CSSF launches second stage of its supervisory examinations and updates its supervisory priorities in sustainable finance

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On 22 March 2024, the CSSF published two Communiqués on its supervisory actions in sustainable finance.

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On 22 March 2024, the Commission de Surveillance du Secteur Financier (CSSF), Luxembourg’s financial regulator, published two significant Communiqués on sustainable finance:


In summer 2023, ESMA announced the launch of a CSA on sustainability-related disclosures and the integration of sustainability risks in the investment fund sector with three main objectives:

In this context, the CSSF announced in September 2023 its plan to follow a two-stage process to complete this regulatory examination mandated by ESMA:

Key information and expectations

Now that the first stage is complete, the CSSF’s Communiqué of 22 March announces the start of the second stage of the CSA.

Similar to the process followed for the first stage, on March 19, the CSSF contacted a selected sample of in-scope IFMs by email.

The selected entities have been asked to complete a questionnaire on:

The CSSF and other EU financial regulators will continue to conduct these inspections until Q3 2024, as announced by ESMA, which plans to draft its final report on this CSA in Q1 2025.

Access the full Communiqué here_

The CSSF took the opportunity provided by the above Communiqué to update and reiterate its supervisory priorities in sustainable finance and to confirm that it will continue with its risk-based approach to supervision. At the same time, the CSSF also stressed that the primary responsibility of ensuring compliance with applicable requirements lies with the supervised entities and their board members.

The priorities announced are consistent with those from 2023, with a focus on:

In this context, the CSSF draws the market’s attention to the ESMA public statement on guidelines for fund names.

In its Communiqué, the CSSF also outlines other key focus areas that will drive its supervisory activities for other groups of market participants, such as:

For credit institutions:

For investment firms:

For issuers:

Access the full Communiqué here_


Next steps

Like many other financial regulators around the world, the CSSF is expected to continue and strengthen its supervision of financial market participants in Luxembourg under growing pressure from ESMA.

ESG compliance should not be seen as merely an exercise of product-level disclosures but instead as an internal governance project that requires the implementation of specific policies and procedures, the amendment of those already in place, and supported by specific skills and resources (incl. data and new tools).

ESG compliance should not be associated with the management, distribution or other advice of financial products falling under Article 8 or 9 of the SFDR. Many of the requirements described above apply to all financial market participants, regardless of the nature of the financial products that they manage and regardless of the sustainability commitments they may or may not have made.


How we can help

Get in touch with your Arendt contact to find out more about our ESG compliance check and mock inspection services that can help you test, and improve, your ESG compliance to ensure that any supervisory action will be dealt with as smoothly as possible.


Author: Adam Zerrouk

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Luxembourg Newsflash – CSSF launches second stage of its supervisory examinations and updates its supervisory priorities in sustainable fin

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