{"id":13851,"date":"2023-09-14T14:02:13","date_gmt":"2023-09-14T14:02:13","guid":{"rendered":"https:\/\/www.esgtoday.com\/?p=13851"},"modified":"2023-09-14T14:02:15","modified_gmt":"2023-09-14T14:02:15","slug":"eu-commission-considers-requiring-sustainability-related-disclosures-for-all-financial-products","status":"publish","type":"post","link":"https:\/\/www.esgtoday.com\/eu-commission-considers-requiring-sustainability-related-disclosures-for-all-financial-products\/","title":{"rendered":"EU Commission Considers Requiring Sustainability-Related Disclosures for All Financial Products"},"content":{"rendered":"\n
\n <\/div>\n\n\n\n

The EU Commission on Thursday announced the launch of a consultation on its sustainable financial disclosure practices, including questions asking for feedback on introducing sustainability-related disclosure requirements for all financial products offered in the EU, even if those products have not made any sustainability claims.<\/p>\n\n\n\n

The Commission\u2019s consultation is focused on the Sustainable Finance Disclosure Regulation (SFDR), which sets out how financial market participants, such as asset managers, have to communicate sustainability information to investors, regarding the integration of sustainability risks and the consideration of adverse sustainability impacts in their processes and the provision of sustainability\u2010related information with respect to financial products.<\/p>\n\n\n\n

The regulation includes classification levels for sustainability-focused investment funds, each with varying disclosure requirements, including \u2018Article 8\u2019 funds that \u201cpromote environmental or social characteristics or a combination of those characteristics,\u201d and the more stringent \u2018Article 9\u2019 funds, \u201cwhich have sustainable investment as their objective.\u201d<\/p>\n\n\n\n

One of the regulation\u2019s key requirements, and among the most challenging for asset managers, is for reporting on Principal Adverse Impact (PAI) that investment decisions have on a broad range of sustainability factors, such as climate and environment, as well as social and employee matters, respect for human rights, anti-corruption and anti-bribery aspects.<\/p>\n\n\n\n

While the consultation explains that the SFDR was designed to require products that make sustainability claims \u201cto disclose information to back up those claims and combat greenwashing,\u201d it notes that these requirements \u201ccould be viewed as placing additional burden on products that factor in sustainability considerations,\u201d and asks respondents to consider if all products \u201cregardless of related sustainability claims,\u201d should have uniform disclosure requirements.<\/p>\n\n\n\n

The consultation adds that this move could also have the benefit of allowing investors to understand products\u2019 sustainability performance even for products that don\u2019t make sustainability claims.<\/p>\n\n\n\n

The consultation continues to ask what disclosure requirements should be considered for all financial products, listing taxonomy-related disclosures, engagement strategies, exclusions, and information about how ESG-related information is used in the investment process.<\/p>\n\n\n\n

In addition to the potential disclosure requirement changes, and questions about the current functioning of the SFDR regulations, the EU Commission\u2019s consultation also included questions on developing more \u201cprecise EU-level product categorisation system based on precise criteria\u201d for sustainable financial products beyond its current \u201cArticle 8 and 9\u201d categories.<\/p>\n\n\n\n

Following the launch of the consultation, Mairead McGuinness, Commissioner for Financial Services, Financial Stability and Capital Markets Union, said:<\/p>\n\n\n\n

\n

\u201cSustainability information is key to empowering investors to make informed decisions on their investments. Since the Sustainable Finance Disclosures Regulation (SFDR) was proposed in 2018, a lot has changed in the world of sustainable finance. Today we are launching an in-depth three-month consultation for stakeholders. We want to know if our rules meet their needs and expectations, and if it is fit for purpose.\u201d<\/p>\n<\/blockquote>\n\n\n\n

Click here<\/a> to access the consultation.<\/p><\/span>","protected":false},"excerpt":{"rendered":"

The EU Commission on Thursday announced the launch of a consultation on its sustainable financial disclosure practices, including questions asking for feedback on introducing sustainability-related disclosure requirements for all financial products offered in the EU, even if those products have not made any sustainability claims. The Commission\u2019s consultation is focused on the Sustainable Finance Disclosure […]<\/p>\n","protected":false},"author":2,"featured_media":13852,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[37,31,2],"tags":[],"acf":[],"yoast_head":"\nEU Commission Considers Requiring Sustainability-Related Disclosures for All Financial Products - ESG Today<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.esgtoday.com\/eu-commission-considers-requiring-sustainability-related-disclosures-for-all-financial-products\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"EU Commission Considers Requiring Sustainability-Related Disclosures for All Financial Products - ESG Today\" \/>\n<meta property=\"og:description\" content=\"The EU Commission on Thursday announced the launch of a consultation on its sustainable financial disclosure practices, including questions asking for feedback on introducing sustainability-related disclosure requirements for all financial products offered in the EU, even if those products have not made any sustainability claims. 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