On 30 June 2025, the European Securities and Markets Authority (ESMA) issued a Final Report following a Common Supervisory Action (CSA) with Member State competent authorities (NCA) on the integration of sustainability risks and disclosures in the investment fund sector.

Background

The purpose of the CSA was to assess, foster and enforce the compliance of supervised entities with the:

• Provisions introduced by the Alternative Investment Fund Managers Directive and UCITS Directive implementing measures on the integration of sustainability risks.
• Current regulatory framework under the Sustainable Finance Disclosure Regulation (SFDR), including the financial product disclosure of the share of taxonomy-aligned investments stemming from the Taxonomy Regulation, and related SFDR implementing measures.
• Adherence to the principles of the ESMA Supervisory briefing on sustainably risks and disclosures in the area of investment management.

Key finding

The key finding from the CSA is that ESMA has found that there is room for improvement in the level of managers’ compliance with the framework on the integration of sustainability risks and disclosures. While the majority of NCAs considered that there was an overall satisfactory level of compliance of managers with the applicable regulatory requirements, they nonetheless found several vulnerabilities, which were addressed as part of the process, through bilateral letters and other supervisory orders.

Next steps

Building on the findings of the CSA exercise, ESMA will continue exchanging and cooperating with NCAs on this topic and related follow-up actions.

ESMA will facilitate discussions among NCAs to foster a common supervisory culture across the EU and to promote effective, sound and consistent supervision with regard to the integration of sustainability risks and disclosures.