Over a year ago, on December 29, 2019, the Sustainable Finance Disclosure Regulation entered into force. Just a few months remain before key provisions begin to apply and asset/fund managers and other financial services firms should not delay in preparing for new disclosure requirements.
The SFDR requires European financial firms to consider how sustainability risks are incorporated into their investment decision-making processes, and the extent to which their financial sector remuneration practices are consistent with sustainability concerns. In short, manufacturers of financial products and financial advisers need to consider and adapt how they operate their business before they can make the disclosures required under the SFDR.
This alert memorandum provides an overview of the SFDR (including as to status, scope and conceptual and technical framework), explores the upcoming regulatory implications of this initiative for European financial sector firms, and provides a comparative analysis of similar regulatory developments in other jurisdictions.