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Delegated Regulation specifies from 1 January 2023 in practical terms how financial service providers are required to disclosure sustainability-related information

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In the battle against climate change and the transition to a low-carbon, more sustainable, and resource-efficient circular economy, great significance is being placed on the financial markets and financial service providers in the European Union (EU). The European Disclosure Regulation (SFDR)[1] is a significant regulatory instrument obliging financial service providers to disclose their strategies and processes, as well as to state the contribution that each and every of their products makes to this end. In principle, the general sustainability-related disclosure requirements of the SFDR have already been in force since 10 March 2021, but a Delegated Regulation[2] now specifies the content, methods and presentation in a practical and precise manner with effect from 1 January 2023. The aim of the sustainability-related disclosure provisions is to provide financial market participants with valid, representative and precise information so that they are able to make informed decisions.

Clear, concise and clearly visible information

Sustainability-related disclosures must be clear, concise and clearly visible. Financial service providers falling under the scope of the SFDR are therefore required to publish indicators in a predefined, standardised format on their websites that reflect the main adverse impacts of an investment decision on sustainability factors. These include, but are not limited to: the carbon footprint; the greenhouse gas emission intensity of the entities invested in; the share of investments in companies active in the field of fossil fuels; or the share of investment in immovable property with inadequate energy efficiency. Such details are company for companies that employ on average more than 500 employees. All others are able to decide for themselves whether they choose to comply, but must at least justify why they do not wish to or are unable to do so (“Comply-or-Explain”).

In addition the Regulation also prescribes standardised forms for sustainability-related disclosure obligations in mandatory pre-contractual information (e.g. Funds prospectuses) about financial products. The following details, for example: the proportion of investments with an environmental objective, the proportion of socially relevant investments, the proportion of investments that are in line with the taxonomy whether a commercial activity is classified as ecologically sustainable, or whether there are negative impacts on sustainability factors associated with the financial product. In addition the investors must be informed in periodic reports (e.g. annual reports) about whether and how the advertised ecological and social characteristics and objectives of their financial product are actually fulfilled. The Delegated Regulation also prescribes a standardised format for doing so.

The booming market for sustainable financial products

Nearly all Austrian management companies of investment funds and real estate funds as well as two-thirds of Austrian life insurers already offer financial products that take into account sustainability criteria, and which fall under the special provisions on disclosure under the SFDR. As of 30.09.2022, more than one-third (40 % or € 78.2 billion) of the total net asset value of Austrian funds was managed in such sustainability funds; in mid-2021 the figure stood at approx. 25 %.

The fight against greenwashing

The FMA’s initial analyses on the disclosures to date under the SFDR display a very heterogeneous picture. This is primarily due to the substantial scope for interpretation in the legal rules that was open prior to the Delegated Regulation. This increased the threat of “greenwashing” while also in any case making it more difficult to compare product information. With the compulsory application of the Rules in the Delegated Regulation to the SFDR from 1 January 2023, sustainability-related information on the one hand are easier to find, and are also easier to compare due to the prescribed structure and methodology. In any case, the FMA will set a focus for supervision and inspections on the observance of these criteria, and in so doing will make a significant contribution towards greater transparency and the fight against greenwashing.

Journalists may address further enquiries to:

Klaus Grubelnik (FMA Media Spokesperson)

+43 / (0)1 / 24959-6006 or

+43/(0)676 882 49 516

[1] Sustainable Finance Disclosure Regulation (SFDR): Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector.

[2] Commission Delegated Regulation (EU) 2022/1288 of 6 April 2022 supplementing Regulation (EU) 2019/2088 of the European Parliament and of the Council with regard to regulatory technical standards specifying the details of the content and presentation of the information in relation to the principle of ‘do no significant harm’, specifying the content, methodologies and presentation of information in relation to sustainability indicators and adverse sustainability impacts, and the content and presentation of the information in relation to the promotion of environmental or social characteristics and sustainable investment objectives in pre-contractual documents, on websites and in periodic reports.

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