The European financial sector was the first to implement hard and fast rules in respect of ESG, with the introduction of the Sustainable Finance Disclosure Regulation (SFDR) and the Taxonomy Regulation.
For financial institutions, specific requirements therefore apply in addition to the general ESG topics. ESG transparency requirements will continue to develop and are there to stay. SFDR and Taxonomy will become core to documentation for financial products.
It is not only transparence. The EU, Dutch and Belgian financial regulators have put climate risk related supervision at the top of their agenda, also leading to the inclusion of ESG and climate risk topics in ongoing, governance and prudential supervision.
How we can help you:
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ESG disclosures - SFDR, Taxonomy and CSRD
Since the SFDR introduction in 2021, we assist investment fund managers, asset managers, insurers, pension funds and financial advisors with their ESG-disclosures. In 2022 respectively 2023, the Taxonomy Regulation and the Delegated Regulation under the SFDR entered into force. As of 2024, further ESG-disclosure requirements will become applicable under the CSRD. We help our clients stay up to date with the developing regulations (including the CSDDD) and prepare the relevant disclosures.
Our team of experts will:
- Draft and review SFDR disclosures such as product documentation, fund prospectus and Principal Adverse Impact (PAI) statements
- Advise on and draft periodic reports under SFDR
- Advise on, draft and review ESG-disclosures in the annual account statements
- Assist in the integration of ESG preferences in KYC processes under the Financial Instruments
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Regulatory enforcement
The European Central Bank (ECB) and the local prudential authorities have urged banks, insurers and pension funds to make swift improvements in translating their ESG strategy into the business operations. Failing clear results, the regulators will likely resort to more formal regulatory actions. The Dutch AFM and the Belgian FSMA have similar expectations, but also look at ESG disclosures and potential greenwashing in general. The 2022/2023 European Consultation on Greenwashing will likely trigger regulatory enforcement and product assessments and investigations.
Our team of experts will:
- Assist in the implementation of ECB/EBA and local regulators expectations
- Share knowledge in ESG expert sessions for C-level executives and tailored sessions
- Advise board members on ESG-related requirements and regulatory screening processes
- Assist in updating and drafting the internal governance documentation
- Perform regulatory surveys – how to respond to ESG-related information requests from the regulators
- Handle regulatory enforcement matters – how to respond to potential enforcement action in case of an alleged breach of ESG rules
