Updated CSSF FAQ on the Sustainable Finance Disclosure Regulation (SFDR)

The CSSF has updated its FAQ on the SFDR and the financial services sector to reflect current CSSF supervisory practice.



On 13 March 2023, the CSSF published an updated version of its FAQ about Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (SFDR). In this revision, the CSSF (i) updates the list of “Key European and CSSF publications” in relation to the SFDR and (ii) adds three new questions reflecting current CSSF practice.

Please refer to Arendt’s previous newsflash_ for further details on the scope and content of the CSSF FAQ.

New content (questions 7 to 9)

1. Use of “ESG” and/or sustainability-related terminology in the names of investment funds

The CSSF reminds financial market participants (FMPs) that, in accordance with the ESMA Supervisory Briefing on sustainability risks and disclosures in the area of investment management, ESG-related terms (such as “ESG”, “green”, “sustainable” , ”social”, “ethical” or “impact”) should only be used in the names of investment funds when supported in a material way by the ESG or sustainability characteristics, themes or objectives described in the pre-contractual disclosures of the relevant investment fund.

In other words, the CSSF expects FMPs disclosing under Articles 6, 8 or 9 of the SFDR to use fund names which are not misleading and aligned with the relevant fund documentation. The CSSF also recommends that FMPs consider any further developments at European level in this area. This is probably a reference, in particular, to the ESMA Guidelines on funds’ names using ESG or sustainability-related terms_, which are under preparation.

2. Disclosure of the methodology used to define “sustainable investments”

The CSSF clarifies that the methodology applied by FMPs to determine whether an investment qualifies as “sustainable investment” within the meaning of Article 2(17) of the SFDR (for example, the threshold used when applying a pass-fail approach) should be made available to investors. This can be done, for instance, through the mandatory pre-contractual templates, prospectus/issuing document and/or Article 10 SFDR website disclosures.

3. Article 9 SFDR products: use of EPM for hedging purposes in the “#2 Not Sustainable” portion of the portfolio

While the CSSF acknowledges that efficient portfolio management (EPM) techniques may be used by FMPs for many purposes, it nevertheless considers that only EPM techniques used for hedging purposes only can fall within the “remaining portion” (that is, “#2 Not sustainable”) of the investment portfolio of investment funds subject to Article 9 of the SFDR.

The CSSF also reminds FMPs that they remain responsible for assessing the actual purpose of any EPM techniques used and thus whether they could fall within the “remaining portion” of the investment portfolio.


These latest questions, although formalising existing supervisory practice, also evidence once again the fast-moving nature of SFDR-related disclosure requirements. Please, contact our experts Antoine Peter and Antoine Portelange to remain up to date or clarify any questions you may still have.

Access the full CSSF FAQ here_


Antoine Peter

Antoine Peter is a Senior Manager at Arendt. Antoine started his career in 2014 in the banking industry. He held several positions at investment and depositary banks in both France and Luxembourg, acquiring significant knowledge and experience of capital markets and the financial sector as a whole. In 2017, Antoine joined Arendt. He gives regulatory and operational advice to clients in Luxembourg and abroad in the asset management and asset servicing businesses. He also assists clients by providing general compliance support and reviewing operating models related to governance, as well as to investment management, risk management frameworks and valuation models. Specialising in ESG and susta...



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