Promoting sustainability within the financial world
In 2018, the European Commission published the EU Sustainable Finance Action Plan aimed at promoting sustainability within the financial world. These regulations are also called ESG regulations because the respective rules are based on Environmental, Social and Governance (ESG) criteria.
The Sustainable Finance Disclosure Regulation (SFDR) is part of the ESG regulation and its aim is to provide more transparency on sustainability within the financial markets in a standardised way, thus harmonising rules, ensuring comparability and preventing greenwashing.
What is SFDR?
The SFDR is the frontrunner of the set of regulations resulted from the European Action Plan for Financing Sustainable Growth. The aim is to provide more transparency on sustainability within the financial markets in a standardised way, thus harmonising rules, ensuring comparability and preventing greenwashing. SFDR regulation introduces various disclosurerelated requirements for financial institutions at entity and product level. These new disclosure obligations are applicable as of March 10th 2021.
What is the scope of SFDR?
The SFDR applies to financial institutions acting as financial market participants (banks and investment firms providing portfolio management, insurers, insurance intermediaries, asset managers, institution for occupational retirement provision (IORP), manufacturer of a pension product, pan‐European personal pension product (PEPP) provider, manager of a qualifying venture capital fund registered in accordance with Article 14 of Regulation (EU) No 345/2013 and manager of a qualifying social entrepreneurship fund registered in accordance with Article 15 of Regulation (EU) No 346/2013) operating within the EU. The regulation applies as well to financial institutions acting as financial advisors (banks, investment firms and asset managers providing investment advice, insurers and insurance intermediaries providing insurance advice).
The requirements apply to the following financial products:
- Discretionary portfolio management by credit institutions or investment firms
- Alternative investment funds (AIFs) and UCITs (investment funds)
- Insurance-based investment products (IBIPs)
- Pension products, Pension scheme and Pan-European personal pension product (PEPP).
What are the disclosure obligations?
As a result of the SFDR, financial institutions must make certain (ESG-related) sustainability information public at entity and product level. This information must be provided on the website and in the pre-contractual documentation and in addition, in a later phase, periodic information will be provided via reporting. These information obligations apply to all financial market participants and financial advisers, regardless of whether they are specifically concerned with sustainability or not.
Disclosure obligations at entity level
Policy del Gruppo BPER in tema di Sostenibilità
Disclosure obligations at products level