Regulation on disclosures related to sustainability in financial services (SFDR)

Regulation of the European Parliament and of the Council on disclosure of information related to sustainable development in the financial services sector

The Regulation defines the important concepts needed to qualify activities undertaken as sustainable (among others, sustainable investment and sustainability factors), and is one of the basic pillars, along with the provisions of Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on establishing a framework to facilitate sustainable investment (the “EU Taxonomy“), for financial market players, mainly banks, insurance companies and investment firms, to comply with sustainability requirements. The core subject of the regulation’s regulations are transparency obligations for the introduction of sustainability risks and consideration of adverse sustainability impacts by financial market participants and financial advisors.

MEETING TRANSPARENCY REQUIREMENTS TAKES PLACE AT SEVERAL LEVELS:
AT THE PRE-CONTRACTUAL STAGE
AT THE LEVEL OF ENTITY AND PRODUCT DISCLOSURES
ON THE WEBSITE AND IN PERIODIC REPORTS

Regulation on Sustainability Disclosures in Financial Services, SFDR