Following the Commision’s adoption of the Action plan on Sustainable Finance in 2018 with the aim to foster investment in sustainable projects and incorporate sustainability in financial advice, the SFDR was adopted by the European Parliament and the Council in November 2019. It aims to provide investors who seek to put their money into companies and projects focusing on sustainable development with the necessary information. Furthermore, the SFDR allows investors to assess the integration of sustainability risks into the business decision process. In April 2022, the Commission adopted a delegated act under the SFDR and mandated the European Supervisory Authorities (ESAs: EBA, EIOPA and ESMA) to review certain aspects of the operation of the delegated act, focusing, amongst other topics, on the disclosures of principal adverse impacts (PAI) of investment decisions on sustainability factors and of financial products’ decarbonisation targets. The ESAs asked to prolong the initial deadline of April 2023 by six months and published the final draft on RTS in December 2023. The Commission now has three months to decide whether to endorse the draft RTS as proposed, or to adopt it with modifications. In November 2023, ECON coordinators decided to hold a scrutiny session on the matter, to allow the European Parliament to scrutinise the developments concerning the SFDR delegated act.

Authors : GAELLE CHARLOTTE CHAILLET, VOJTĚCH STRNAD