Today we return to an important topic: the now-famous Sustainable Finance Disclosure Regulation, or “SFDR”. This time, we bring you a special newsflash video with some changes regarding the SFDR’s level 2 measures: the regulatory and technical standards, or “RTS”.
As you may be aware, the RTS are expected to provide extra guidance on the interpretation of the SFDR. In addition, they require enhanced disclosures for the integration of principal adverse impacts, and for eligible financial products under Articles 8 or 9 of SFDR. These RTS were supposed to be supplemented and amended by the Taxonomy-related RTS that integrate Taxonomy-related information into those enhanced disclosures.
Both the SFDR RTS and the Taxonomy-related RTS were set to apply from the first of January, 2022.
However, the situation has changed. On the 8th of July, the European Commission addressed an important letter to the European Parliament and the Council, announcing that the date of applicability for all RTS will be deferred by 6 months, to the first of July 2022. This was decided because the RTS are so long and so technical, and because they were submitted to the Commission late, with amendments already planned.
While this is a welcome delay, 6 months is still only a brief period. You should use the slightly longer interim period as an opportunity to get ahead on completing the current RTS templates, and checking your current disclosures for compliance with the SFDR RTS and the Taxonomy-related RTS.
We may have gained 6 months, but experience has shown that, when it comes to implementing ESG regulations, time flies.
And remember: the reporting periods provided for in the level 1 SFDR are unchanged. Article 8 and 9 products will still have to start reporting on their ESG alignment as from January 2022. This may be a challenge, without reporting templates or RTS available. Market practices will have to be set. And, as always, we will be pleased to help you in this respect.