The three European Supervisory Authorities (ESAs) – the European Insurance and Occupational Pensions Authority (EIOPA), the European Securities and Markets Authority (ESMA), and the European Banking Authority (EBA) – have published a consultation paper with amendments to the Delegated Regulation of the Sustainable Finance Disclosure Regulation (SFDR).
They are proposing changes to the disclosure framework to address issues that have emerged since the introduction of the regulation. Participants have until 4 July 2023 to provide feedback.
The recommendations include extending the list of universal social indicators for the disclosure of the principal adverse impacts of investment decisions on the environment and society as well as earnings from non-cooperative tax jurisdictions to interference in the formation of trade unions.
They also advise refining the content of other indicators for adverse impacts and their respective definitions, applicable methodologies and formulae for calculation.
This category also covers the presentation of the share of information derived directly from investee companies, sovereigns, supranationals or real estate assets.
Last but not least on the list is having product disclosures added regarding decarbonisation targets, including intermediate targets, the level of ambition and how the target will be achieved.
In addition, the authorities propose further technical revisions to the SFDR Delegated Regulation by improving the disclosures on how sustainable investments “do not significantly harm” the environment and society.
They also want to simplify pre-contractual and periodic disclosure templates for financial products and make other technical adjustments concerning involving the treatment of derivatives, the definition of equivalent information, and provisions for financial products with underlying investment options.
The Joint Committee of the ESAs received a mandate from the European Commission on 28 April 2022 to review and revise the Regulatory Technical Standards laid down in the SFDR Delegated Regulation.
The ESAs aim to deliver a final report under the mandate by the end of October 2023.
©Markets Media Europe 2023
