On 17 March 2021, the three European Supervisory Authorities (ESAs) issued a consultation paper on draft regulatory technical standards (RTS) regarding disclosures of financial products investing in economic activities that contribute to an environmental investment objective.

The Taxonomy Regulation empowers the ESAs, by amending the Regulation on sustainability-related disclosures in the financial sector (SFDR), to develop further RTS on “taxonomy-related product disclosures”. The deadline for the taxonomy-related product disclosures RTS range from 1 June 2021 to 1 June 2022.

The proposed draft RTS aim to:

  • Facilitate disclosures to end investors regarding the investments of financial products in environmentally sustainable activities.
  • Create a single rulebook for sustainability disclosures under the SFDR and the Taxonomy Regulation. This will be done by amending the draft RTS under the SFDR, to minimise overlapping or duplicative requirements between the two regulations.

The consultation paper includes additional taxonomy-related disclosures that concern information about which environmental objectives the investments of the product contribute to, and information about how, and to what extent, the activities funded by the product are taxonomy-aligned.

The ESAs have included, for illustrative purposes, a draft set of consolidated SFDR RTS as an annex to the consultation paper, to show what the changed RTS would look like as amended by the changes proposed by the ESAs. This text is purely for illustrative purposes and has no legal effect. The ESAs do not assume any liability for its contents.

The closing date for responses to the consultation paper is 12 May 2021. Following the consultation period, the draft RTS will be finalised and submitted to the European Commission. A consumer testing exercise on the amended templates will be conducted in April in the Netherlands and in Poland.