4 December 2023

ESAs update SFDR L2 rules for EC approval

On 4 December, the European Supervisory Authorities have published a Final Report containing further draft changes to their Sustainable Finance Disclosure Regulation (SFDR) technical standards.

This follows a ‘Level 2’ consultation that ended five months ago.

Prominent updates include two new SFDR disclosure templates in relation to Pre-contractual & Website disclosures:

  • Article 8 (“light-green”) financial products: with underlying investment options that promote environmental and/or social characteristics [Annex VII, p.146]
  • Article 9 (“dark-green”) financial products: with underlying investment options that all have sustainable investment as their objective [Annex VIII, p.147]

All previous financial product disclosure templates have been significantly changed, including new greenhouse gas (GHG) emission reduction target sections. The proposed ‘dashboard’ summaries also remain intact.

The EU Commission now has 3 months to decide if they will endorse these latest technical standards. As before, there remains no formal indication when these Level 2 rules are expected to legally apply.

NB: a reminder that if this revised SFDR RTS is approved, it will apply separately, ahead of other changes that may arise from the SFDR Level 1 consultation currently underway.

Further analysis to follow.


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