What changed, Commission Delegated Regulation (EU) 2020/1818 of 17 July 2020 supplementing Regulation (EU) 2016/1011

+ ## CHAPTER I — DEFINITIONS
− ### art_1
+ ### Article 1 — Definitions
− Article 1
+ (a) ‘greenhouse gas (GHG) emissions’ means greenhouse gas emissions as defined in Article 3, point (1), of Regulation (EU) 2018/842 of the European Parliament and of the Council (1);
− | (a) | ‘greenhouse gas (GHG) emissions’ means greenhouse gas emissions as defined in Article 3, point (1), of Regulation (EU) 2018/842 of the European Parliament and of the Council (6); |
− | --- | --- |
+ (b) ‘absolute greenhouse gas (GHG) emissions’ means tonnes of CO2 equivalent, as defined in Article 2, point (7), of Regulation (EU) No 517/2014 of the European Parliament and of the Council (2);
− | (b) | ‘absolute greenhouse gas (GHG) emissions’ means tonnes of CO2 equivalent, as defined in Article 2, point (7), of Regulation (EU) No 517/2014 of the European Parliament and of the Council (7); |
− | --- | --- |
+ (c) ‘greenhouse gas (GHG) intensity’ means absolute GHG emissions divided by millions of euros in enterprise value including cash;
− | (c) | ‘greenhouse gas (GHG) intensity’ means absolute GHG emissions divided by millions of euros in enterprise value including cash; |
− | --- | --- |
+ (d) ‘enterprise value including cash’ or ‘EVIC’ means the sum, at fiscal year-end, of the market capitalisation of ordinary shares, the market capitalization of preferred shares, and the book value of total debt and non-controlling interests, without the deduction of cash or cash equivalents;
− | (d) | ‘enterprise value including cash’ or ‘EVIC’ means the sum, at fiscal year-end, of the market capitalisation of ordinary shares, the market capitalization of preferred shares, and the book value of total debt and non-controlling interests, without the deduction of cash or cash equivalents; |
− | --- | --- |
+ (e) ‘investable universe’ means the set of all investable instruments in a given asset class or group of asset classes;
− | (e) | ‘investable universe’ means the set of all investable instruments in a given asset class or group of asset classes; |
− | --- | --- |
+ (f) ‘base year’ means the first of a series of years in a benchmark.
− | (f) | ‘base year’ means the first of a series of years in a benchmark. |
− | --- | --- |
+ ## CHAPTER II — MINIMUM STANDARDS FOR THE DESIGN OF THE BENCHMARK METHODOLOGY / SECTION 1 — MINIMUM STANDARDS COMMON FOR EU CLIMATE TRANSITION BENCHMARKS AND EU PARIS-ALIGNED BENCHMARKS
− ### art_2
+ ### Article 2 — Reference temperature scenario
− Article 2
+ ### Article 3 — Equity allocation constraint
− ### art_3
− 
− Article 3
+ ### Article 4 — Calculation of GHG intensity or absolute GHG emissions
− ### art_4
+ **1.** Administrators of EU Climate Transition Benchmarks and administrators of EU Paris-aligned Benchmarks shall calculate the GHG intensity or, where applicable, the absolute GHG emissions of those benchmarks using the same currency for all of their underlying assets.
− Article 4
+ **2.** Administrators of EU Climate Transition Benchmarks and administrators of EU Paris-aligned Benchmarks shall recalculate the GHG intensity and the absolute GHG emissions of those benchmarks on a yearly basis.
− 1. Administrators of EU Climate Transition Benchmarks and administrators of EU Paris-aligned Benchmarks shall calculate the GHG intensity or, where applicable, the absolute GHG emissions of those benchmarks using the same currency for all of their underlying assets.
+ ### Article 5 — Phase-in of Scope 3 GHG emissions data in the benchmark methodology
− 2. Administrators of EU Climate Transition Benchmarks and administrators of EU Paris-aligned Benchmarks shall recalculate the GHG intensity and the absolute GHG emissions of those benchmarks on a yearly basis.
− 
− ### art_5
+ **1.** The benchmark methodology for EU Climate Transition Benchmarks or EU Paris-aligned Benchmarks shall include Scope 3 GHG emissions data in the following way:(a) As of 23 December 2020, Scope 3 GHG emissions data for at least the energy and mining sectors referred to in Divisions 05 to 09 and 1…
− Article 5
+ **2.** For the purposes of paragraph 1, point (a), from 23 December 2020 to 31 December 2021, administrators of EU Climate Transition Benchmarks and administrators of EU Paris-aligned Benchmarks may use fossil fuel reserves, where they demonstrate that they cannot calculate nor estimate Scope 3 GHG …
− 1. The benchmark methodology for EU Climate Transition Benchmarks or EU Paris-aligned Benchmarks shall include Scope 3 GHG emissions data in the following way:
+ ### Article 6 — Companies setting and publishing GHG emission reduction targets
− | (a) | As of 23 December 2020, Scope 3 GHG emissions data for at least the energy and mining sectors referred to in Divisions 05 to 09 and 19 and 20 of Annex I to Regulation (EC) No 1893/2006; |
− | --- | --- |
− 
− | (b) | within two years from 23 December 2020, Scope 3 GHG emissions data for at least the transportation, construction, buildings, materials and industrial sectors referred to in Divisions 10 to 18, 21 to 33, 41, 42 and 43, 49 to 53 and Division 81 of Annex I to Regulation (EC) No 1893/2006; |
− | --- | --- |
− | (c) | within four years from 23 December 2020, Scope 3 GHG emissions data for all other sectors referred to in Annex I to Regulation (EC) No 1893/2006. |
− | --- | --- |
− 
− 2. For the purposes of paragraph 1, point (a), from 23 December 2020 to 31 December 2021, administrators of EU Climate Transition Benchmarks and administrators of EU Paris-aligned Benchmarks may use fossil fuel reserves, where they demonstrate that they cannot calculate nor estimate Scope 3 GHG emis…
− 
− ### art_6
− 
− Article 6
− 
+ (a) the issuers of the constituent securities publish consistently and accurately their Scope 1, 2 and 3 GHG emissions;
− | (a) | the issuers of the constituent securities publish consistently and accurately their Scope 1, 2 and 3 GHG emissions; |
− | --- | --- |
+ (b) the issuers of the constituent securities have reduced their GHG intensity or, where applicable, their absolute GHG emissions, including Scope 1, 2 and 3 GHG emissions, by an average of at least 7 % per annum for at least three consecutive years.
− | (b) | the issuers of the constituent securities have reduced their GHG intensity or, where applicable, their absolute GHG emissions, including Scope 1, 2 and 3 GHG emissions, by an average of at least 7 % per annum for at least three consecutive years. |
− | --- | --- |
+ ### Article 7 — Setting a decarbonisation trajectory
− ### art_7
+ **1.** The decarbonisation trajectory for EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks shall have the following targets:(a) for equity securities admitted to a public market in the Union or in another jurisdiction, at least 7 % reduction of GHG intensity on average per annum;(b) …
− Article 7
+ **2.** The targets referred to in paragraph 1 shall be calculated geometrically, which shall mean that the annual minimum 7 % reduction of GHG intensity or of absolute GHG emissions for year ‘n’ shall be calculated based on the GHG intensity or absolute GHG emissions for the year n-1, in a geometric…
− 1. The decarbonisation trajectory for EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks shall have the following targets:
+ **3.** Where the average EVIC of the constituent securities of the benchmark has increased or decreased during the last calendar year, the EVIC of each constituent shall be adjusted by dividing it by an enterprise value inflation adjustment factor. That enterprise value inflation adjustment factor s…
− | (a) | for equity securities admitted to a public market in the Union or in another jurisdiction, at least 7 % reduction of GHG intensity on average per annum; |
− | --- | --- |
+ **4.** Administrators of EU Climate Transition Benchmarks and administrators of EU Paris-aligned Benchmarks shall, for each year in which the targets laid down in paragraph 1 are not achieved, compensate for those missed targets by upwardly adjusting the targets in their decarbonisation trajectory f…
− | (b) | for debt securities other than those issued by a sovereign issuer, where the issuer of those debt securities has equity securities admitted to a public market in the Union or in another jurisdiction, at least 7 % reduction of GHG intensity on average per annum or at least 7 % reduction of ab…
− | --- | --- |
+ **5.** Administrators of EU Climate Transition Benchmarks and administrators of EU Paris-aligned Benchmarks shall no longer be able to label their benchmarks as such where:(a) the targets laid down in paragraph 1 are not achieved in a given year and the target miss is not compensated in the followin…
− | (c) | for debt securities other than those issued by a sovereign issuer, where the issuer of those debt securities does not have equity securities admitted to a public market in the Union or in another jurisdiction, at least 7 % reduction of absolute GHG emissions on average per annum. |
− | --- | --- |
− 
− 2. The targets referred to in paragraph 1 shall be calculated geometrically, which shall mean that the annual minimum 7 % reduction of GHG intensity or of absolute GHG emissions for year ‘n’ shall be calculated based on the GHG intensity or absolute GHG emissions for the year n-1, in a geometric pro…
− 
− 3. Where the average EVIC of the constituent securities of the benchmark has increased or decreased during the last calendar year, the EVIC of each constituent shall be adjusted by dividing it by an enterprise value inflation adjustment factor. That enterprise value inflation adjustment factor shall…
− 
− 4. Administrators of EU Climate Transition Benchmarks and administrators of EU Paris-aligned Benchmarks shall, for each year in which the targets laid down in paragraph 1 are not achieved, compensate for those missed targets by upwardly adjusting the targets in their decarbonisation trajectory for t…
− 
− 5. Administrators of EU Climate Transition Benchmarks and administrators of EU Paris-aligned Benchmarks shall no longer be able to label their benchmarks as such where:
− 
− | (a) | the targets laid down in paragraph 1 are not achieved in a given year and the target miss is not compensated in the following year; or |
− | --- | --- |
− | (b) | the targets laid down in paragraph 1 are not achieved on three occasions in any consecutive 10-year period. |
− | --- | --- |
− 
+ ### Article 8 — Change in GHG intensity and absolute GHG emissions
− ### art_8
+ **1.** The change in GHG intensity or absolute GHG emissions shall be calculated as the percentage change between, on the one hand, the weighted average GHG intensity or absolute GHG emissions of all constituents of the EU Climate Transition Benchmark or the EU Paris-aligned Benchmark at the end of …
− Article 8
+ **2.** Benchmark administrators shall use a new base year whenever significant changes in the calculation methodology of GHG intensity or absolute GHG emissions occur.
− 1. The change in GHG intensity or absolute GHG emissions shall be calculated as the percentage change between, on the one hand, the weighted average GHG intensity or absolute GHG emissions of all constituents of the EU Climate Transition Benchmark or the EU Paris-aligned Benchmark at the end of year…
− 
− 2. Benchmark administrators shall use a new base year whenever significant changes in the calculation methodology of GHG intensity or absolute GHG emissions occur.
+ ## CHAPTER II — MINIMUM STANDARDS FOR THE DESIGN OF THE BENCHMARK METHODOLOGY / SECTION 2 — MINIMUM STANDARDS FOR EU CLIMATE TRANSITION BENCHMARKS
− ### art_9
+ ### Article 9 — Baseline reduction of GHG intensity or absolute GHG emissions for EU Climate Transition Benchmarks
− Article 9
+ ### Article 10 — Exclusions for EU Climate Transition Benchmarks
− ### art_10
+ **1.** Administrators of EU Climate Transition Benchmarks shall disclose in their methodology whether and how they exclude companies.
− Article 10
+ **2.** By 31 December 2022, administrators of EU Climate Transition Benchmarks shall comply with the requirements set out in Article 12(1), points (a), (b) and (c), and Article 12(2).
− 1. Administrators of EU Climate Transition Benchmarks shall disclose in their methodology whether and how they exclude companies.
+ ## CHAPTER II — MINIMUM STANDARDS FOR THE DESIGN OF THE BENCHMARK METHODOLOGY / SECTION 3 — MINIMUM STANDARDS FOR EU PARIS-ALIGNED BENCHMARKS
− 2. By 31 December 2022, administrators of EU Climate Transition Benchmarks shall comply with the requirements set out in Article 12(1), points (a), (b) and (c), and Article 12(2).
+ ### Article 11 — Baseline reduction of GHG intensity or absolute GHG emissions for EU Paris-aligned Benchmarks
− ### art_11
− 
− Article 11
+ ### Article 12 — Exclusions for EU Paris-aligned Benchmarks
− ### art_12
+ **1.** Administrators of EU Paris-aligned Benchmarks shall exclude all of the following companies from those benchmarks:▼M1(a) companies involved in any activities related to prohibited weapons;▼B(b) companies involved in the cultivation and production of tobacco;(c) companies that benchmark adminis…
− Article 12
+ For the purposes of point (a), prohibited weapons shall mean anti-personnel mines, cluster munitions, biological and chemical weapons the use, possession, development, transfer, manufacture, and stockpiling of which is expressly prohibited by the international arms conventions to which the majority …
− 1. Administrators of EU Paris-aligned Benchmarks shall exclude all of the following companies from those benchmarks:
+ **2.** Administrators of EU Paris-aligned Benchmarks shall exclude from those benchmarks any companies that are found or estimated by them or by external data providers to significantly harm one or more of the environmental objectives referred to in Article 9 of Regulation (EU) 2020/852 of the Europ…
− | (a) | companies involved in any activities related to controversial weapons; |
− | --- | --- |
− 
− | (b) | companies involved in the cultivation and production of tobacco; |
− | --- | --- |
+ **3.** Administrators of EU Paris-aligned Benchmarks shall disclose in their benchmark methodology any additional exclusion criteria they use and which are based on climate-related or other environmental, social and governance (ESG) factors.
− | (c) | companies that benchmark administrators find in violation of the United Nations Global Compact (UNGC) principles or the Organisation for Economic Cooperation and Development (OECD) Guidelines for Multinational Enterprises; |
− | --- | --- |
+ ## CHAPTER III — TRANSPARENCY AND ACCURACY
− | (d) | companies that derive 1 % or more of their revenues from exploration, mining, extraction, distribution or refining of hard coal and lignite; |
− | --- | --- |
+ ### Article 13 — Transparency requirements for estimations
− | (e) | companies that derive 10 % or more of their revenues from the exploration, extraction, distribution or refining of oil fuels; |
− | --- | --- |
+ **1.** In addition to the requirements laid down in Annex III to Regulation (EU) 2016/1011, administrators of EU Climate Transition Benchmarks and administrators of EU Paris-aligned Benchmarks shall comply with the following requirements:(a) administrators of EU Climate Transition Benchmarks and adm…
− | (f) | companies that derive 50 % or more of their revenues from the exploration, extraction, manufacturing or distribution of gaseous fuels; |
− | --- | --- |
+ **2.** For the purposes of Article 12(2), administrators of EU Paris-aligned Benchmarks shall comply with the following requirements:(a) administrators of EU Paris-aligned Benchmarks that use estimations that are not based on data provided by an external data provider shall formalise, document and m…
− | (g) | companies that derive 50 % or more of their revenues from electricity generation with a GHG intensity of more than 100 g CO2 e/kWh. |
− | --- | --- |
+ ### Article 14 — Disclosure of the decarbonisation trajectory
− For the purposes of point (a), controversial weapons shall mean controversial weapons as referred to in international treaties and conventions, United Nations principles and, where applicable, national legislation.
− 
− 2. Administrators of EU Paris-aligned Benchmarks shall exclude from those benchmarks any companies that are found or estimated by them or by external data providers to significantly harm one or more of the environmental objectives referred to in Article 9 of Regulation (EU) 2020/852 of the European …
− 
− 3. Administrators of EU Paris-aligned Benchmarks shall disclose in their benchmark methodology any additional exclusion criteria they use and which are based on climate-related or other environmental, social and governance (ESG) factors.
− 
− ### art_13
− Article 13
− 
− 1. In addition to the requirements laid down in Annex III to Regulation (EU) 2016/1011, administrators of EU Climate Transition Benchmarks and administrators of EU Paris-aligned Benchmarks shall comply with the following requirements:
− 
− | (a) | administrators of EU Climate Transition Benchmarks and administrators of EU Paris-aligned Benchmarks that use estimations that are not based on data provided by an external data provider, shall formalise, document and make public the methodology upon which such estimations are based, includi…
− | --- | --- |
− | (i) | the approach that they have used to calculate GHG emissions, and the main assumptions and the precautionary principles underlying those estimations; |
− | (ii) | the research methodology to estimate missing, unreported, or underreported GHG emissions; |
− | (iii) | the external data sets used in the estimation of missing, unreported or underreported GHG emissions; |
− 
− | (b) | administrators of EU Climate Transition Benchmarks and administrators of EU Paris-aligned Benchmarks that use estimations that are based on data provided by an external data provider shall formalise, document and make public all of the following information:(i)the name and contact details of…
− | --- | --- |
− | (i) | the name and contact details of the data provider; |
− | (ii) | the methodology used and the main assumptions and precautionary principles, where available; |
− | (iii) | a hyperlink to the website of the data provider, and to the relevant methodology used, where available. |
− 
− 2. For the purposes of Article 12(2), administrators of EU Paris-aligned Benchmarks shall comply with the following requirements:
− 
− | (a) | administrators of EU Paris-aligned Benchmarks that use estimations that are not based on data provided by an external data provider shall formalise, document and make public the methodology upon which such estimations are based, including:(i)the approach and research methodology that they ha…
− | --- | --- |
− | (i) | the approach and research methodology that they have used, and the main assumptions and precautionary principles underlying those estimations; |
− | (ii) | the external data sets used in the estimation; |
− 
− | (b) | administrators of EU Paris-aligned Benchmarks that use estimations that are based on data provided by an external data provider shall formalise, document and make public all of the following information:(i)the name and contact details of the data provider;(ii)the methodology used and the mai…
− | --- | --- |
− | (i) | the name and contact details of the data provider; |
− | (ii) | the methodology used and the main assumptions and precautionary principles, where available; |
− | (iii) | a hyperlink to the website of the data provider, and to the relevant methodology used, where available. |
− 
− ### art_14
− 
− Article 14
− 
+ ### Article 15 — Accuracy of the data sources
− ### art_15
+ **1.** Administrators of EU Climate Transition Benchmarks and administrators of EU Paris-aligned Benchmarks shall ensure that data on Scope 1, 2 and 3 GHG emissions are accurate, in accordance with global or European standards, such as the Product Environmental Footprint (PEF), the Organisation Envi…
− Article 15
− 
− 1. Administrators of EU Climate Transition Benchmarks and administrators of EU Paris-aligned Benchmarks shall ensure that data on Scope 1, 2 and 3 GHG emissions are accurate, in accordance with global or European standards, such as the Product Environmental Footprint (PEF), the Organisation Environm…
+ **2.** For the purposes of paragraph 1, administrators of EU Climate Transition Benchmarks and administrators of EU Paris-aligned Benchmarks shall disclose in their methodology the standard used.
− 2. For the purposes of paragraph 1, administrators of EU Climate Transition Benchmarks and administrators of EU Paris-aligned Benchmarks shall disclose in their methodology the standard used.
+ **3.** Administrators of EU Climate Transition Benchmarks and administrators of EU Paris-aligned Benchmarks shall ensure the comparability and quality of GHG emissions data.
− 3. Administrators of EU Climate Transition Benchmarks and administrators of EU Paris-aligned Benchmarks shall ensure the comparability and quality of GHG emissions data.
+ ## CHAPTER IV — FINAL PROVISIONS
− ### art_16
+ ### Article 16 — Entry into force and application
− Article 16
+ This Regulation shall enter into force on the twentieth day following that of its publication in the *Official Journal of the European Union*.
− This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.