As expected, the European Commission recently announced that the Regulatory Technical Standards (RTS) for the Sustainable Finance Disclosure Regulation (SFDR) will not come into effect until 1 January 2023. This gives asset managers a greater amount of time to prepare and provide sustainability disclosures in sales, annual reports and on their own websites, ensuring that they are in line with the forthcoming regulation.
The deadline for the mandatory reporting on Principal Adverse Impact (PAI) of investment decisions at company level has not been postponed. The collection and monitoring of PAI will still be required from 1 January 2022, as will the reporting of sustainability preferences in accordance with MiFID from 2 August 2022.
Despite the postponement of the pre-contractual reporting requirements, ESG fact sheets must be prepared in compliance with the SFDR as early as next year, as they concern Article 8 and Article 9 funds.
While the delay gives asset managers more time, the complexities and lead time of transitions means we advise firms to organise their data management and regulatory reporting early in line with the future RTS.
Our experts would be happy to further advise you on the details around these regulations.