Sustainable Finance: ESAs provide specific guidance on the SFDR application timeline


Sustainable finance: ESAs consult on taxonomy-related sustainability disclosures

25 March 2021

Regulatory News Alert

Context and objectives

On 17 March 2021, the three European Supervisory Authorities (ESAs) published a joint consultation paper on draft regulatory technical standards (RTS) regarding the content and presentation of sustainability disclosures under Articles 8(4), 9(6) and 11(5) of the Sustainable Finance Disclosure Regulation (SFDR).

The Taxonomy Regulation (TR) amends the SFDR to empower the ESAs to develop further RTS on taxonomy-related product disclosures. These changes include the following requirements for the ESAs:

  • Under Article 8(4) of the SFDR: to develop additional disclosure rules on the pre-contractual information for Article 8 products using the environmental taxonomy ("light green" products that promote environmental characteristics);
  • Under Article 9(6) of the SFDR: to develop additional disclosure rules on the pre-contractual information for Article 9 products ("dark green" products that invest in an "economic activity that contributes to an environmental objective") making use of the environmental taxonomy; and
  • Under Article 11(5) of the SFDR: to develop additional disclosure rules on the periodic information for both Article 8 and Article 9 products making use of the environmental taxonomy.
PDF - 600kb

ESAs proposals

Disclosure requirements

The consultation paper proposes:

  1.  A set of information to be disclosed for products making sustainable investments, more specifically those investing in activities that have environmental objectives in compliance with the TR. While the amendments are particularly targeted at Article 9 SFDR products, they are also relevant for Article 8 SFDR products that intend to make sustainable investments in environmental objectives.
  2. A description of “how and to what extent” the economic activities that the product invests in qualify as environmentally sustainable under the TR. This disclosure consists of two elements:
  • A graphical representation of the taxonomy-alignment of the financial product’s investments and a key performance indicator calculation for that alignment; and
  • A statement that the activities funded by the product that qualify as environmentally sustainable comply with the TR’s detailed criteria.

The ESAs propose to amend the pre-contractual and periodic disclosure templates proposed in the draft RTS under the SFDR, by adding a new section that includes the disclosures required under the TR. This would make the presentation of the related disclosures more consistent.

Single rulebook

The ESAs aim to have the RTS on disclosure rules function as a single rulebook for sustainability disclosures at Level 2 for both the original empowerments in the SFDR and the additional ones added by the TR. This would be accomplished by amending the draft RTS under the SFDR to avoid overlapping or redundant duplicate requirements across the two regulations.

One set of RTS

The ESAs also agreed to create one set of RTS for all the environmental taxonomy-related disclosures that would cover the six objectives of Article 9 TR. This set of RTS would have two different application deadlines depending on which set of environmental objectives is relevant to the product . In particular, the RTS should apply regarding the first two environmental objectives from 1 January 2022, and regarding the remaining four environmental objectives from 1 January 2023.

Next steps

Although these RTS are still drafts, they are also the most recent taxonomy-related documentation available. Therefore, companies may want to use these RTS as a first step for analysis and implementation, as they are in some respects paving the way for the future delegated regulation in this field.

The closing date for responses to the consultation paper is 12 May 2021.

The ESAs will likely issue the final report with the draft RTS by late June or early July 2021.


How can Deloitte help?

This ESAs’ guidance will apply to and be useful for all stakeholders impacted by the SFDR regulation, notably in their preparation for disclosure at firm level by 2022.

These Guidelines are a definite help in understanding and applying the SFDR requirements until the delegated regulations are finalized. In some respects, they may serve as a guiding light in the interim period. ESMA’s aim is to ensure coherence in the market’s interpretation so that environmental, social and governance (ESG) standards converge and are aligned at EU level.


How can Deloitte help you?

Deloitte’s sustainability team and other dedicated services will help you design and implement your optimal sustainable journey in light of the future evolution of the regulatory framework and market trends. Deloitte specialists can help you from design and strategy to the concrete implementation of your projects.

The Deloitte Regulatory Watch Kaleidoscope service helps you stay ahead of the regulatory curve to better manage and plan upcoming regulations.


Subject matter specialists

Pascal Martino
Partner – Banking Leader
Tel: +352 45145 2119

Francesca Messini
Director – Sustainable Finance Leader
Tel: +352 45145 2791

Florence Buron
Director - Financial Industry Solutions
Tel: +352 45145 2704

Dario Zambotti
Director - Audit Industry Solutions
Tel: +352 45145 2677

Regulatory Watch Kaleidoscope service

Simon Ramos
Partner – Investment Management
Advisory & Consulting Leader
Tel: +352 45145 2702

Jean-Philippe Peters
Partner – Risk Advisory
Tel: +352 45145 2276

Benoit Sauvage
Director – Risk Advisory
Tel: +352 45145 4220

Marijana Vuksic
Senior Manager – Risk Advisory
Tel: +352 45145 2311


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