The ESA have amended the March Taxonomy RTS to make it clear that there are certain subsets of financial products that promote environmental or social characteristics ( Article 8 Products) or that have sustainable investment as their objective ( Article 9 Products).Īrticle 8 Products can accordingly be categorised follows: The October Taxonomy RTS cover the content and presentation of the additional information to the SFDR product disclosures where the product makes sustainable investments that contribute to an environmental objective. Disclosure of the environmental objectives contributed to This six-month delay is in line with what the ESAs suggested in their letter dated 8 July 2021. The date of application of the October RTS is stated as 1 January 2022, however, the ESAs have noted that the EU Commission is expected to adopt the single RTS instrument with an application date of 1 July 2022. The EU Commission has informed the European Parliament and Council that it intends to incorporate all the SFDR RTS, meaning the SFDR RTS submitted to the EU Commission in February 2021 as well as the October Taxonomy RTS, in one instrument. The EU Commission will scrutinise the October Taxonomy RTS and decide whether to endorse them within three (3) months of their publication. 4 In this OnPoint, we will provide an overview of the main changes that the October Taxonomy RTS introduced as compared to the original proposals set out in the March Taxonomy RTS. On 22 October 2021, the ESAs published their final report on the Draft Taxonomy RTS (the October Taxonomy RTS). The ESAs’ aim is to have the RTS on disclosures rules function as a “single rulebook” for sustainability disclosures at Level 2 for both the original empowerments in SFDR and the additional ones added by the Taxonomy Regulation. 3 The ESAs decided to amend the SFDR RTS instead of creating a new ruleset, with the aim of minimising duplication and complexity in this area.
The March Taxonomy RTS made amendments to the RTS that the ESAs published in February 2021 in respect of for the SFDR, (the SFDR RTS). On 15 March 2021, the ESAs published a consultation paper on draft regulatory technical standards regarding the content and presentation of sustainability disclosures pursuant to Article 8(4), 9(6) and 11(5) of the SFDR (the March Taxonomy RTS). The Sustainable Finance Disclosure Regulation ( SFDR) 1 empowered the European Supervisory Authorities ( ESAs) 2 to develop draft regulatory technical standards ( RTS) on taxonomy-related product disclosures.