2 of 9

Last publications - Q3/2023

In December 2023 the three European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) published the Final Report on draft Regulatory Technical Standards.

In December 2023 the European Securities and Markets Authority (ESMA), the EU’s financial markets regulator and supervisor, provides an update on the status of ESMA’s guidelines on ESG and sustainability-related terms in fund names, including details on the timing of their publication.

In November 2023 ESMA published three explanatory notes relating to the EU Sustainable Finance framework.

3 of 9

Proposed amendments

The changes to the SFDR RTS in the Final Report can be grouped in the following main categories:

Changes related to the PAI framework: extension of the list of social indicators for principal adverse impacts (three mandatory and seven opt-in), modification of existing indicators and updated calculation methodology (e.g. unadjusted gender pay gap).
Changes related to the GHG emissions reduction targets (e.g. the calculation methodologies)
Changes related to the SFDR templates (simplification of the templates for pre-contractual and periodic disclosures).
DNSH disclosure design options (e.g. maintaining the status quo or inclusion of a requirement to disclose the thresholds or criteria for PAIs to determine compliance with DNSH principle).
Other notable technical adjustments (e.g. calculation of proportion of

sustainable investment)

4 of 9

PAI framework changes�Extension of the list of social indicators

*The ESAs have changed the term from ‘violation’ to ‘non-respect’ to align the terminology with the European Sustainability Reporting Standards (ESRS S1-17) and from UN Global Compact principles to UN Guiding principles.

* The ESAs have moved existing PAI 11 (Lack of processes and compliance mechanisms) from Table 1 to Table 3 as opt-in indicator. This is because feedback from first PAI statements issued in June 2023 showed that this indicator was not providing meaningful input on principal adverse impacts related to the international norms.

Source: PWC EMEA ESG Webinar (January 2024)

5 of 9

Who needs to comply?

Any financial market participant which is either:

complying with the PAI framework, and/or
Making sustainable investments, will need to immediately engage with the new rules.

This may include updating record keeping, reporting, data collection and calculation processes.

Product level disclosures:

For a financial market participant which considers and voluntarily maps across aspects of the Article 4/Annex I framework to product-level PAI, then that financial market participant may take account of the changes in the Final Report.

6 of 9

ESMA Consultation Paper on Fund‘s names

Source: PWC EMEA ESG Webinar (January 2024)

*ESG-, impact-, or sustainability-related terms in funds’ names

7 of 9

What is expected in 2024?

In March 2024 the EU Commission must decide if it will advance the SFDR RTS amendments proposed by the ESAs.

For Q2 2024 is expected the publication of the Final Report in the EU Official Journal is expected. Application is expected to be delayed until 1 January 2025.