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ESG tops financial regulatory requirements as UK, EU rules differ



© Reuters. FILE PHOTO: An overview image of the Canary Wharf financial district in London, England, September 30, 2022. REUTERS/Maja Smiejkowska

LONDON (Reuters) – Financial firms in the UK and the European Union have remained under significant pressure to comply with various environmental, social and governance (ESG) rules over the past six months, according to Feng. KPMG’s regulatory chart showed Monday.

The barometer, intended to help companies plan for compliance, also tracks the scale of differences between UK and EU regulations, with KPMG saying the biggest differences are in areas such as insurance. customer protection and market access.

“As the UK moves forward with new post-Brexit approaches and regulators review their new competitive targets, companies will likely need to adapt to a range of requirements. increasingly different in the UK than in Europe,” said Kate Dawson, the center’s director of regulatory expertise at KPMG.

“The volume of emerging requirements for ESG and Sustainable Finance could lead to further disparity despite the best efforts of global standard setters,” she said.

The first update to KPMG’s biannual measure of upcoming regulatory requirements for financing rose slightly to 7, on a scale of 1 to 10, from 6.9 when it launched in October. last year, because of the sustainability disclosure requirements and related rules on data, ratings, product labels and carbon markets implemented or proposed in the EU and UK.

Tougher resiliency requirements came in second as regulators applied lessons from the COVID-19 crisis, cyberattacks, glitches by outside tech vendors and the impact of Russia’s invasion of Ukraine on energy markets.

Britain rolled out a new “consumption obligation” in July, a turning point that strengthens protections for financial products.

The Edinburgh Reform, which reopens 43 sets of rules inherited from the EU to help the City of London remain globally competitive after Brexit, creates significant potential for further differentiation, KPMG said. .

Conforming to EU rules will be a prerequisite for Britain if it wants to regain access to the bloc’s financial markets. Britain said it wanted to adjust some rules inherited from the EU to better suit the UK market, while maintaining high international standards.

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