The three European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) have today issued a Consultation Paper seeking input on draft Regulatory Technical Standards (RTS) regarding disclosures of financial products investing in economic activities that contribute to an environmental investment objective.
These economic activities are
defined by the EU Regulation on the establishment of a framework to facilitate sustainable investment (Taxonomy Regulation).
The proposed draft RTS aim to:
- facilitate disclosures to end investors regarding the investments
of financial products in environmentally sustainable activities.; and
- create a single rulebook for sustainability disclosures under the
Regulation on sustainability-related disclosures in the financial
services sector (SFDR) and the Taxonomy Regulation. This will be done by
amending the draft RTS under the SFDR, to minimise overlapping or duplicative requirements between the two regulations.
The consultation paper includes additional taxonomy-related
disclosures concern information about which environmental objectives the
investments of the product contribute to, and information about how,
and to what extent, the activities funded by the product are
Taxonomy-aligned.
The ESAs’ proposal on how and to what extent activities funded by the product are taxonomy- aligned, consist of two elements:
- a graphical representation of the taxonomy-alignment of investments
of the financial product and a key performance indicator calculation
for that alignment; and
- a statement that the activities funded by the product that qualify
as environmentally sustainable, are compliant with the detailed criteria
of the Taxonomy Regulation.
The ESAs also propose to standardise the presentation of the
disclosures by amending the templates for the pre-contractual and
periodic disclosures proposed in the draft RTS under the SFDR, by adding
a new section that includes the disclosures required under the Taxonomy
Regulation.
By amending the SFDR, the Taxonomy Regulation empowered the ESAs to
develop draft RTS on additional pre-contractual, and periodic
disclosure, obligations for financial products making sustainable
investments with environmental objectives.
Next steps
The closing date for responses to the consultation is 12 May 2021.
Following the consultation period, the draft RTS will be finalised and
submitted to the European Commission. A consumer testing exercise on the
amended templates will be conducted in April in the Netherlands and in
Poland.
EBA
© EBA
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