Summary 17/03/2021
The three European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) have today issued a Consultation Paper seeking input on draft Regulatory Technical Standards (RTS) regarding disclosures of financial products investing in economic activities that contribute to an environmental investment objective. These economic activities are defined by the EU Regulation on the establishment of a framework to facilitate sustainable investment (Taxonomy Regulation).
The proposed draft RTS aim to:
- facilitate disclosures to end investors regarding the investments of financial products in environmentally sustainable activities.; and
- create a single rulebook for sustainability disclosures under the Regulation on sustainability-related disclosures in the financial services sector (SFDR) and the Taxonomy Regulation. This will be done by amending the draft RTS under the SFDR, to minimise overlapping or duplicative requirements between the two regulations.
The consultation paper includes additional taxonomy-related disclosures concern information about which environmental objectives the investments of the product contribute to, and information about how, and to what extent, the activities funded by the product are Taxonomy-aligned.
The ESAs’ proposal on how and to what extent activities funded by the product are taxonomy- aligned, consist of two elements:
- a graphical representation of the taxonomy-alignment of investments of the financial product and a key performance indicator calculation for that alignment; and
- a statement that the activities funded by the product that qualify as environmentally sustainable, are compliant with the detailed criteria of the Taxonomy Regulation.
The ESAs also propose to standardise the presentation of the disclosures by amending the templates for the pre-contractual and periodic disclosures proposed in the draft RTS under the SFDR, by adding a new section that includes the disclosures required under the Taxonomy Regulation.
By amending the SFDR, the Taxonomy Regulation empowered the ESAs to develop draft RTS on additional pre-contractual, and periodic disclosure, obligations for financial products making sustainable investments with environmental objectives.
Next steps
The closing date for responses to the consultation is 12 May 2021. Following the consultation period, the draft RTS will be finalised and submitted to the European Commission. A consumer testing exercise on the amended templates will be conducted in April in the Netherlands and in Poland.
Public Hearing
Date:
29/04/2021, 13:00:00 to 17:30:00 Paris time | location: VIA CONFERENCE CALL
The European Supervisory Authorities (ESAs) are organising an online public event on 29 April, from 13:00-17:30. During this event, the ESAs will present their proposals and open a dialogue with stakeholders on draft Regulatory Technical Standards (RTS) on the content and presentation of product disclosures (covered by the Taxonomy Regulation) imposing additional rules for the subset of financial products that make sustainable investments with environmental objectives under the Sustainable Finance Disclosure Regulation (SFDR). The ESAs have proposed RTS that would amend their 4 February 2021 general RTS under SFDR in a consultation paper. The consultation paper contains proposals on how and to what extent activities funded by the product are taxonomy-aligned.
The public hearing will be of interest to stakeholders affected by the additional taxonomy-related product disclosures, in particular financial market participants, their representative associations, environmental associations, investor representatives or consumer bodies, and consultants or academics and representatives from the EU and national institutions.
Registration
The ESAs invite interested stakeholders to register using the link provided below to take part in the hearing. Participants will be able to join the webinar online or by dialling in. Due to the technical limitations of the online webinar environment, there is a limited number of places available. Places will be allocated on a first come first serve basis. Please note that participation will be limited to two participants per organisation to ensure diversity in the participation.
The agenda for the hearing will be released closer to the date of the hearing and will cover the scope, approach and content of the consultation paper.
