In February, European regulators (ESAs) published their final proposed regulations to further flesh out the Sustainable Finance Disclosure Regulation (SFDR), known as Regulatory Technical Standards (SFDR RTS). In recent months, we have taken you each month through a single part of this SFDR RTS: in February we discussed the do-no significant -harm principle, in March we covered the principal adverse impacts on sustainability factors, and in April we discussed the pre-contractual disclosure requirements.
This time we address the website requirements, as the SFDR RTS has extensive requirements in this regard as well.
Product information on the website must include (additional) details for products categorized as light green (Article 8 SFDR) and dark green (Article 9 SFDR). The SFDR RTS specifies where and what information you need to publish on the website. Moreover, the SFDR RTS includes a list of items that are to be disclosed on that website.
You should publish this information on a separate sub-section of the product page of the website, named “Sustainability-related information”.
When publishing this information, you should consider the following aspects:
The SFDR RTS specifies in detail what information needs to be disclosed. It includes information on how the product will achieve its sustainable objectives or sustainable characteristics and how you monitor whether these are met. In addition, you must indicate what portion of the product invests in sustainable investments. For example, you must also provide information on engagement activities performed.
Sounds familiar? Indeed. Some of this information is also included the precontractual information. To meet the website requirements, you can reuse the information you have already collected for the pre-contractual product information.
Sounds easy, right? Unfortunately, you cannot simply copy paste the precontractual product information onto the website. While the website requirements have many similarities to the precontractual information, there are also additional requirements that are – so it seems – randomly placed between them. And (partly) because of this, the order and content of the website requirements is not completely the same as the precontractual product information. So simply duplicating the precontractual product information is not an option.
However, there is also good news. The foregoing does not mean that you cannot use the copy paste button at all. In fact, you will have to in order to be consistent. You just need to be very careful in doing so. How should you do that?
These differences become visible when composing a a table that you organize as follows: you list the website obligations as listed in the SFDR RTS, called “website obligations. One under the other, and at sub-level. On the left side you add the requirements from the precontractual product information that corresponds with the website requirement.
Once you have finished that exercise, you can assess whether you have collected (or are collecting) the information you need to publish on the website through another SFDR requirement, for example, the statement of adverse impacts on sustainability factors (Consideration Statement) or the upcoming reporting requirements for light green and dark green products. You can add this to the right side of the table; one column for Consideration Statement and one for reporting obligations. The remaining requirements in the website column are stand-alone additional website requirements.
Of course, creating such a table is not mandatory. However, it does help you reuse the multitude of information you need to publish, identify cross-links between the various transparency requirements and ensure consistency. In addition, such a table will also be a more than welcome overview to process and update all publication requirements in the future, when changes in product information occur, for example.
Do you have questions in response to the above information? Or could you use support in identifying or implementing (upcoming) ESG regulations, such as the SFDR? We would be happy to tell you more about ESG regulations for the financial sector, and their impact on your company. Read more about our help with ESG compliance, or contact us.
