On Wednesday 6 April, the European Commission unveiled technical standards to be used by financial market participants when disclosing sustainability-related information under the Sustainable Finance Disclosures Regulation (SFDR).
The proposal for a delegated regulation specifies the exact content, methodology and presentation of the information to be published, in order to “improve its quality and comparability”, the Commission explained in a statement. This will allow financial market players to provide detailed information on how they address and reduce the potential negative impacts their investments may have on the environment and society in general.
These new requirements will help to assess the performance of financial products in terms of sustainability. This will “help strengthen investor protection and reduce greenwashing” and “support the transition of the financial system to a more sustainable economy”, according to the Commission. The aim is also to harmonise and make consistent the various sectoral legislations concerned (the ‘AIFM’, ‘UCITS’, ‘Solvency II’, ‘IDD’ and ‘MiFID II’ directives).
According to Mairead McGuinness, European Commissioner for Financial Services, “financial institutions subject to these transparency rules will have to screen their investment portfolios and report their performance accordingly. This means more transparency in the market, giving investors better information to make investment decisions in line with their sustainability preferences.”
The rules adopted on Wednesday will be sent to the European Parliament and the EU Council, which have three months to examine the act. The rules are scheduled to apply from 1 January 2023.
To read the regulation: https://aeur.eu/f/14z (Original version in French by Anne Damiani)