SFDR Update – August 2022

August 8, 2022

During the month of July 2022, two interesting publications regarding the Sustainable Finance Disclosure Regulation (SFDR) were made: 1) publication of the SFDR regulatory technical standards in the Official Journal; and 2) publication of a report from the European Supervisory Authorities (ESAs) regarding principal adverse impact statement (PAI). The following article will give a short summary of both publications.

SFDR regulatory technical standards published in the Official Journal


On 25 July 2022, the regulatory technical standards (RTS) under the SFDR were published in the Official Journal as Commission Delegated Regulation (EU) 2022/1288.


The RTS includes details regarding certain disclosures under the SFDR, including for example templates for pre-contractual and annual reporting disclosures for article 8 and 9 funds as well as template for principle adverse impact statement.


This is a long-awaited publication confirming that the RTS will enter into force 1 January 2023 as expected. We recommend that asset managers (and other financial market participants) ensure that their disclosures are updated in accordance with the RTS no later than 1 January 2023.  This notably relates to website disclosures.

 

Report from the ESAs regarding PAI disclosures


On 28 July 2022, the ESAs issued a report regarding principle adverse impact disclosures (PAI). The report was based on surveys conducted by National Competent Authorities.


Disclosures on PAI are mandatory for certain larger asset managers (and other large financial market participants) and voluntary to comply with for other asset managers that does not reach certain thresholds. The purpose of the PAI disclosures in terms of asset managers is to show investors the impact that the relevant portfolio companies have on the environment and other ESG indicators.


The main findings of the report are as follows:


  • the PAI disclosures of the financial market participants that were included in the survey were not very detailed; and
  • there was a low level of compliance with the details required for financial market participants to explain why they opted not to take PAI into account.


In addition, the report includes a few examples of best practices relating to PAI disclosures.


We recommend that asset managers (and other financial market participants) take the findings in the report into account when updating their website disclosures in accordance with the RTS as stated above.


Contacts:

 

Anna Berntson Petas: anna.berntson@permian.se


Kristina Ekkeren: kristina.ekkeren@permian.no


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