The European Commission (EC) published, in the Official Journal of the European Union, the Delegated Regulation 2022/1288, which sets out certain regulatory technical standards supplementing the EU Sustainable Finance Disclosure Regulation (SFDR: Regulation 2019/2088). The Regulation will enter into force on August 14, 2022, which is the twentieth day after publication in the Official Journal, and will be applicable from January 01, 2022.
SFDR had mandated the European Supervisory Authorities (ESAs) to develop regulatory technical standards to further specify the content, methodologies, and presentation of information to be provided as part of various SFDR provisions. Earlier, ESAs had submitted, in April 2020, then in February 2021, and finally in October 2021, the relevant draft regulatory standards to EC. Also, in a letter dated July 08, 2021, ESAs announced their intention was to bundle all 13 of the regulatory technical standards required under SFDR in a single Delegated Act, which the EC adopted and published April 06, 2022. Following this, these regulatory standards were subject to a period of scrutiny by the European Parliament and the Council as part of the legislative process. Post this, the final standards have been published in the Official Journal via Regulation 2022/1288 and will now apply from January 01, 2023.
The Regulation 2022/1288 contains the regulatory technical standards specifying the details of the content and presentation of the information in relation to the principle of "do no significant harm," the sustainability indicators and adverse sustainability impacts, and the promotion of environmental or social characteristics and sustainable investment objectives in pre-contractual documents, on websites and in periodic reports. The Annexes to the regulatory technical standards laid out in the Regulation 2022/1288 contain the final prescribed-form templates with respect to the:
- statement for presenting key performance indicators under principal adverse sustainability impacts regime (Annex I)
- pre-contractual disclosure for the financial products referred to in Article 8, paragraphs 1, 2 and 2a, of SFDR and Article 6, first paragraph, of the Taxonomy Regulation (2020/852) (Annex II)
- pre-contractual disclosure for the financial products referred to in Article 9, paragraphs 1 to 4a, of SFDR and Article 5, first paragraph, of the Taxonomy Regulation (Annex III)
- periodic disclosure for the financial products referred to in Article 8, paragraphs 1, 2 and 2a, of SFDR and Article 6, first paragraph, of the Taxonomy Regulation (Annex IV)
- periodic disclosure for the financial products referred to in Article 9, paragraphs 1 to 4a, of SFDR and Article 5, first paragraph, of the Taxonomy Regulation (Annex V)
The Regulation 2022/1288 states that it is necessary to require financial market participants that have considered principal adverse impacts of investment decisions on sustainability factors as referred to in Article 4(1), point (a), of Regulation (EU) 2019/2088, or as required by Article 4(3) or (4) of that Regulation, by December 31, 2022, to publish the first time the information on those impacts on their websites in separate sections titled "Statement on principal adverse impacts of investment decisions on sustainability factors" by June 30, 2023 for the period of January 01, 2022 until December 31, 2022,
Keywords: Europe, EU, Banking, Insurance, Securities, Regulatory Technical Standards, SFDR, Sustainable Finance, ESG, Climate Change Risk, Disclosures, EC
Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
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