The Disclosure Regulation is linked to multiple regulations and standards.
The SFDR regulation suffers from a lack of clarity in its articulation with the European and national regulatory framework and from the risks of ESG-washing.
1. The Taxonomy Regulation
In addition to deciphering and appropriating the Disclosure Regulation, companies in the financial sector are also subject to the Taxonomy Regulation since the beginning of 2022. Fund managers will therefore not only have to comply with the provisions of the Taxonomy Regulation but also with the disclosure requirements of the SFDR Regulation on the taxonomy alignment of their Article 8 Plus and Article 9 funds. Despite some clarifications in the European Commission and ESAs’ FAQs, market participants deplore the confusing nature of the articulation of the regulatory initiatives of the Sustainable Finance Action Plan.
2. The French Energy and Climate Law
In France, the law on energy and climate enacted in 2019 and its implementing decree reinforce the transparency obligations of the Article 173 report and go even further than those imposed by the SFDR. Thus, French financial sector actors must add to the sustainability risk policy required by Disclosure a point on the risks associated with climate change and biodiversity.
3. The doctrine on investor information
Similarly, the doctrine on investor information published by the Autorité des marchés financiers (AMF) in March 2020 requires any fund mentioning ESG in its marketing documentation, regulatory documentation or name to comply with precise criteria and measurable and significant objectives. The AMF identifies three types of ESG approaches: “significant commitment in management”, “non significant commitment in management” and “other approaches”. These categories are more prescriptive in some respects, but do not correspond to the Article 6, Article 8 and Article 9 classifications of the Disclosure Regulation.