Text updated on 30.11.2021
Regulation (EU) 2019/2088 on sustainability‐related disclosures in the financial services sector (“the Disclosure Regulation” or “SFDR”)[1] sets out harmonised rules for financial market participants and financial advisers with regard to disclosure about the integration of sustainability risks and consideration of adverse sustainability impacts in their processes and in providing information about the sustainability of financial products.
The European Supervisory Authorities (ESAs) have finalised drafts for Regulatory Technical Standards (RTS) for defining provisions in Regulation (EU) 2019/2088 in greater details and has submitted them to the European Commission.[2]
Due to the complexity as well as the level of technical detail of the RTS, parts of the drafts have been delayed. John Berrigan, Director General of the DG for Financial Stability, Financial Services and Capital Markets Union, which is the unit of the European Commission that is responsible for banking and finance, informed the European Parliament and the Council of the European Union about the current status of this initiative in a letter[3] dated 08.07.2021. Due to these delays, it is therefore being targeted to bundle all of the thirteen RTS that are currently under development into a single delegated act and for them to enter into force with effect from 01.07.2022. The originally fixed date for their application was 01.01.2022, so their enactment has therefore been postponed by six months. On 25 November 2021, in a further letter, John Berrigan informed that their enactment has been further postponed until 01.01.2023. The initial reference period for the new disclosure obligations is therefore intended to be the 2022 calendar year.
The planned applicability of the RTS from 01.01.2023 does not have any impact on the already existing general applicability of the Disclosure Regulation since 10.03.2021 as well as the disclosure requirements set out therein. It is therefore already legally necessary for its terms to be adhered to by financial market participants and financial advisers based on a set of principles. This has been explained both by the European Commission in its letter[4] dated 30.10.2020 as well as by the ESAs in their Joint Supervisory Statement[5] dated 25.02.2021. The drafts of the RTS in relation to the Disclosure Regulation that have already partially been drawn up, but which have not yet entered into force[6], are publicly available and serve as guidance for financial market participants and financial advisers about how the requirements set out in the Disclosure Regulation may be implemented.
[1] Regulation (EU) 2019/2088 on sustainability‐related disclosures in the financial services sector, OJL 317 of 09.12.2019 p. 1, in the version of Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088, OJ L 198 of 22.06.2020 p. 13, EUR-Lex – 32019R2088 – EN – EUR-Lex (europa.eu).
[2] cf. e.g. Article 2a (3), Article 4 (6) and (7), Article 8 (3) and (4), Article 9 (5) and (6), Article 10 (2) as well as Article 11 (4) and (5) of Regulation (EU) 2019/2088.
[3] European Commission, Information regarding regulatory technical standards under the Sustainable Finance Disclosure Regulation 2019/2088.
[4] European Commission, Application of Regulation (EU) 2019/2088 on the sustainability-related disclosures in the financial services sector.
[5] Joint Committee of the European Supervisory Authorities, Joint ESA Supervisory Statement on the application of the Sustainable Finance Disclosure Regulation.
[6] Joint Committee of the European Supervisory Authorities, The three European Supervisory Authoritites publish the final report and draft RTS on disclosures under SFDR.