Analysis of information requirements under Sustainable Finance Disclosure Regulation

Abstract

Nowadays one of the biggest concerns is an ecological crisis and human actions impact on the planet. National authorities around the world reacted to this emergency by issuing new regulations which could help to control and stimulate corporations and institutions to be more responsible for its adverse impact on sustainable development. In 2018 the EU in line with the Paris Agreement has developed the Action Plan on Sustainable Finance which includes a new Sustainable Finance Disclosure Regulation (SFDR) 2019/2088 aimed to improve transparency in the financial market and to redirect capital to sustainable product investments. One of the main goals of the SFDR is to prevent greenwashing and provide final investors with clear and sufficient information concerning sustainability risks. Nevertheless, application of level 1 of the SFDR has created a misunderstanding between financial market participants due to its broad formulation. Different interpretations of the Regulation led to distinct approaches used by managers in fund classification. This problem should be solved when the level 2 of the SFDR will come into force and financial market participants must comply with RTS issued by ESAs. This thesis discusses development of the Regulation and presents an analysis of the RTS pre-contractual and periodic disclosures concerning Articles 8 and 9 funds. The research's main objective is to explore legislation’s work at second level and clarifications provided by the RTS on the SFDR.