On March 17, the European Supervisory Authorities (ESAs) published a joint consultation paper on draft regulatory technical standards (RTS) regarding the content and presentation of sustainability disclosures under Articles 8(4), 9(6) and 11(5) of the Sustainable Finance Disclosure Regulation ((EU) 2019/2088) (SFDR).

Article 25 of the Taxonomy Regulation ((EU) 2020/852) amends the SFDR to allow the ESAs to include RTS on additional disclosure obligations for products using environmental taxonomy.

The ESAs have agreed to:

  • amend the draft RTS on the content, methodologies and presentation of disclosures and aims to create a single rulebook for RTS on sustainability disclosures; and
  • create one set of RTS for all the environmental taxonomy-related disclosures, covering the six objectives of Article 9 of the Taxonomy Regulation, with two different application deadlines depending on the product’s environmental objectives.

The ESAs’ proposals on how activities funded by the product are taxonomy-aligned consist of:

  • a graphical representation of the taxonomy-alignment of investments of the financial product and a key performance indicator (KPI) calculation for that alignment; and
  • a statement that the activities funded by the product qualifying as environmentally sustainable are compliant with the criteria of the Taxonomy Regulation.

The ESAs also propose to standardize the disclosures in the draft SFDR RTS by adding a new section including the Taxonomy Regulation disclosures.

The disclosure requirements added in Articles 8(2a), 9(4a), and 11(1)(c)-(d) of the SFDR refer to information required to be published under Articles 5 and 6 of the Taxonomy Regulation. The European Commission consulted on a draft Delegated Regulation in November 2020 and the final text is expected to be adopted later in 2021.

The consultation closes on May 12 and the ESAs intend to publish a final report with final draft RTS for submission to the Commission by late June or early July.

Joint Consultation Paper