The Commission is expected to publish its Renewed Sustainable Finance Strategy in January 2021 (but might be pushed back to Q1/Q2 2021). The Strategy is also expected to include a legislative proposal on an EU Green Bond Standard. Please find here the IA response to the EU Renewed Sustainable Finance Strategy Consultation
The regulation sets out harmonised rules for financial market participants and financial advisors on disclosure of their integration of sustainability risks and the consideration of adverse impacts on environmental and social factors in their processes as well as the provision of sustainability-related information with respect to financial products. The application date for SFDR level 1 is scheduled for 10 March 2021. The Commission has now indicated that it will be delaying the level-2 requirements to after March 2021. The exact date is not yet confirmed but we understand March 2022 is currently being considered. The ESAs have now published a consultation on their proposed templates for Article 8 and 9 pre-contractual and periodic disclosures. The IA submitted its response on 16 October.
The Commission is currently working on delegated acts under the Taxonomy Regulation to set out details on NFRD disclosure, as well as how and to what extent companies’ activities are aligned with the EU taxonomy. This will likely have implications on the ongoing review of NFRD framework.
The Directive requires companies to include non-financial statements in annual reports which outline the policies implemented in relation to various ESG factors. The overall objectives are to increase corporate accountability, to enhance the efficient allocation of capital by providing investors with better information about investee companies, and to improve companies’ own awareness and management of sustainability-related risks and opportunities. The Commission announced a NFRD review due for Q1 2021 to introduce stricter reporting requirements. I will likely aim at developing a mandatory EU-wide standard for ESG reporting by developing common metrics, benchmarks and KPIs. This will be based of the work of the EFRAG project task force. The task force’s preliminary work will be presented in an interim report by the end of October, with a final report expected by the end of January 2021.
