ESAs Propose Amendments to SFDR Level II

21 April 2023
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Key Takeaways:
  • On 12 April 2023, the Joint Committee of European Supervisory Authorities (the “ESAs”) published a consultation paper (the “Consultation”) proposing amendments to the Regulatory Technical Standards under the Sustainable Finance Disclosure Regulation (the “SFDR Level II”). The Committee’s Consultation is in response to the European Commission’s (the “Commission”) request to address certain technical issues and broaden the disclosure framework under the SFDR.
  • The Consultation proposes a number of changes to the SFDR Level II rules, including: (i) extending the list of social indicators for principal adverse impacts (“PAIs”); (ii) improving the definitions, methodologies, metrics and presentation for various PAI indicators; (iii) extending disclosures (and related reporting) under the “do no significant harm” (“DNSH”) principle; (iv) introducing new disclosures regarding greenhouse gas (“GHG”) emissions reduction targets; and (v) proposing changes to the templates for pre-contractual and periodic disclosures.
  • The ESAs’ proposals are wide ranging and include additional guidance on several key concepts under the SFDR.