The European Commission is delaying the upcoming deadline under its ESG disclosure regulation by six months to help managers, consultants and supervisors with a smoother adoption of the new requirements.
The deadline to implement some of the requirements of the Sustainable Finance Disclosure Regulation will be postponed until July 1, 2022, from the previous deadline of Jan. 1, 2022, according to a source close to the commission, which said that it was "necessary" to extend it due to the length and technical detail of the new standards.
SFDR, some of which has been in effect since March this year, means that money managers are required to assess and disclose to their investors the environmental, social and governance impact of their investment strategies.
The technical standards that will be affected by the delay relate to disclosure content and its presentation.
For example, the commission is yet to clarify how managers are going to be required to present methodologies and information in respect of certain sustainability indicators.
The regulators are also going to clarify how pre-contractual information should be disclosed to investors under Articles 8 and 9, which relate to the integration of ESG risks into mainstream investments and impact investments, respectively.