ESAs propose enhancements to sustainable finance disclosure regulation
Earlier this month the European Supervisory Authorities (EBA, EIOPA, and ESMA – collectively ESAs) published a joint Opinion on improving the Sustainable Finance Disclosure Regulation (SFDR). The ESAs changes are based on learnings gained from the SFDR’s implementation to date.
The Opinion recommends introducing two voluntary categories for financial products: “sustainable” and “transition.” These categories aim to simplify the product landscape, helping consumers understand their purpose.
Additionally, the ESAs propose the introduction of a sustainability indicator to grade financial products such as investment funds, life insurance, and pension products. They also advocate for appropriate disclosures for products outside the two main categories, refining the definition of sustainable investments, and simplifying the presentation of disclosures to investors.
The SFDR has been a major part of the European Union’s efforts to promote transparency in sustainable finance. The ESAs’ recommendations come as part of a comprehensive review of the SFDR framework by the European Commission, following initial implementation.
For more information, you can read the Opinion here.
