European financial regulators put forward finance disclosure rule changes


Three European financial regulatory agencies have announced a series of proposed amendments to the EU’s SFDR. 

According to ESG Today, the European Supervisory Authorities revealed the amendments are aimed at extending and simplifying the SFDR.

The proposals include the addition of information regarding the decarbonisation targets of financial products and the inclusion of a dashboard providing information about products’ sustainable and taxonomy-aligned investment.

The ESA’s include the European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority.

The EU SFDR regulation aims to establish harmonised rules for financial market participants including investors and advisers on transparency regarding the integration of sustainability risks and the consideration of adverse sustainability impacts in their processes and the provision of sustainability‐related information with respect to financial products.

To deal with some of the complexity around the current rules, the ESAs have proposed consulting stakeholders on changes to the layout, structure and language of the regulation’s template, and developed a dashboard of key information for pre-contractual and periodic disclosure, such as whether the investment product has a sustainable investment objective or promotes sustainability characteristics as well as the minimum amounts of sustainable and taxonomy-aligned investments and PAI and GHG reduction targets.

Further proposals include extensions to the list of universal social indicators for the disclosure of the PAIs, refinements to the content of other indicators for adverse impacts, GHG target disclosures including the level of ambition and how the target will be achieved, among other technical revisions to improve and simplify disclosure requirements.

The FCA recently revealed it will be among the 13 international regulators so far taking part in the first-ever Greenwashing TechSprint that will launch on 5 June this year.

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