Sustainable Finance Disclosure Regulation (SFDR)
Part of the EU’s action plan on sustainable growth is to promote sustainable finance, a process that takes into account environmental, social and governance (ESG) considerations when making investment decisions in the financial industry.
Regulation (EU) 2019/2088 of the European Parliament and of the Council on sustainability-related disclosures in the financial services industry (the SFDR) came into effect in March 2021. The SFDR lays harmonised rules for financial market participants and advisers on transparency with regards to the integration of sustainability risks and the consideration of adverse sustainability impact.
Entities captured under the SFDR such as:
- AIF and UCITS Managers,
- Portfolio Managers,
- Insurance Companies and
- Investment Advisers
are obliged to provide disclosures to investors and/or potential investors as to whether the products offered and/or strategies proposed have taken into account ESG considerations at a product/strategy level. Moreover, financial market participants and financial advisers are obliged to disclose to investors and/or potential investors whether they have considered negative externalities on environment and social justice of the investment decisions/advice and, if so, how this is reflected at the product level.
Our multidisciplinary teams can provide comprehensive and holistic solutions tailored to each client’s individual needs for a smooth implementation including:
- Regulatory analysis of impact on your business and its operations;
- Development of an action plan for compliance;
- Integration of ESG disclosures into client documents (offering memoranda, risk disclosures, etc.);
- Draft of new policies and procedures;
- Amendment of existing policies to align with ESG disclosures, risk assessment and target market objectives;
- Review of marketing communications to ensure consistency with SFDR objectives set by firms;
- Provision of answers to relevant queries (Q&A Service).
For more information, please feel free to contact us