning the implementation.

Firstly, we would encourage that the point in row 15: Data availability, quality and accuracy, and efforts to improve data status, included in the table on Qualitative Environmental Risk, should also be included in the Social and Governance tables, as it is vital to all three considerations.
Furthermore, the Qualitative Social Risk table should also include the International Bill of Rights (in rows 2 and 8) for better coherence. In row 4, the concerns on salient human rights issues and supply chain due diligence could be included, as well. Particularly concerning employees, social dialogue and collective bargaining would be important features to include.
Under Qualitative Governance Risk, row 4 could be extended to include prevention, in addition to avoiding, managing or mitigating conflicts of interest. Row 5 could reflect on both internal and external safe whistleblowing channels, as an important component of democracy at work.

Concerning the Scope 3 emissions, while they are very important for the sustainability agenda, as rightfully mentioned data in this field is quite difficult to obtain. Analysis in the Nordic countries also confirms these observations (Nordic Council of Ministers: Assessment and reporting of environment and climate-related risks and impacts on financial markets: A Nordic Pre study available here). In the Joint Consultation on Taxonomy-related Sustainability Disclosures, we have noted that the proposal is from January 2023.

In this context, it could be useful to take into account the recommendations from the Platform on Sustainable Finance about the dynamic of change expected to take place in sectors.

In a related context, it could be useful to consider the differences to climate change mitigation and climate change adaptation themselves. One reason for this could be the proposed Climate Delegated Act (Taxonomy Regulation), where only enabling activities, from an adaptation perspective, can for now count their turnover. This difference in treatment can affect both the reporting and disclosure in the future.

Since this segment is specific to climate change mitigation, perhaps it could be useful to include the type of activity (own, enabling or transitional) that is considered, for the section related to the Taxonomy.

The need for forward-looking assessments, including a recommendation from the TCFD on using scenario analysis could be taken into account here, given also the forward-looking nature of sustainable finance in general.