The new Sustainable Finance Disclosure Regulation [SFDR] came into effect in March 2021. This regulation is developed to drive sustainable investment. The SFDR will have big impact on asset managers, banks and fund brokers. In the past months we have published a blog series focusing on the SFDR, the obligations, the timelines, the definitions and the indicators to help you get your head around the subject. And to ensure you are well prepared for the new regulation.

After the publication of the final Regulatory Technical Standards we have updated this and other blog posts in the series to match the new requirements. We will keep doing this in the future to stay aligned with future developments.

In this article we will focus on the timelines and the progress of the implementation. What important dates do you need to put in your calendar? 

This blog post was first published on October 21, 2020 and updated on April 13, 2021.

SFDR: What has happened and has been done until now?

In the past years the awareness for sustainable business has grown, leading directly to new initiatives and regulations. We clearly see a shift from a more generic approach to more specific directives and regulations. Amongst them is the SFDR. What steps have been taken so far?

  • October 22, 2014: The EU has adopted directive 2014/95 which imposes requirements to (large) companies and organizations to disclose information and report on non-financials such as social and environmental aspects;
  • December 12, 2015: Paris Agreement on climate change was signed;
  • March 8, 2018: European Commission has released their action plan on Financing Sustainable Growth;
  • November 27, 2019: The EU has adopted regulation 2019/2088 (the SFDR regulation) and 2019/2089 (the CO² benchmark regulation);
  • April 23, 2020: The ESAs published a joint consultation paper seeking input from the market on the SFDR regulation. The consultation period starts;
  • June 18, 2020: The EU has adopted the Taxonomy Regulation 2020/852 which amends (parts of) the SFDR regulation; and
  • September 1, 2020: Consultation period has ended.
  • October 20, 2020: Letter sent by the European Commission to the ESA’s on the delay of the Level 2 of SFDR.
  • February 4, 2021: ESA’s publish final report and draft RTS on disclosures under SFDR.

SFDR: What is currently going on and what to expect?

The SFDR will become effective in March 2021, but includes many more important dates. To help you get your priorities right we made a timeline with all the important dates.

In October 2020, the European Commission announced that the publication of the final RTS was postponed. You’ll read more about this on our blog post explaining the implications of this postponement. In February 2021, the ESA’s have published their final report, including the draft RTS on disclosures under SFDR. This draft RTS is expected to be adopted to be the final RTS in the upcoming months.

SFDR: The adverse sustainability impacts statement (entity level)

 We’ve put all important dates in one comprehensible infographic. The blog post continues below. Herewith we assume that the draft RTS as presented in February 2021 by the ESA’s will be adopted as the final RTS.

SFDR timelines | Sustainable Finance Disclosure Regulation
  • March 10, 2021: Effective date of the SFDR regulation. Financial Market Participants [FMPs] and Financial Advisers [FAs] can start considering principal adverse impacts;
  • June 30, 2021: Latest date by which FMPs and FAs (with more than 500 employees on group level) must start considering principal adverse impacts.
  • January 1, 2022: First reference period starts in relation to the indicators of various disclosures, whereas the Adverse Sustainability Impacts Statement.
  • December 31, 2022: First reference period ends;
  • January 1, 2023: Second reference period starts
  • June 30, 2023: The final date on which FMPs and FAs need to report for the first time, through the Adverse Sustainability Impacts Statement and other forms of disclosures under SFDR, their performance on entity level on various ESG indicators accompanied with textual explanations and commentaries;
  • December 31, 2023: Second reference period ends
  • June 30, 2024: The final date by which FMPs and FAs need to report for the second time. In addition from this moment onwards they’ll need to make a comparison between the first and second reference period.

SFDR: Disclosure obligations on product level

In the above timelines we’ve focused on the Adverse Sustainability Impacts Statement. This disclosure on entity level needs to be published by both FMPs and FAs with more than 500 employees on group level or when considering adverse sustainability impacts in their investment decisions and/or advice. Under SFDR, FMPs and FAs also need to disclose information in pre-contractual disclosures (for example via a prospectus document) and in periodic reports (for example via the annual report). Templates for these disclosures are provided in the final report of the ESA’s which includes the draft RTS. Annexes II and III provide a template for pre-contractual disclosure for article 8 and 9 products. Annexes IV and V provide a template to disclose information in periodic reports for article 8 and 9 products.

FMPs, or better said, producers of financial products that are described under article 8(1), 9(1), 9(2) and/or 9(3) of the SFDR regulation, will need to report via various means to their clients on the sustainability impacts related to the financial product. FAs, providing investment advice which includes any of the aforementioned products will need to ensure they make the product related disclosures (as published by the FMPs) available to their clients.


Article 8(1) products: 
Financial products that are promoting environmental or social characteristics
Article 9(1), 9(2) and/or 9(3) products: 
Financial products with a sustainable investment objective

Financial products covered under this regulation:
- portfolio management;
- an alternative investment fund (AIF);
- an IBIP;
- a pension product;
- a pension scheme;
- a UCITS; or
- a PEPP.

Product level disclosure obligations

The ESA’s have provided, through their final report and draft RTS a set of templates to disclose information under SFDR. On the product level the following disclosure obligations can be distinguished:

  • Pre-contractual disclosure for financial products: templates are provided in Annexes II and III in the final report of the ESA’s and the draft RTS. Article 6(3) of the regulation provides a list, per type of FMP, in which type of pre-contractual disclosure an FMP needs to disclose information.  In addition, the Taxonomy Regulation will impose additional pre-contractual disclosure obligations.
  • Product website disclosure: the final report and draft RTS provides details on the content and the presentation of information on product level on the website of the FMPs. These disclosures must be published in a separate section ‘Sustainability-related disclosures’ in the same part of the FMPs website where other information relating to the financial product is published.
  • Product disclosure in periodic reports: templates are provided in Annexes IV and V in the final report of the ESA’s and the draft RTS. Article 11(2) of the regulation provides a list, per type of FMP, in which type of periodic report an FMP needs to disclose information.  In addition, the Taxonomy Regulation will impose additional obligations relating to disclosing information in periodic reports.

In our next blog post we’ll focus on definitions and stakeholders involved, the FMPs and FAs and the reporting obligations as imposed by the SFDR regulation.

In the meanwhile: we like to hear your thoughts and concerns in relation to the SFDR as well as the Taxonomy Regulation. Please share them with us and let’s get in touch! You can reach me via LinkedIn or send me an e-mail at colin.prins@biqh.com.

If you have any questions about our SFDR solutions or fund data flows, please contact:

Ferdie Daanen | Director of Business Development | BIQHFerdie Daanen
ferdie.daanen@biqh.com
+31 (0)6 1455 8103

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