Upcoming changes on the sustainable finance regulations and frameworks

Key takeaways

(This article was updated on September 27th, 2023.)

Asset Managers recently worked to meet two important:

1. Publish their Principal Adverse Impact (PAI) statements by June 30th
2. Update the European ESG Template (EET) files of their financial products in accordance with EET's latest version (V 1.1.1) by April 30th, 2023

Is it now finally time to mark the "sustainability reports" task as "done" for a while? Well, unfortunately, the work has just begun and the regulations and frameworks are still undergoing several changes. It means you might need to update your reports and work processes again very soon.

To give you a hand, we listed the four upcoming changes in the different European frameworks and regulations you should keep an eye for: 

Sustainable Finance Disclosure Regulation (SFDR)

Disclosures on the integration of sustainability risks and impacts within financial services and products in periodic and pre-contractual reports and on websites. 
Who is impacted: Financial market participants overall
Status (in September 2023): New Regulatory Technical Standard (RTS) is open for consultation since April 2023

EU Taxonomy

EU classification system and reporting regulation over financial flows towards environmentally sustainable activities. Asset managers and investors need to disclose the proportion of taxonomy alignment of their portfolios. 
Who is impacted: EU corporations and Financial market participants
Status (in September 2023): Technical screening criteria for objectives 3-6 is open for consultation since April 2023

Corporate Sustainability Due Diligence Directive (CSDDD)

Large companies in the European Union are required to set up due diligence practices to identify, prevent, and manage human rights impacts across the value chains. Institutional investors and asset managers need to apply measures to induce investee companies to reduce the adverse impacts of their activities.
Who is impacted: EU corporations and Financial market participants
Status (in September 2023): The final report passed the plenary in June, 2023

European ESG Template (EET)

Industry-standard Excel template in machine-readable format to harmonize and simplify the collection of ESG-related information on investment firms and their products is collected.
Who is impacted: Financial market participants and distributors
Status (in September 2023): The current EET version (V 1.1.1) will be revisited and restructured during 2023

How Datia can help

First off, you can count on Datia to keep the reports and frameworks on our platform up-to-date. After all, one of the main priorities of our technical team is to follow the development of the different European regulations related to sustainable finance.

More specifically, Datia's software can help you with: 

  • Calculation of SFDR's Principal Adverse Impact indicators at portfolio and entity levels, as well as PAI statement that can be downloaded in editable and pdf formats, in 5 different languages; 
  • EU Taxonomy alignment monitoring and reporting
  • Portfolio-level reports tracking alignment with end-clients sustainable profiles, in accordance with MiFID II
  • Due diligence of your investment's human rights policies according to frameworks such as UNGC and OECD
  • Streamlined solution to help you create European ESG Template files for each of your funds

For an overview of all the upcoming changes, download the table below: