The three European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) have today published a Consultation Paper with amendments to the Delegated Regulation of the Sustainable Finance Disclosure Regulation (SFDR).

The ESAs are proposing changes to the disclosure framework to address issues that have emerged since the introduction of SFDR. The authorities seek feedback on the amendments that envisage:

extending the list of universal social indicators for the disclosure of the principal adverse impacts of investment decisions on the environment and society, such as earnings from non-cooperative tax jurisdictions or interference in the formation of trade unions;
refining the content of other indicators for adverse impacts and their respective definitions, applicable methodologies, formulae for calculation as well as the presentation of the share of information derived directly from investee companies, sovereigns, supranationals or real estate assets; and
adding product disclosures regarding decarbonisation targets, including intermediate targets, the level of ambition and how the target will be achieved.
Moreover, the ESAs propose further technical revisions to the SFDR Delegated Regulation by:

improving the disclosures on how sustainable investments “do not significantly harm” the environment and society;
simplifying pre-contractual and periodic disclosure templates for financial products; and
making other technical adjustments concerning, among others, the treatment of derivatives, the definition of equivalent information, and provisions for financial products with underlying investment options.