2. Authorisation

Contributed by: Markus Fellner, Elisabeth Fischer-Schwarz, Veronika Seronova and Mario Burger, Fellner Wratzfeld & Partners

•Under Regulation (EU) No 573/2013 (Capital

Requirements Regulation (CRR)), large institutions that have issued securities admitted to trading on a regulated market of an EU member state are required to disclose information on sustainability risks from mid-2022.

In addition, far-reaching requirements for the inclusion of sustainability risks in the risk management and supervision of institutions have already come into force. •Regulation (EU) 2019/2088 (Disclosure Regulation) obliges financial market participants to disclose, on the one hand, their concepts for integrating sustainability risks into their investment decision-making process and, on the other hand, the adverse effects of investment decisions on certain sustainability factors. These extended information and transparency obligations thus also provide for an expansion of sustainability-related accounting. Some of the requirements have already been implemented from March 2021. •Regulation (EU) 2016/1011 (Benchmark

Regulation) ensures better information on the

“carbon footprint” of an investment portfolio.

In addition to developing minimum standards for low-carbon investments, two new categories of benchmarks have been introduced.

Some of the requirements have already been applicable since April 2020. •Regulation (EU) 2020/852 (Taxonomy Regulation), which was adopted in April 2020, undoubtedly forms the “core” of the EU’s

Sustainable Financing Action Plan and further expands on and defines the concept of “sustainability”. In order to be considered sustainable in terms identified by the Taxonomy

Regulation, a company must achieve at least one and not “substantially harm” any of the following environmental objectives: (a) climate change mitigation; (b) adaptation to climate change; (c) sustainable use and protection of water and marine resources; (d) transition to a circular economy waste prevention and recycling; (e) pollution prevention and control; and (f) protection of healthy ecosystems as environmental objectives.

With regard to disclosure obligations in Austria, the Sustainability and Diversity Improvement Act is of particular relevance. It obliges large companies, which are those of public interest and with more than 500 employees, to report on environmental, social and labour issues in the management report or in a separate report. Measures designed to respect human rights and fight corruption and bribery (ie, the ESG factors) should be included. It is also necessary to outline the concepts pursued and to indicate the results, risks and most important non-financial indicators.

This would appear to cover only a very small number of companies. However, many smaller companies will also be affected by the “leveldown” effect – according to which a company can only fulfil its disclosure obligations itself if it can rely on corresponding reliable information from its suppliers.

2.1 Authorisation to Provide Financing to a Company

Banks are authorised to provide loan financing on a commercial basis to companies domiciled in Austria via the following three basic routes:

•application for an Austrian banking licence, which is certainly not viable for one-off transactions and typically involves meticulous,