On 25 July 2024, the European Supervisory Authorities issued an updated version of its consolidated questions and answers on the SFDR and the SFDR Delegated Regulation.

The ESAs have added answers to a number of new questions including:

  • For financial products falling under Article 8 or 9 SFDR, where the financial market participant making available those products is a registered AIFM which has not set up a website, must that registered AIFM establish a website in order to comply with Article 10 of SFDR and Chapter IV of the SFDR Delegated Regulation for those financial products
  • Can a financial market participant rely on disclosures under Article 6(1) second sub-paragraph of the SFDR (which allow financial market participants to disclose in pre-contractual disclosures that it “deems sustainability risks not to be relevant” for its investment decisions) in order to disapply other obligations on taking into account sustainability risks in EU law, such as Article 18(5) of Commission Delegated Regulation (EU) No 231/2013 which requires Alternative Investment Fund Managers to take into account sustainability risks when complying with their due diligence obligations?
  • As regards Article 4(4) of Regulation 2019/2088, must the calculation of the 500-employee threshold to the parent undertaking of a large group be applied to both EU and non-EU entities of the group without distinction as to the place of establishment of the group and/or subsidiary and does the due diligence statement include impacts of the parent only or must it include the impacts of the group at a consolidated level?
  • Should PAI indicator 4 in Table 1, Annex I of the SFDR Delegated Regulation (“Exposure to companies active in the fossil fuel sector”) be calculated on a look-through (i.e., share of fossil fuel activities) or pass/fail (i.e., whole company active within the fossil fuel sector) basis? I.e., is there a threshold level of fossil fuel related economic activity required before a company becomes “active in the fossil fuel sector” or is any activity sufficient to make a company “active in the fossil fuel sector”?
  • How should values in currencies other than EUR be converted to EUR? E.g., at the point of reporting, the point of the impact or an average value in EUR of values in currencies converted to EUR at different reference points over the entire reference period.
  • Can a sustainable investment pursuant to Article 2(17) SFDR also be made by investing in another financial product, e.g., a UCITS fund?