This update focuses on the publication of information with new deadlines and their expectations regarding this European regulation.
The application of the SFDRs
ESAs are prioritizing the period, from March 10th 2021 to January 1st 2023, to prepare the implementation of the new technical standards of the regulation, the RTS. In order to create a level playing field and continue to protect investors, investors will be subject to new deadlines, January 1st 2023, for non-financial disclosure on the application of the RTS (Regulatory Technical Standards) and transparency on adverse sustainability impacts PAI (Principle Adverse Impact).
Alignment with the European Taxonomy
As a consequence of articles 5 and 6 of the European Taxonomy, and during this transition period, financial market players are expected to disclose information on the percentage of alignment. Regarding articles 8 and 9 classified under SFDR, this update contributes to provide a detailed explanation on the declarations of investments aligned to the European Taxonomy of financial products, which pursue an environmental sustainable investment objective. According to the ESAs, for the alignment to the Taxonomy, the European Authorities recommend the use of information directly from companies or external data providers, and not to use estimates.
The next steps
On November 25th 2021, the European Commission announced that the implementation of the RTS is postponed and will be effective as of January 1st 2023. The European Commission will have to approve the draft RTS within three months of their publication, in a single delegated act containing all 13 RTS.