ESMA Supervisory Briefing on Best Practice for SFDR Disclosures—a New Phase of Regulatory Supervision and Enforcement?

6 June 2022
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Key takeaways:
  • On 31 May 2022, the European Securities and Markets Authority (“ESMA”) published a supervisory briefing on best practices for disclosures under the Regulation on sustainability-related disclosures in the financial services sector (“SFDR”). The purpose of this briefing is to ensure convergence across the European Union in the supervision of investment funds with sustainability features, and to combat greenwashing by investment funds. The supervisory briefing aims to provide guidance to national competent authorities (“NCAs”) regarding the supervision of sustainability-related disclosures and integration of sustainability risks.
  • The briefing marks a more active approach of NCAs regarding compliance with SFDR, and we would expect more audits of SFDR disclosures and enforcement actions to be taken by NCAs in Europe going forward.