ESAs Propose Adjustments To The EU SFDR Rules

On 12 April 2023, the European Banking Authority, European Securities and Markets Authority and European Insurance and Occupational Pensions Authority (the ESAs) published a joint consultation paper on a review of the Sustainable Finance Disclosure Regulation (SFDR) Delegated Regulation ((EU) 2022/1288 dated 6 April 2022), the Level 2 regulatory technical standards (RTS).

This comes in response to the European Commission's April 2022 letter asking the ESAs to review and propose amendments to the RTS. The areas on which the ESAs are consulting go beyond that explicit mandate, in order to address technical issues that have emerged since SFDR came into force in March 2021 and to broaden the disclosure framework. The proposed amendments relate to the detail of the SFDR and EU taxonomy-aligned disclosures and are significant, in particular for firms that consider principal adverse impacts (PAI) on sustainability factors and whose products are promoting E or