March 2021 saw Regulation (EU) 2019/2088 of the European Parliament and of the Council of November 27 2019 on disclosure of information related to environmental, social, and governance (ESG) criteria in the financial sector (SFDR) finally becoming applicable.
This regulation, issued in the context of the EU Commission’s commitment to the Sustainable Development Goals of the UN 2030 Agenda for Sustainable Development, represents a major milestone by introducing unprecedented harmonised requirements on sustainability-related disclosure in financial products to a multitude of financial market actors and advisors.
The reporting obligations in this respect apply to multiple entities, including (i) alternative investment managers, (ii) qualified private equity fund managers, (iii) pension product manufacturers and providers of pan-European individual retirement products, (iv) insurance companies and insurance intermediaries that distribute insurance-based investment products, and (v) investment firms and credit institutions that provide portfolio management and investment advice.
Such entities are classified either as financial market participants or financial advisers, depending on their role in the conception, governance, provision and/or placement of the financial products, such classification then impacting their respective duties in terms of ESG disclosure.
