Signed by the European Parliament and the Council of the European Union on 27 November 2019 and published in the Official Journal of the European Union on 9 December 2019, the regulation on sustainability-related disclosures in the financial services sector (the “Disclosure Regulation”) will apply with effect from 10 March 2021.


The Disclosure Regulation intends to provide harmonized disclosure requirements for investment products which:

  • Promote environmental and/or social objectives; and
  • Have “sustainable investment” (defined as investing with an environmental objective) as their objective.


Whilst the Disclosure Regulation will not apply until 10 March 2021, firms in scope should start planning how they will implement the new disclosure requirements now, and should consider whether it is appropriate to address the pre-contractual disclosure requirements in offering documents for all new products going forward.Who?

The following entities are all in scope of the Disclosure Regulation:

  • AIFMs;
  • UCITS management companies;
  • Investment firms authorized under MiFID II providing portfolio management or investment advice; and
  • Managers of (i) qualifying venture capital funds and (ii) qualifying social entrepreneurship funds.

The Disclosure Regulation also bring firms within scope of certain requirements even when they are not managing or advising on such products.Why?

Put simply, ESG significance for asset managers is growing. With continued media scrutiny of sustainability and environmental pressures, it has become an increasing priority for investors and, particularly in Europe, a key consideration in asset allocation. Regulating “greenwashing” has been high on the EU’s regulatory agenda and the Disclosure Regulation intends to provide harmonized disclosure requirements for investment products.What Next?

A summary of the application of the key requirements is set out below, and firms in scope of the Disclosure Regulation will need to take steps to ensure that they comply with these requirements:

ESG investment is now high on the regulatory agenda in the European Union and it is likely that attention on this area will continue to increase.