SFDR survey: Good level of trust in European authorities but yet some work to do

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SFDR survey: Good level of trust in European authorities but yet some work to do

Press Release

19 November 2020

Deloitte Luxembourg unveils the results of a recent sustainable finance survey of financial market participants with activities based in Europe.

Luxembourg, 19 November 2020: Most financial market participants (FMPs) involved in sustainable and responsible investments (SRI) are well informed about the requirements that the Sustainable Finance Disclosure Regulation (SFDR) will impose as of 10 March 2021. Nevertheless, not all players feel adequately prepared to address the new disclosure and reporting obligations. These findings were revealed in a recent Deloitte survey of European and international market players within the scope of the SFDR.

Our goal was to take the temperature of FMPs’ understanding and level of readiness for the major changes foreseen by the new regulation,” explains Flavia Micilotta, Partner and Sustainability Leader at Deloitte Luxembourg. “We took into account the multiple layers of complexities involved to assess players’ main concerns regarding environmental, social and governance (ESG) data and their perception of the interplay between regulators, supervisors and national competent authorities (NCAs) to guarantee a fair implementation of the SFDR.”

Towards a level playing field

According to the study, 75 percent of banking representatives and 69 percent of asset managers are concerned about the misalignment between ESG ratings and the SFDR disclosure requirements. Survey respondents in the Luxembourg market are more optimistic, with only 33 percent of banks and 45 percent of asset managers believing there is a potential gap between the requirements and the reporting data because of a lack of consistency and common reporting standards.

Across geographies, respondents have shown a good level of trust in how things have been evolving in the sustainable investment sector, emphasizing consistent communication and a fair level of consideration for clients who are the intended beneficiaries of the planned changes,” states Flavia Micilotta, Partner and Sustainability Leader at Deloitte Luxembourg. “However, we have seen that most players are expecting a higher level of coherence between the different regulatory initiatives and existing reporting standards.”

All the financial advisors and insurance representatives surveyed agreed that the indicators proposed in the SFDR’s reporting templates should mirror, at least to some extent, the evolving nature of the EU Taxonomy and other regulations, such as the Non-Financial Reporting Directive (NFRD).

A call for collaboration on the European and national level

When it comes to the creation of uniform disclosure documents, 75 percent of banking sector participants thought that European supervisory authorities (ESAs) should work with NCAs to devise a realistic way forward, being fully aware of NCAs’ supervisory role and their knowledge of the industry’s ability to comply with recent developments. The majority of financial advisory players (60 percent) agreed.

In the coming months, FMPs will have to continue their analysis and choose the most appropriate positioning for each aspect of the legislation, defining a concrete SFDR roadmap of what needs to be modified in their processes, governance and products,” concludes Flavia Micilotta.

The sustainable finance survey

The findings of the report titled “Sustainable Finance Disclosure Regulation: Is the financial industry ready for the big one?” are based on a study conducted by Deloitte Luxembourg between June and September 2020. Ninety players in the scope of the SFDR from 21 countries participated in the survey, including asset managers, bankers, financial advisors and insurers. Around one-third of the participants came from Luxembourg. Participants responded to eight main questions focusing on the link between expected sustainability risk disclosures and the EU Taxonomy, the balance between reporting and accountability, and the relationship with current rating protocols and existing frameworks, as well as the readiness of NCAs or the potential evolution of ESG indicators.

The complete report can be downloaded at www2.deloitte.com/lu/sustainable-finance-disclosure-regulation.


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In Luxembourg, Deloitte consists of more than 100 partners and over 2,300 employees and is amongst the leading professional service providers on the market. For over 65 years, Deloitte has delivered high added-value services to national and international clients. Our multidisciplinary teams consist of specialists from different sectors and guarantee harmonized quality services to our clients in their field. Deloitte General Services, société à responsabilité limitée, is an affiliate of the Luxembourg member firm of Deloitte Touche Tohmatsu Limited, one of the world’s leading networks of professional services firms.

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