28 September 2023
The Joint Committee of the three European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) today published their second annual Report on the extent of voluntary disclosure of principal adverse impacts under the Article 18 of the Sustainable Finance Disclosure Regulation (SFDR).
Similar to the approach adopted for 2022 Report, the ESAs launched a survey of National Competent Authorities to assess the current state of entity-level and product-level voluntary principal adverse impact (PAI) disclosures under the SFDR, and have developed a preliminary, indicative and non-exhaustive overview of good practices and areas that need improvement.
The 2023 Report also includes a set of recommendations for the European Commission to consider ahead of the next comprehensive assessment of the SFDR.
Principal Adverse Impacts (PAI) are the most significant negative impacts of investments on the environment and people. When a financial market participant considers principal adverse impacts, it means that it should seek to reduce the negative impact of the companies they invest in.