Sustainable finance

The three European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) today published a statement providing clarifications on the draft regulatory technical standards (RTS) issued under the Sustainable Finance Disclosure Regulation (SFDR), which include the financial product disclosures under the Taxonomy Regulation.

Today’s statement provides clarification on key areas of the SFDR disclosures, including:

  • use of sustainability indicators;
  • principal adverse impact (PAI) disclosures;
  • financial product disclosures;
  • direct and indirect investments;
  • taxonomy-related financial product disclosures;
  • “do not significantly harm” (DNSH) disclosures; and
  • disclosures for products with investment options

The statement is part of the ESAs’ on-going efforts to promote a better understanding of the disclosures required under the technical standards of the SFDR ahead of the planned application of the rules on 1 January 2023, as laid out in the Delegated Regulation adopted by the European Commission on 6 April 2022.

Next steps

The ESAs will continue to promote a better understanding of the RTS as adopted in the Delegated Regulation under the SFDR through practical application Q&As, after the publication of the Delegated Regulation in the Official Journal.

The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, today publishes a Supervisory Briefing to ensure convergence across the European Union (EU) in the supervision of investment funds with sustainability features, and in combating greenwashing by investment funds.

This work will help combat greenwashing by establishing common supervisory criteria for National Competent Authorities (NCAs), to effectively supervise investment funds with sustainability features.

This briefing covers the following areas:

  • Guidance for the supervision of fund documentation and marketing material, as well as guiding principles on the use of sustainability-related terms in funds’ names; and
  • Guidance for convergent supervision of the integration of sustainability risks by AIFMs and UCITS managers

Today’s publication is part of the actions to implement ESMA’s Sustainable Finance Roadmap, namely the consistent implementation of new requirements applicable to asset managers by developing new supervisory briefing(s).

Next steps

ESMA will work closely with NCAs to combat greenwashing, by promoting further supervisory convergence in supervising investment funds with sustainability features. This may include updating the supervisory briefing if needed considering experiences after the SFDR RTS starts applying on 1 January 2023.

Further information:

Solveig Kleiveland

Senior Communications Officer

   +33 (0)1 58 36 43 27



The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has published a study looking at the potential reasons behind the relatively lower ongoing costs, and better performance, of environmental, social and governance (ESG) funds compared to other funds, between April 2019 and September 2021.

ESMA recently determined that ESG equity undertakings for collective investment in transferable securities (UCITS), excluding exchange-traded funds, were cheaper and better performers in 2019 and 2020 compared to non-ESG peers.

Understanding the cost and performance dynamics of ESG funds is of particular interest as it may bring insights for the overall fund industry on how to make funds more affordable and profitable for retail investors.

ESMA, in today’s article, is looking at some of the potential drivers behind this relative cheapness, and outperformance, of ESG funds, and finds several differences between the two categories of funds:

  • ESG funds are more oriented towards large cap stocks;
  • ESG funds are more oriented towards developed economies; and
  • The sectoral exposures also differ between ESG and non-ESG funds.

Even after controlling for these differences, ESG funds remain statistically cheaper and better performing than non-ESG peers. Further research is thus needed to identify the other factors driving these cost and performance differences.

Further information:

Solveig Kleiveland
Senior Communications Officer
Tel: +33 (0)1 58 36 43 27