Service Description

SFDR Sustainable Finance Disclosure Regulation The Sustainable Finance Disclosure Regulation (SFDR) imposes mandatory ESG disclosure obligations for asset managers and other financial markets participants with substantive provisions of the regulation effective from 10 March 2021. The Sustainable Finance Disclosure Regulation (SFDR) mandates ESG disclosure requirements for asset managers and other participants in financial markets. Introduced by the European Commission, the SFDR, alongside the Taxonomy Regulation and the Low Carbon Benchmarks Regulation, constitutes a series of legislative measures stemming from the European Commission's Sustainable Finance Action Plan. Who reports? The regulation extends to all financial market participants (FMPs) and financial advisors (FAs) operating within the EU, including those with EU shareholders and those marketing themselves within the EU FMPs encompass various entities such as insurance companies offering insurance- based investment products, investment firms providing portfolio management services, institutions managing retirement provisions, manufacturers of pension products, alternative investment fund managers, providers of pan-European personal pension products, managers of qualifying venture capital and social entrepreneurship funds, management companies for UCITS, and credit institutions offering portfolio management services. What is reported? The SFDR disclosure requirements are categorized into three segments: 1 Disclosure of Adverse impacts on Sustainability Fadors from Investment Decisions Firms obligated under SFDR must reveal the potential adverse effects that investment decisions may have on sustainability factors and detail their efforts to mitigate these impacts 2 Integration of Sustainability (ESG) Risk into Investment Processes Firms are required to disclose instances where environmental, social, or governance (ESG) events could negatively affect significant investments and align their remuneration policies with the management of sustainability risks. 3 Provision of Sustainability Information for Financial Products Benefits Combats greenwashing and exaggeration of environmentally friendly claims Prioritizes ESG risks in investment processes Addresses gaps in mandatory rules for ESGdisclosure. Instigates a behavioral shift in financial market participan Additional disclosures are necessary for financial products categorised as Article 8 or Article 9 products, as defined by SFDR