SFDR: EU Commission validated RTS
On 6 April 2022, the European Commission adopted a delegated act containing technical standards (RTS) that financial market participants should apply when publishing sustainability information in the context of the Regulation on the Publication of Sustainability Information in the Financial Services Sector (SFDR – Sustainable Finance Disclosures Regulation), effective March 10, 2021.
This delegated regulation specifies the exact content, methodology and presentation of the information to be disclosed, with the primary objective of quality and comparability. Under these rules, financial sector actors will need to provide detailed information on how they address and reduce the potential negative impacts their investments may have on the environment. In addition, these new requirements will, once formally adopted, assess the sustainability performance of financial products. Compliance with sustainability information helps to strengthen investor protection and reduce greenwashing.
The delegated regulation will now be submitted to the European Parliament and the Council for consideration. The co-legislators can oppose the text for a period of 3 months after which the text will be published in the Official Journal of the EU and will enter into force. It is expected to come into force on 1 January 2023.