The European Commission intends to push back the applicability date for new sustainability-related disclosure rules following requests for more time for implementation from parts of the investment industry.
The move was revealed by BVI, the German fund management industry body, which said the Commission wanted to separate the entry into force of the provisions of the sustainable finance disclosures regulation (SFDR) from the upcoming technical regulatory details.
As a result, the principles-based requirements set out in the SFDR text itself would continue to kick in on 10 March 2021, while the so-called regulatory technical standards with the detailed requirements will enter into force at a later date – the BVI said probably from the beginning of 2022.
BVI, which is one of several industry associations to have expressed concerns about the implementation timeline for the investor disclosure rules, said the Commission’s approach was “pragmatic”.
“The statements of the European Commission enable fund companies to meet their future sustainability obligations without having to change the politically fixed start date of the SFDR,” said Thomas Richter, BVI’s CEO. “They also prevent a threatened stop in sales of sustainable funds.”
Without the timeline change, investment managers, pension funds and other ”financial market participants” would have had to comply with detailed disclosure requirements from the March 2021 entry-into-force date for the SFDR. However, the rules setting out the detailed requirements are still being finalised by the European Supervisory Authorities (ESAs), with talk of these being ready by the end of January 2021.
The ESAs have also called on the Commission to delay implementation. A consultation on the draft rules was extended until the beginning of September as a result of the coronavirus pandemic, and later that month the ESAs launched a survey on presentational aspects of mandatory templates to be used in connection with SFDR rules. The templates survey runs until 16 October.
According to the Commission, the SFDR is intended to contribute to the goal of making it easier to identify adverse impacts of investments on sustainability, ensure credibility of sustainable investments, and increase the awareness about sustainability risks.
The Commission has not made a public statement in connection with the timetable change.