Sustainable Finance disclosure regulation (SFDR) fundamentals

Sustainable Finance Disclosure Regulation ("SFDR") is an important milestone in the EU Commission's action plan on sustainable finance. This regulation aims to provide greater transparency on the degree of sustainability of financial products in order to channel investment flows towards truly sustainable investments while preventing greenwashing.

Now that level 2 SFDR has entered into force as of 1 January 2023, financial market participants must disclose sustainability related information in pre-contractual documents (i.e. prospectuses for investment funds), on websites and in periodic reports (i.e. the annual reports for investment funds).

The extent and the type of disclosure depends mainly on whether the financial product follows the regime of article 8 or 9 of SFDR, while provisions linked to PAIs-related (Principal Adverse Impact) disclosures also apply to the so-called article 6 products. Different SFDR annexes must be used according to the type of disclosure.

By the end of this course, participants will gain a comprehensive understanding of the SFDR framework and its requirements at entity and product level, namely on the timeline and scope of application, the difference between article 8, article 8+ and article 9 disclosures, the different annexes to be used depending on the type of disclosure and the questions to be answered.

• Objective, timeline and scope of the SFDR
• Key concepts: sustainable investment, sustainable risks, sustainable objectives, adverse impacts on sustainability factors
• Financial product classification (article 8, 8+, 9 and 6) and key periodic disclosures per classification
• Principal Adverse Impacts - different uses (entity versus product level, DNSH, for sustainability factors)
• Overview of the EU taxonomy framework
• High level overview of recent regulatory updates

This training is coordinated by Kenny Panjanaden and Geoffroy Marcassoli, Partners at PwC Luxembourg.

Kenny is an Assurance partner specialised in ESG and sustainable finance. He is working within the ESG Assurance practice of the firm on top of leading the internal TCFD (Task Force on Climate-related Financial Disclosures) working group.

On this topic, he has led several discussions with various stakeholders (regulator, government, all industry associations and players from different industries) in a bid to create awareness in the Luxembourgish market place as one of the pioneers in the early days of the task force.

Kenny is also a member of the LuxFLAG ESG Label Eligibility Committee, responsible for the attribution of labels to sustainable funds.

Geoffroy is an Assurance partner specialised in ESG and sustainable finance. He is leading PwC Luxembourg ESG assurance practice as well the PwC EMEA ESG working group for asset management. He is also an active member in a number of industry working groups on sustainable finance including EFAMA, Invest Europe, ALFI and the LPEA.

He developed his knowledge and expertise of sustainable finance through a wide range of engagements including but not limited to regulatory gap assessment, assurance reviews of sustainability report and ESG KPIs across all asset classes.

In addition to his sustainable finance and ESG responsibilities, Geoffroy is also responsible for the audit of mutual funds, hedge funds and private equity funds for global asset managers across various investments strategies.