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Freshfields Sustainability

| 3 minutes read

Freshfields Sustainable Finance Series: Disclosure – How to and what’s next?

On 10 March 2021, our Vienna office hosted the second event of Freshfields Sustainable Finance Series which covered the highly topical issue of ESG-Disclosure.

Coinciding with the entry into force of the EU Disclosures Regulation (SFDR), our team around Stephan Pachinger introduced our clients to the most recent developments and trends from a broad range of perspectives, including the corporate point of view as well as risks and requirements related to financial products.

Joined by Christiaan Smits, Head of Freshfields Regulatory and Public Affairs team in Brussels, the webinar also gave a comprehensive EU policy update to prepare clients for the major challenges that still need to be overcome.

Mathias Lehner set the scene with an outline of the underlying factors that drive the discussions on ESG disclosure, such as:

  • investors’ need for information on ESG matters to assess risks as well as the impact of the target on its environment;
  • investments with a robust sustainability management are expected to outperform their mainstream competitors;
  • political decision to put investors in the position to distinguish between good and bad investments with the aim to direct more funds towards sustainable investments.

All participants agreed that ESG disclosure indeed has become a “major concern for investors” and it is a “main topic in the political agenda”, particularly on the EU level, where it is very much “a rapidly evolving space”. 

However, there is no uniform framework in place so far, but a multitude of partly overlapping frameworks – voluntary and in more recent times also mandatory – which all need to be taken into consideration.  

Florian Klimscha walked the audience through the jungle of the different frameworks on ESG disclosure from a corporate perspective, including:

  • voluntary frameworks, such as GRI
  • mandatory disclosure under the Non-Financial Reporting Directive (NFRD) and the NFRD guidelines currently applicable to certain public interest undertakings
  • financial and prudential requirements
  • the Disclosure Regulation (SFDR) for financial market participants and investment products/advice

He also explained why corporations should not to forget about the Article 8 of the Taxonomy Regulation and the upcoming related Delegated Act, which requires undertakings to include in their Non-Financial Statement how and to what extent the activities of a business qualify as environmentally sustainable. Helpful guidance in this respect is already available in the form of an ESMA paper. The Delegated Act on Article 8 of the Taxonomy is expected to be adopted by the middle of this year. “This is one to be watched”. 

Stephan Pachinger then outlined the specific framework for product disclosure and provided detailed insights into the comprehensive requirements under the Disclosure Regulation (SFDR). He explained that this specific piece of legislation applies to specific financial products only, such as pension or insurance products, and primarily targets specific financial market participants. He also outlined potential product liability issues which must be taken into consideration when marketing a specific product and disclosing information under the SFDR.

Unsurprisingly one of the main subjects of discussion during the webinar was the fact that there is a delay in the delegating and implementing regulation (RTS) which creates a challenge for businesses to comply with the comprehensive SFDR disclosure requirements. Christiaan Smits from the public affairs team in Brussels reported that, despite criticism from industries and individual national regulators, the Commission refused to also delay the application of the main body of the Disclosure Regulation. This testifies the level of importance accorded by the EU to the topic of ESG disclosure and it makes clear that the Commission expects corporations to seriously prepare.

Christiaan Smits also provided an outlook on further policy and regulatory pieces to come, such as:

  • The legislative proposal amending the NFRD which is expected to be published on 21 April. For those who are interested in more details, the EFRAG recommendations shed some light on what we can expect.
  • A Renewed Sustainable Finance Strategy is expected to be published in June: the package will likely cover further relevant topics, such as the regulation of ESG ratings.
  • Implementation of the Taxonomy Regulation.  

In particular, the Taxonomy is an unfinished piece which definitely merits a webinar on its own, Christiaan concluded.

Listen to the webinar in full: Freshfields Sustainable Finance Series Part 2: Disclosure

If you would like to participate in our upcoming webinars, please contact:

For legal advice related to sustainable finance, please contact our team and visit our Sustainability hub.


sustainable finance, disclosure, financial services, sfdr, rts, nfrd