Abstract This paper explores the extent to which current EU and Member State stock exchange listing regimes can adequately address the financial risks associated with climate change, particularly in relation to the admission of climate-exposed companies, such as fossil fuel enterprises, to public capital markets. While investor protection remains a core objective of EU capital markets regulation, existing listing and prospectus requirements often fail to ensure meaningful disclosure of climate-related risks or condition market access on adopting Paris-aligned transition strategies. Through comparative analysis of the Italian and German frameworks, the study reveals the fragmented and discretionary nature of national competent authorities’ powers, which limits their effectiveness in addressing climate-related financial risks. The paper further examines ESMA’s evolving mandate concerning ESG risks and considers its potential role within a reformed, centralised listing authority. It argues for EU-level legislative reform to establish binding, harmonised listing standards, including mandatory sustainability disclosures and credible transition planning requirements at the time of listing. Against the backdrop of the Capital Markets Union, the creation of a single EU listing authority, ideally situated within ESMA, is proposed as a key institutional reform to ensure regulatory consistency, enhance investor protection, and support the EU’s broader climate commitments.
Luca Verzobio (Thu,) studied this question.
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