Creative Commons

Due to the rapid global changes, such as Climate Change and the spread of Covid-19, the issue of sustainability has come to the forefront of interest. Public authorities and financial market participants attempt to contribute to the transition to a more sustainable society. This is a very critical issue that constitutes a priority at an international level. Each country attempts to encourage and motivate companies, institutions and investors to adopt and apply new methods. One of these methods is the adoption of ESG criteria. The term ESG refers to criteria that are linked to environmental, social and governance issues. These non-economical elements are crucially contributing not only to the company’s profitability but also to its future existence. Nowadays, the protection of the environment, human rights, and ethical values attract the interest of the public. So there is an idea under which sustainability is linked not only with the operation of a company but also with its success and profitability. It is considered that a company that has adopted ESG criteria will have high returns and will be more resilient to radical changes. The main aim of this dissertation is to introduce the ESG criteria and products, as well as the legal framework under which the issues of ESG are settled. The dissertation is organized into four chapters excluding the conclusion. In the first chapter, the history of ESG is included, as well as historical facts that were important for the genesis of the ESG term. The second chapter provides an analytical review of the ESG criteria and their products. There is a clear separation in the term E, S, and G in order to be fully understood. Then, there is a detailed reference to ESG financial products, which focuses mainly on green bonds and their framework. Additionally, in the third chapter, the advantages and disadvantages of the ESG are listed. In the fourth chapter, the legal framework that regulates ESG issues and prevents also greenwashing is mentioned. The overview of the legislation focuses on the EU level. Firstly, the Taxonomy Regulation (EU Reg. 2020/852) is referred under which the investors can understand if an economic activity is substantial or not. Then, an analysis of the Sustainable Finance Disclosure Regulation (EU Reg. 2019/2088) is made. It gives attention to the classification of financial products to grey and green. After this, the regulation (EU) 2019/2089 under which the benchmark regulation (EU) 2016/1011 (BMR) iv is amended, is also mentioned. Finally, a conclusion based on the four previous chapters is made.