Summary

On 6 April 2022, the European Commission announced that is has adopted the regulatory technical standards to be used by financial market participants when disclosing sustainability-related information under the Sustainable Finance Disclosures Regulation (SFDR).1

Background

The SFDR mandated the ESAs2 to develop draft regulatory technical standards (RTS) to further specify the content, methodologies and presentation of information to be provided pursuant to various provisions of the SFDR.

The ESAs previously submitted draft RTS to the EU Commission in April 2020 and February 2021, and final draft RTS were submitted in October 2021.3 In a letter dated 8 July 2021,4 the ESAs stated their intention was to “bundle all 13 of the regulatory technical standards in a single delegated act”. The delegated act published by the EU Commission on 6 April 2022 comprises all the various RTS required under the SFDR.

The RTS include:

  • the main text of the delegated act that includes all 13 RTS, together with an explanatory memorandum;
  • Annex 4 and Annex 5 that are, respectively, the template periodic disclosure documents for Article 8 and Article 9 financial products.

Next steps and date of application

The RTS will now be subject to scrutiny by the European Parliament and the Council. When the final text is agreed, the RTS will be published in the Official Journal of the EU. The date of application of the RTS has been subject to numerous delays.5 The adopted RTS state that they are scheduled to apply from 1 January 2023, but their application date will not be definitive until confirmed by the European Parliament and the Council. The current expectation is that 1 January 2023 will be the effective date.

Dechert’s EU ESG team is currently reviewing the content of the RTS and analysing the differences between the April 2022 version of the RTS and the previous drafts of the RTS published in February and October 2021.This detailed analysis, together with a comprehensive summary of what the RTS mean for financial market participants, will be published shortly.