On 15 January 2021, the Joint Committee of the European Supervisory Authorities (ESAs) published a letter it had sent to the European Commission concerning priority issues relating to the draft regulatory technical standards (RTS) under Regulation 2019/2088 on sustainability-related disclosures in the financial services sector (SFDR). The letter reports that areas of uncertainty have been flagged by stakeholders during the consultation process relating to the draft RTS, including during the public hearing organised by the ESAs on 2 July 2020. Whilst the ESAs appreciate that some of the interpretative uncertainties of the SFDR may be clarified in due course, they have identified certain priority questions that are further set out in the annex to the letter.

The priority areas are:

• The application of SFDR to non-EU Alternative Investment Fund Managers (AIFMs) and registered AIFMs.
• Application of the 500-employee threshold for principal adverse impact reporting on parent undertakings of a large group.
• The meaning of “promotion” in the context of products promoting environmental or social characteristics.
• The application of Article 9 of the SFDR.
• The application of SFDR product rules to portfolios and dedicated funds.