ESAs Propose Amendments to SFDR, Focusing on Environmental and Social Impacts

ESAs Propose Amendments to SFDR, Focusing on Environmental and Social Impacts

By Prathamesh 28 April, 2023
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The European Supervisory Authorities (ESAs) – the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA), and the European Securities and Markets Authority (ESMA) – released a consultation paper with proposed amendments to the Delegated Regulation of the Sustainable Finance Disclosure Regulation (SFDR). The SFDR has been in place for just over a year, applicable since January 2023. The proposed changes aim to address issues that have emerged since its introduction.

The proposed amendments include expanding the list of social indicators for disclosing the adverse impacts of investment decisions and adding product disclosures regarding decarbonisation targets, among others. Technical revisions to improve disclosures on how sustainable investments do not significantly harm the environment and society, simplify pre-contractual and periodic disclosure templates for financial products, and some other technical adjustments are also proposed.

The ESAs are seeking feedback on the amendments until July 4, 2023, via the response form. They plan to hold a public hearing and consumer testing during the consultation period. The Final Report will be submitted to the European Commission in October, after considering the feedback received.

This move shows the continued focus of European regulators on sustainable finance and addressing environmental and social impacts. It is also a reminder to financial institutions and companies to consider their sustainable investment practices and disclosures in compliance with regulations like SFDR.

To find out more details please visit : https://www.xbrl.org/