An update on sustainable finance

Recent events in sustainable finance of relevance for your business

2021 has been an eventful year for sustainable finance. We have summarised a few recent events of relevance for your business.

On 10 March 2021 the Disclosure Regulation (SFDR) entered into force. The SFDR requires financial market participants and financial advisers in the EU to disclose information about how sustainability risks are integrated into their investment decision processes, with particular requirements for products that “promote environmental or social characteristics” or have “sustainable investment” as its objective. The SFDR has created debate inter alia on how to interpret certain specific disclosure requirements and questions regarding the classification of financial products, e.g. how the SFDR applies to legacy funds and the threshold for a product to qualify as “promoting environmental or social characteristics”. The European Commission as well as the Swedish Financial Supervisory Authority are expected to publish clarifying guidance regarding a number of remaining uncertainties during the year. Further requirements set out in the SFDR will enter into force in 2022.
The Taxonomy Regulation is the other significant sustainable finance regulation that has been adopted, however, it has not yet entered into force. The Taxonomy Regulation contains additional disclosure requirements but mainly stipulates a legal definition of what constitutes an “environmentally sustainable economic activity” based on six environmental objectives. The Taxonomy Regulation includes technical screening criteria to measure against the environmental objectives. The final draft of screening criteria for environmental objectives “climate change mitigation” and “climate change adaption” was published as part of the “21 April sustainable finance package”.
The “21 April sustainable finance package” included many different news of interest for sustainable finance. One of the new legislative proposals was the draft Corporate Sustainability Reporting Directive (CSRD) proposed to replace the Non-Financial Reporting Directive. The draft CSRD inter alia proposes a mandatory European standard for sustainability reporting and expands the scope of the report to include governance and intellectual property. Our next Business and Human Rights Update will cover the CSRD in further detail. The Business and Human Rights Update will be available on Mannheimer Swartling’s LinkedIn page and website from Monday 3 May.

If you have questions or want to discuss any of these issues, you can always reach out to your existing contacts at the firm. You are also welcome to contact the members of our Corporate Sustainability and Risk Management team or our Financial Regulation team, some of whom are listed at the bottom of this page.

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Contact

Carl Johan Zimdahl, partner, Financial Regulation
Stephanie Leisnert, senior associate, Corporate Sustainability and Risk Management
Lisa Ejelöv, associate, Corporate Sustainability and Risk Management

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