ESAs Seek To Clarify Draft Regulatory Technical Standards Under The SFDR

Detailed regulatory technical standards ("RTS") under the Sustainable Finance Disclosure Regulation ("SFDR") are expected to apply from 1 January 2023. Following "numerous requests for clarifications received from stakeholders and national competent authorities", on 2 June 2022, the European Supervisory Authorities ("ESAs") published "Clarifications on the ESAs' draft RTS under SFDR".

The key areas addressed by the ESAs¹ include the following:

• disclosure of principal adverse impacts ("PAI") of investment decisions on sustainability factors, including:
  • uses of "sustainability indicators";
  • PAI calculation methodology;
  • look through approach and investment instrument scope for PAI disclosures;