The ESAs provide in their report an overview of best practices and less good practices for disclosures under Article 4 (1) (a) and (b) of the SFDR.
Key findings from the report suggest:
- A significant variation in respondents' compliance with voluntary disclosures can be observed. Overall, the first disclosures since the application of the SFDR are not very detailed. This tendency might change for the 2022 reporting period with the SFDR Delegated Regulation coming into effect.
- Overall low levels of disclosure of the degree of alignment with the objective of the Paris Agreement were reported, with disclosures on the alignment being vague and high level.
- Low compliance with the details required for explaining why FMPs do not consider the adverse impact of their investment decisions is observed.
The report lists several recommendations for National Competent Authorities, including:
- identifying non-compliant FMPs through continuous market supervision,
- ensuring representativeness of samples, future surveys should be conducted with a bigger sample size of FMPs,
- enhancing supervision, FMPs are encouraged to conduct regular surveys in their own market,
- the organization of offsite inspections of FMPs,
- utilizing IT tools to simplify assessment and
- providing additional instructions to supervised entities regarding technical aspects of website disclosures.
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