Legal & Regulatory News

ESAs consultation paper on changes to SFDR RTS

On 12 April 2023, the European Supervisory Authorities (ESAs) published a joint consultation paper (the Consultation) seeking feedback on significant changes to the Sustainable Finance Disclosure Regulation (SFDR) regulatory technical standards.

The ESAs are seeking feedback on the following proposed amendments:

• extending the list of universal social indicators for the disclosure of the principal adverse impacts of investment decisions on the environment and society, such as earnings from non-cooperative tax jurisdictions or interference in the formation of trade unions;
• refining the content of other indicators for adverse impacts and their respective definitions, applicable methodologies, formulae for calculation as well as the presentation of the share of information derived directly from investee companies, sovereigns, supranationals or real estate assets; and
• adding product disclosures regarding decarbonisation targets, including intermediate targets, the level of ambition and how the target will be achieved.

In addition, the ESAs are proposing further technical revisions to the SFDR Delegated Regulation in respect of:

• disclosures on how sustainable investments “do not significantly harm” the environment and society;
• pre-contractual and periodic disclosure templates for financial products; and
• technical adjustments concerning, among others, the treatment of derivatives, the definition of equivalent information, and provisions for financial products with underlying investment options.

The LMA is reviewing the Consultation and would welcome feedback from members on any points which they would like to be raised in response to the Consultation.  The closing date for responses to the Consultation is 4 July 2023.  We would therefore be grateful if you could ensure that all comments are sent to us by Friday 9^th June in order to allow us time to finalise our response.

Click here to view the Consultation.