ESG: The ESAs’ amendments to the SFDR RTS – a client note

As we reported at the time, the European Supervisory Authorities (the ESAs) have published an important consultation paper, "Review of SFDR Delegated Regulation regarding PAI and financial product disclosures" (the CP).

The CP proposes material changes to the existing disclosures required under the SFDR Regulatory Technical Standards (RTS), which came into force on 1 January 2023. 

The proposed changes include revising the PAI indicators, new decarbonisation disclosures, enhanced DNSH disclosures, and broader amendments to the article 8/9 disclosure templates.

Firms subject to SFDR - and, in particular, to the regimes covered by the RTS - will need to engage with these proposals and their likely practical impact.

This note provides our summary of the Top 10 things that firms need to know about the CP:

1. What is covered in the CP?

2. Which firms would be subject to the changes proposed in the CP?

3. What changes are proposed to the PAI regime?

4. How does the CP approach mandatory decarbonisation disclosures?

5. What changes are proposed to the DNSH regime?

6. Will there be further changes to the Article 8 / 9 mandatory disclosure templates?

7. What does the paper say about derivatives and about short positions in calculations?

8. What other changes are proposed?

9. What does the CP not cover?

10. What are the next steps and when would this come into force?