The Ripple Effect of EU Disclosures Regulation in Financial Services Sector

Abstract

The UE Disclosure Regulation 2019/2088 of November 27, 2019 on Sustainability-related Disclosures inthe Financial Services Sector (known as the Disclosure Regulation, Environmental, Social and Governance (ESG)Regulation or SFDR for Sustainable Finance Disclosure Regulation) sets out general rules for classifying andreporting on sustainability and ESG criteria. Its goal is to improve transparency and disclosures. The transparencyrequirement concerns particular concerns, especially sustainability risks and principal adverse sustainability impactsat the financial product level. It does also concern precontractual disclosures. This Regulation is part of a broaderlegislative package under the European ’Commission’s Sustainable Finance Action Plan, such as the EU TaxonomyRegulation 2020/852 of June 18, 2020.