New ESMA Guidance On Sustainability Risks And Disclosures

On 31 May 2022, ESMA published a supervisory briefing on sustainability risks and disclosures in investment management (''Briefing''). The Briefing is targeted at EU national competent authorities (''NCAs'') and aims to ensure convergence on the supervision of sustainability-related disclosures as well as the supervision of how fund managers integrate sustainability risks in their organisational framework and decision-making process.

While the Briefing is aimed at NCAs, is non-binding and not subject to any 'comply or explain' provisions, it sets out several key supervisory expectations. It also provides a useful reference point to anticipate the regulatory approaches in assessing sustainability disclosures which will be an important element to consider when implementing SFDR Phase II.