On 25 February 2021, the Joint Committee of the European Supervisory Authorities (“ESAs”) published a joint supervisory statement (“Joint Statement”) on the application of the.
Sustainable Finance Series – The Company s Perspective
Based on research provided by ECOFACT
As recently confirmed, the EU Sustainable Finance Disclosure Regulation (SFDR), becomes effective on 10 March 2021. The SFDR imposes sustainability-related disclosure requirements on financial services institutions such as banks, insurance companies, pension funds, and investment firms.[1] However, its implications go beyond the financial sector. This summary discusses how the SFDR will impact the real economy.
KEY TAKEAWAYS
The SFDR is expected to further shift market appetite towards sustainability-minded companies in their capacities as investees, borrowers, and issuers.
The application of the SFDR will influence businesses’ capital-raising activities. Companies that are prepared and aligned with the SFDR’s requirements will have a competitive advantage in the corporate finance market.
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The European Supervisory Authorities (ESAs) have published a Supervisory Statement to clarify the application of the Sustainable Finance Disclosure Regulation (SFDR)
1 in anticipation of the requirements applying in the European Economic Area (EEA) from 10 March 2021. The Supervisory Statement does not impose new requirements on financial market participants and advisers, but confirms the industry approach to using the draft Regulatory Technical Standards (RTS) as a reference point in their compliance efforts for the 10 March 2021 deadline.
The RTS implement the more detailed requirements of the SFDR through secondary rules, which, due to the disruption caused by COVID-19, will not be finalised by 10 March 2021, as originally intended.
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(BRUSSELS) - New rules on sustainable finance disclosure, aimed at strengthening and improving how sustainability related information is disclosed in the financial sector, came into force in the EU on Wednesday.
The Sustainable Finance Disclosure Regulation (SFDR), seen as a cornerstone of the EÚ Commission s Action Plan on Sustainable Finance, aims to trigger changes in behavioural patterns in the financial sector, discouraging greenwashing, and promoting responsible and sustainable investments.
The SFDR will set common EU rules on: i) how financial product manufacturers and financial advisers should inform end-investors about sustainability risks, ii) how the impact of investments on the environment and society should be disclosed, and iii) how financial products that are marketed as sustainability-related actually meet that ambition.
DB pension transfer redress: FCA statement on RPI changes
The FCA has published a statement about its intention to amend, in mid-March 2021, its finalised guidance (FG17/9) for firms on how to calculate redress for unsuitable defined benefit (DB) pension transfers. It is making the amendments to reflect changes to the way that the Retail Prices Index (RPI) inflation measure is calculated, which the government announced in its November 2020 Spending Review. These changes are due to take effect from February 2030.
The FCA explains that the finalised guidance refers to both the RPI and the Consumer Prices Index (CPI), an alternative inflation measure. The RPI change means that, from February 2030, the -1% adjustment to the RPI assumption used in the guidance to calculate the CPI assumption will not reflect the assumed difference between the RPI and the CPI. It will be too large, and some consumers may not receive the correct amount of redress. This will affect consumers who transfer