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Sustainable finance and retail investor protection key factors in ESMA’s new five-year strategy

ESMA strategy diagram
Photo: ESMA

Martina Lindberg

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The European Securities and Markets Authority has published a work strategy for the 2023–2028 period.

ESMA, the EU’s financial markets regulator and supervisor, has published a new strategy document, setting out its long-term priorities. The strategy states that ESMA aims to address the most significant risks that are linked to the financial markets in the EU, and is structured around these key areas:

  • effective financial markets and financial stability;
  • supervision and supervisory convergence;
  • retail investor protection;
  • sustainable finance; and
  • technological innovation and increased use of data.

This strategy will also be accompanied by a corporate rebranding in early 2023, with the aim to modernising ESMA’s visual identity.

Verena Ross, Chair, said: “The ESMA Strategy takes into account the rapidly changing market and geopolitical developments. The established strategic goals are important to enable ESMA, the EU’s financial markets regulator and supervisor, to continue to achieve its mission to enhance investor protection, and promote orderly and stable financial markets.”

Sustainable green economy

As part of the drive to enable a sustainable finance system, ESMA will involve sustainability in all activities and support the transition to a greener economy and financial system. To meet the United Nations’ sustainable development goals by 2030, sustainable investment products are needed.

The new strategy goals go hand in hand with the earlier priorities from ESMA’s Sustainable Finance Roadmap, with similar paths on effectiveness and integrity of ESG information, an upgraded ESG regulatory framework and supervision, and a recognition of the role of retail investors in financing the transition to a greener economy.

Another key factor of the strategy is the enhancing the protection of retail investors. ESMA and the national competent authorities’ (NCAs) have stated that they will do everything they can to ensure that investors are effectively protected, especially retail investors.

“The 2023-2028 ESMA Strategy is centred around three priorities and two thematic drivers. Fostering effectiveness and stability of the EU markets and enhancing the protection of retail investors, and doing both through strengthened supervision, are at the core of what ESMA is all about. The key twin drivers of sustainability and technological and data innovation are also now embedded across all areas of the organisation,” said Ross.

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