May is a month filled with opportunities to raise awareness and take action towards protecting some of the world's most vital species. Towards the end of the month, there are three special days that we would like to highlight. World Bee Day on May 20th reminds us of the crucial role that pollinators play in maintaining healthy ecosystems and global food security. The International Day for Biological Diversity on May 22nd emphasizes the importance of preserving Earth's resources and the need for collective action to rebuild and preserve the planet's biological diversity. Finally, World Turtle Day on May 23rd raises awareness of the threats faced by turtles and tortoises and encourages human action to help them survive and thrive. These special days provide an opportunity for everyone to create awareness, inspire action, or donate towards a solution and support of these essential creatures. Let's use these days as a reminder of our responsibility to protect and preserve our planet's biodiversity and ecosystems.
World Bee Day - 20th May
World Bee Day, celebrated annually on May 20th, is a significant observance that raises awareness about the crucial role of bees and other pollinators in maintaining healthy ecosystems and ensuring global food security. It is estimated that nearly 90% of wild flowering plants and 75% of global food crops depend on animal pollination, making the conservation of pollinators imperative. Unfortunately, human activities such as intensive farming, pesticide use, and climate change pose threats to these essential creatures.
World Bee Day was established in 2018, thanks to the collaborative efforts of the Government of Slovenia, FAO, and Apimondia. The date of May 20th was chosen in honor of Anton Janša, a pioneer of modern beekeeping. Each year, World Bee Day promotes actions that protect and enhance pollinators and their habitats. The theme for World Bee Day 2023 is "Bee Engaged in Pollinator-Friendly Agricultural Production," which emphasizes the importance of evidence-based agricultural practices in supporting pollinators.
Did you know that there are over 20,000 species of bees in the world? Honey bees are incredible creatures that gather nectar from millions of flowers to produce honey. Supporting local beekeepers is a meaningful way to contribute to the conservation of bees. Consider buying honey and other hive products from your local beekeepers or trusted brands that can trace their honey back to a beekeeper.
Another simple action you can take to support pollinators is by letting your lawn grow in May to provide wildflowers. This World Bee Day, let us all commit to taking action to protect these essential creatures that play a crucial role in our food security and biodiversity conservation efforts. Join the global movement on #WorldBeeDay and remember that #PollinatorsMatter
Read more here.
International Day for Biological Diversity - 22nd May
The International Day for Biological Diversity is a globally recognized day celebrated on May 22 each year. The purpose of this day is to promote awareness and understanding of biodiversity issues and to emphasize the importance of preserving Earth’s resources. The theme for 2023 is "From Agreement to Action: Build Back Biodiversity," which emphasizes the need for collective action to rebuild and preserve the planet's biological diversity.
Biodiversity includes genetic differences within species, the variety of plants, animals, and microorganisms, and the different ecosystems they inhabit. Biological diversity provides the foundation for our civilization, and it plays a vital role in human well-being. For example, fish provide 20% of animal protein to about 3 billion people, and plants provide over 80% of the human diet. Traditional plant-based medicines are used for basic healthcare by 80% of people living in rural areas in developing countries. Biodiversity also has a direct impact on human health; its loss could expand zoonotic diseases, while keeping biodiversity intact offers excellent tools to fight pandemics.
The International Day for Biological Diversity is a significant event that reminds us of our responsibility to preserve biodiversity. It highlights that biodiversity is essential for our survival, and losing it could threaten our existence. Therefore, it is essential to protect biodiversity and promote sustainable use of the earth’s resources to preserve the biological diversity of our planet.
Read more here.
World Turtle Day - 23rd May
World Turtle Day is an annual observance that takes place on May 23rd. It was founded in 2000 by the American Tortoise Rescue (ATR) with the aim of celebrating and protecting turtles and tortoises, raising awareness of the threats they face and encouraging human action to help them survive and thrive.
There are over 300 species of turtles in the world, out of which 129 species are endangered, making it crucial to educate people about their conservation. The ATR sponsors the day and provides resources such as Turtle Day lesson plans and craft projects for schools, which can help teach children about the importance of turtle conservation.
World Turtle Day is celebrated in various ways, including rescuing turtles from highways, and participating in research activities. Individuals can also support the cause by adopting turtles or tortoises from rehabilitation centers. It is an opportunity to raise awareness of the threats turtles and tortoises face and inspire people to take action to protect them. Celebrating the day can take many forms, and everyone can get involved in their own way to help these amazing creatures.
Read more here.
As we approach April, there are several significant environmental days to be aware of, including World Health Day, Earth Day, and Stop Food Waste Day. Each of these events presents an opportunity for individuals, communities, and governments to come together and make a positive impact. In this month's World Environmental and Awareness Days blog post, we will focus on what these events mean and how we can take action.
World Health Day - 7th April
World Health Day provides us with an opportunity to celebrate and reflect on the strides made in improving public health over the past 75 years. This year, on April 7, 2023, the World Health Organization will commemorate its 75th anniversary by bringing attention to the theme of "Health for All." This theme serves as a call to action to ensure that every individual has access to quality healthcare, regardless of their background or circumstances. It's an opportunity to address the persistent inequalities in health outcomes and to highlight the challenges that still need to be addressed. The COVID-19 pandemic has emphasized the importance of global cooperation in responding to health emergencies and the necessity for investment in public health infrastructure.
Let's come together on World Health Day 2023 to reaffirm our commitment to Health for All. Whether you're a health professional, policymaker, or simply someone who cares about the health of your community, there's a role for everyone to play in creating a healthier and more equitable world. The 75th anniversary of the World Health Organization should be a celebration of progress and a call to action for the future. Join WHO on a journey to achieve Health For All.
Read more here.
Earth Day - 22nd April
As the world faces the climate crisis, it is clear that we must take decisive action to protect our planet. Earth Day 2023 is especially important, urging governments, businesses, and citizens to invest in a green economy for a healthy, prosperous, and equitable future for all. The theme for this year's Earth Day is "Invest in Our Planet," building on last year's successful campaign and emphasizing the need for everyone to participate. EARTHDAY.ORG is leading the effort to raise awareness about the importance of investing in a green economy.
Governments have already taken steps towards enacting green policies, but more needs to be done. Every country needs to achieve Greenhouse gas neutrality by 2050 to keep global warming below 1.5°C. Businesses, inventors, investors, and financial markets have the power to create value and drive significant change through green innovation and practices. Citizens also have an important role to play, pushing for sustainable solutions as voters and consumers.
Earth Day 2023 presents an opportunity for everyone to make a difference. Whether you plant trees or participate in local events, reduce your plastic consumption, or spread awareness on social media, there are many ways to get involved. Investing in a green economy is crucial for a healthy, prosperous, and equitable future. Earth Day 2023 calls upon all of us to do our part and be accountable. Together, we can make a difference and ensure a bright future for generations to come.
Read more here.
Stop Food Waste Day - 26th April
Stop Food Waste Day is an annual worldwide event that raises awareness about food waste and encourages action. Initiated by Compass Group USA in 2017, it has gained global recognition. On Wednesday, April 26, 2023, people from all walks of life are invited to participate in this day of action to reduce food waste. Globally, one-third of all food produced for human consumption is lost or wasted, contributing to hunger, poverty, climate change, and unsustainable agriculture and oceans. Food waste also wastes energy and resources and produces potent greenhouse gases.
Stop Food Waste Day aims to educate and inspire individuals to prevent, inspire, and repurpose food waste. Simple steps like storing food optimally, using every edible part of an ingredient, and planning meals ahead can prevent food waste. Repurposing food by redistributing surplus and giving new life to wasted ingredients can make a positive impact.
To participate, individuals can find simple recipes, create grocery lists, freeze leftovers, and attend events in their communities. By taking simple steps, we can minimize food waste and ensure everyone is fed.
Read more here.
Environmental and sustainability issues are becoming increasingly important, and it's crucial to spread awareness and celebrate the efforts that people are making to protect the planet. That's why throughout the year, every month is packed with different days to commemorate and create awareness for specific environmental and sustainability topics. These topics cover various fields like social sustainability, the environment, animals, economics, and more.
With March being a busy month in terms of environmental and sustainability events, we've chosen to focus on five world days: World Wildlife Day, International Women's Day, Global Recycling Day, International Day of Forests, and World Water Day. By summarizing what each day is about and why it's celebrated, we hope to inspire you to join in and make a difference in your own way.
World Wild Life Day - 3rd March 2023
World Wildlife Day, an annual event established by the United Nations, serves to acknowledge and increase awareness about the world's flora and fauna. This year's theme, "Partnerships for Wildlife Conservation" highlights the importance of forming partnerships at all levels to protect the earth's biodiversity. Given the current biodiversity crisis, it is imperative to recognize the numerous advantages of conservation and take action against wildlife crime and human-induced reduction of species. Sustainable Development Goal 15, which aims to halt biodiversity loss, emphasizes the need for collaborative efforts to safeguard the planet's ecosystems.
On March 3, 2023, World Wildlife Day will also mark the 50th anniversary of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), which has granted protection to over 37,000 species of animals and plants. CITES has been successful in building partnerships and reconciling differences between groups guided by its regulations. Sustaining existing partnerships and building new ones will be crucial for the future of life on earth. From intergovernmental to local scales, partnerships for conservation must find ways to include businesses to reverse the loss in biodiversity. It's time to change our relationship with nature and work together to ensure the sustainability of our planet's wildlife and ecosystems.
Read more here.
International Women's Day - 8th March 2023
International Women's Day (IWD) is a worldwide celebration of women's achievements and a call for gender parity. It takes place on March 8th and is marked by activities that range from celebrating women's successes to raising awareness about women's rights and fundraising for female-focused charities. The 2023 campaign theme is #EmbraceEquity, which encourages people to challenge gender stereotypes, discrimination, and bias and embrace differences as a positive element of life. The campaign highlights that achieving gender parity is not only about equalizing the rights and opportunities of women, but also recognizing and celebrating the unique contributions and perspectives that women bring to the world.
IWD is not specific to any country, group, or organization, and everyone can support it and you can mark IWD in many ways, including hosting an event, running a campaign, launching an initiative, reporting on achievement, and donating to a female-focused charity. The day is about advancing women's equality in all its forms, and has a long history dating back to 1911. It is celebrated in many countries, with purple, green, and white as its symbolic colors.
So make International Women's Day your day and do what you can to truly make a positive difference for women.
Read more here.
Global Recycling Day - 18th March 2023
Global Recycling Day is celebrated on March 18 every year and encourages us to rethink what we throw away by seeing it as an opportunity instead of waste. By recycling, we lessen our energy use, improve air and water quality, and combat climate change, all while saving money and natural resources. The last decade has seen extreme temperatures and a climate emergency, making it essential to make significant changes to protect the planet and humanity. The Global Recycling Foundation created this day in 2018, with the mission of telling world leaders that recycling is a global issue, and asking people to think about resources, not waste.
This year's theme is #RecyclingHeroes, which recognizes the role recycling plays in contributing to an environmentally stable planet and a greener future. By supporting the global green agenda, recycling is on the front line in the war to save the future of our planet and humanity.
Read more here.
International Day of Forests - 21st March 2023
Forests are often taken for granted, but they provide countless benefits to our lives. They clean our air, purify our water, and provide food and medicine. On March 21st, we celebrate the International Day of Forests, which highlights the role of forests in combating climate change and in the achievement of the Sustainable Development Goals.
This year's theme, "Forests and Health" underscores the link between forests and human well-being. Forests stabilize the climate, protect watersheds, and enrich the soil, contributing to healthy, resilient communities and prosperous economies. It's our responsibility to safeguard these natural resources from deforestation and promote education on sustainable forest management. A sustainable forest industry can also provide new and sustainable ways to produce bioenergy.
Let's work together to protect and preserve these precious resources for future generations.
Read more here.
World Water Day - 22 March 2023
In 2015, the world made a commitment to achieve Sustainable Development Goal 6, which aimed to provide safe water and sanitation for everyone by 2030. Unfortunately, billions of people and institutions still lack access to these basic human rights. The lack of progress in water and sanitation undermines efforts to address various global issues, including health, hunger, gender equality, education, industry, disasters, and peace.
To accelerate progress and address this crisis, World Water Day 2023 will focus on the theme "Accelerating Change" This day coincides with the UN 2023 Water Conference in New York, which will offer a unique opportunity for governments and stakeholders to make voluntary commitments towards accelerating progress on SDG 6 and other water-related goals. These commitments will form the Water Action Agenda, which aims to bring about rapid, transformative change in the coming decade.
Everyone can play a part in achieving this goal, and even small actions can make a difference. Rapid, transformative change is needed to ensure access to safe water and sanitation for everyone.
Read more here.
Sustainability is becoming increasingly important in the face of rapid climate change, and companies are eager to prove their commitment to sustainability. The key is finding an assessment process that is publicly accepted and reliable. Certifications are just exactly the solution! They provide a way for companies to demonstrate that they have met certain standards and achieved certain goals within their sustainability commitments and management approaches. In this blog post, we will explore some of the available certifications and how they help businesses prove their commitment to sustainability. We'll also look at other ways businesses can show their customers that they are taking meaningful action on environmental issues.
What is sustainability management?
The term “sustainability management” refers to the process of incorporating sustainability principles and initiatives into an organization’s decision-making and operations. The goal of sustainability management is to create long-term value for the organization and its external stakeholders while minimizing its environmental impact and maximizing social and economic benefits.
To be effective, sustainability management must be integrated into all aspects of an organization’s operations, from strategy development to day-to-day decision-making. It requires commitment from senior leaders and buy-in from all employees.
There are a number of different certifications that organizations can pursue to demonstrate their commitment to sustainable practices. The most common certification is ISO 14001, which is an internationally recognized standard that outlines requirements for an effective environmental management system. Other popular certifications include the Leadership in Energy and Environmental Design (LEED) program and the Carbon Neutral Protocol.
Why certifications are important
Certifications are important for several reasons. First, they provide independent, third-party verification that an organization is adhering to best practices currently available within sustainability. This can help the organization attract and retain customers, as well as improve its bottom line. Additionally, certifications can help an organization access new markets and build trust with stakeholders. Finally, certifications can serve as a motivational tool for employees, helping to engage them in the organization's sustainability efforts.
The different types of certifications
There are different types of certifications for those working in sustainability management. The two main types are voluntary and mandatory certifications.
Voluntary certifications are not required by law but may be beneficial to those working in the field. They can show that an individual or a company as a whole has a commitment towards their professional practices and is willing to invest in their own development, or the company’s case, the whole business development. Voluntary certifications can also help individuals or companies stand out from the pool of talents and employers.
Mandatory certifications, on the other hand, are required by law in order to work or operate in certain roles or industries.
While there are benefits to both types of certification, mandatory certifications tend to be more expensive and time-consuming to obtain. Therefore, weighing the costs and benefits of each type of certification is important before deciding which one is right for you.
Which certification is right for you?
There are a few different types of certification that you can get in sustainability management. Here is a breakdown of just a few of the most used ones and what they entail:
1. LEED Certification - A green building rating system that has widespread adoption worldwide. LEED offers a foundation for healthy, highly effective, cost-effective green buildings and is available for almost all building types.
2. TourCert - A certification for tourism companies and destinations on their way to sustainable business operations.
r Sustainable Tourism.
4. Green Key - A voluntary eco-label certified to more than 3,700 hotels and other establishments in 60 countries.
5. ISO 9001 - An international standard that specifies requirements for a quality management system (QMS).
Each certification has its own requirements, so it is important to do your research to see which one would be the best fit for you and your organization. For example, if you are looking to get certified for a specific type of building, like an office space, then you would want to look into the LEED or BREEAM certification. If creating a sustainable and healthy workplace is your goal, then WELL would be the right choice for you. And if you are in the travel or tourism industry, then Green Globe, ToruCert, or Green Key would make more sense. There are also general certifications like ISO 9001 that can be applied to any type of business or organization. No matter which certification you ultimately choose, getting certified demonstrates your commitment to sustainability and shows that you are taking responsibility.
How to get certified
To become certified in sustainability management, there are a few steps you need to take. First, research the various certifications that are available and find one that suits your needs. Next, attend a training course or program that will teach you the necessary skills and knowledge required for the certification. Finally, make the necessary steps to receive your credential.
By becoming certified in sustainability management, you will be able to demonstrate your commitment to environmental responsibility and social justice. This can give you a competitive edge when competing with other companies in the same field. Many countries now require companies from specific industries to have some level of certification to adhere to the country’s regulations.
Conclusion
The importance of certifications within cannot be overstated. Not only do they provide transparency into a company's environmental and social management practices, but they also assure customers that their purchases are helping to reduce waste and promote sustainable operational methods.
The certification process is an important way for businesses to demonstrate their commitment to reducing their impact on the environment and providing quality products that will last for years to come. In so doing, acquiring the right sustainability certification can help a business make a positive impression and gain the trust of consumers who will want to support companies that are doing good for the planet for years to come.
Find out how BeCause can support your business by effectively acquiring the necessary certifications and further management of sustainability-related information!
Introduction:
The European Union (EU) has implemented new regulations to enhance corporate sustainability reporting and promote transparency in companies' social and environmental impact. Large and listed companies, excluding micro-enterprises, are now required by EU law to disclose information about the risks, opportunities, and impact of their activities on people and the environment. This piece of quite important legislation known as the Corporate Sustainability Reporting Directive (CSRD), aims to facilitate the evaluation of companies' sustainability performance for investors, civil society organizations, consumers, and other stakeholders.
The CSRD, which came into effect on 5 January 2023, modernizes and strengthens the reporting rules for social and environmental information. It expands the scope of reporting requirements to include a broader set of large companies and listed small and medium-sized enterprises (SMEs). We're talking about a whopping 50,000 companies here!
So, who does the CSRD apply to?
The CSRD will apply to companies that meet the following criteria:
· Over 250 employees
· More than €40 million in annual revenue
· More than €20 million in total assets
· Publicly-listed equities with more than 10 employees or €20 million in revenue
These new rules are all about giving investors and stakeholders the lowdown on sustainability so they can better gauge the risks associated with climate change and other sustainability issues. Plus, they're encouraging companies to be open about their impact on society and the environment. It's all about building a culture of transparency, folks! And hey, over time, these rules will actually help companies cut down on reporting costs by making the info more standardized.
To get on board with the CSRD, companies that fit the criteria need to follow a few compliance steps each year starting in 2024. Here's what they have to do:
· Prepare and submit a CSRD report: Large companies must submit their first CSRD report in early 2025, based on their environmental performance during the 2024 fiscal year. SMEs will begin reporting for 2026 using the CSRD's streamlined SME guidelines.
· Track and disclose the required information: CSRD reports should include management commentary and data within a dedicated management report section, covering various aspects such as materiality process, sustainability and ESG performance, transition to a sustainable economy, sustainability risks and impacts, business model resilience, and more.
· Digital data and tagging: Companies must prepare their financial and management statements in an electronic format following the European Single Electronic Format (ESEF) regulations and the EU sustainability taxonomy. Sustainability information should be digitally tagged according to specified categorization systems outlined in the CSRD Regulation, or companies can utilize ESG software for automated data tagging.
· Third-party assurance: Organizations reporting under the CSRD will need to seek "limited" assurance for the sustainability information they disclose. This involves engaging a neutral, trusted, and experienced third party to review the data, ensuring independent scrutiny of the sustainability reporting.
How should the companies report?
The European Financial Reporting Advisory Group (EFRAG) was given the task by the European Commission to develop initial European Sustainability Reporting Standards (ESRSs). The draft ESRSs were prepared by EFRAG's Project Task Force between June 2021 and April 2022 and were made available for public consultation from April 30 to August 8, 2022. Following this consultation, EFRAG has now presented a preliminary set of draft ESRSs in this report for adoption by the European Commission.
The purpose of these standards is to outline the general requirements that companies must adhere to when preparing and presenting sustainability-related information under the CSRD.
The ESRS will serve as the standard for sustainability reporting that companies will need to adopt in the coming years, with specific deadlines set for different categories of companies.
Deadline 1: Kicking off on January 1, 2024
Companies in the spotlight: Larger companies with over 500 employees that are already familiar with the Non-Financial Reporting Directive (NFDR). They'll need to roll up their sleeves and get ready to report in line with the CSRD requirements for the fiscal year 2024. The published report is expected to hit the scene in 2025.
Deadline 2: Unveiling on January 1, 2025
Companies stepping in the spotlight: Now, it's time for the first set of companies that weren't previously subject to the NFDR to start reporting according to the requirements of the CSRD. We're talking about those larger companies that meet at least two out of three specified requirements:
- Over 250 employees and/or
- Reeling in 40 million EUR in turnover and/or
- Flaunting a total asset value of 20 million EUR. These companies will need to buckle down and start reporting according to the CSRD requirements in 2025.
The reports of these companies should be hitting the scene in 2026.
Deadline 3: Hitting the ground running on January 1, 2026
Companies taking center stage: It's finally showtime for small and medium-sized enterprises (SMEs) listed on EU-regulated markets that surpass at least two of these thresholds:
- Rocking over 10 employees
- Raking in more than 700,000 EUR in net turnover
- Boasting total assets above 350,000 EUR. The CSRD will be making its grand entrance into its financial year 2026. But here's the deal: SMEs and other small and non-complex institutions can choose to opt out of the reporting rules until January 1, 2028. They've got some flexibility, folks.
Deadline 4: Making waves on January 1, 2028
Companies stealing the spotlight: Time for non-EU-country companies that meet the following criteria to join the CSRD party:
- Net turnover of a whopping 150 million EUR within the EU
- At least one subsidiary or branch waving the company flag within the EU. They'll need to align with the CSRD requirements and show off their reporting prowess.
So, get ready for these different phases of the CSRD rollout, as companies of various sizes and backgrounds gear up to disclose their sustainability efforts. It's all about transparency, accountability, and taking those steps toward a more sustainable future.
The overall goal is to have all of the various shapes and sizes of companies follow the European Sustainability Reporting Standards (ESRS) to make sure they cover all the material information. This info should help everyone understand how the company's actions affect the environment, its growth, performance, and overall position.
Conclusion:
These regulations under the CSRD aim to strengthen sustainability reporting practices, promote transparency, and provide investors and stakeholders with the necessary information to assess companies' sustainability performance. By fostering accountability and harmonizing reporting standards, the EU is taking significant steps toward achieving its sustainability goals outlined in the European Green Deal. So, let's keep it green!
Introduction:
In today's business landscape, sustainable finance has emerged as a vital consideration for companies and investors alike. Recognizing the significance of environmental, social, and governance (ESG) factors, the European Union (EU) has taken the lead in promoting sustainable finance through regulations and initiatives. One such regulation is the Sustainable Finance Disclosure Regulation (SFDR), enacted by the EU in 2019. In this blog post, we will explore the key aspects of SFDR and its implications for businesses operating within the EU.
For the convenience of financial market participants preparing the financial product disclosures referred to in Articles 6, 8, and 11 of the Sustainable Finance Disclosure Regulation (Regulation (EU) 2019/2088), the three European Supervisory Authorities (EBA, EIOPA, and ESMA) provide an editable version of the templates contained in Commission Delegated Regulation (EU) 2023/363.
The Purpose and Scope of SFDR:
SFDR aims to standardize sustainability disclosure requirements for financial market participants (FMPs) and advisers. FMPs encompass various entities involved in the financial sector, including insurance undertakings, investment firms, institutions for occupational retirement provision, pension product manufacturers, alternative investment fund managers, pan-European personal pension product providers, venture capital fund managers, social entrepreneurship fund managers, UCITS management companies, and credit institutions offering portfolio management services.
SFDR mandates that these FMPs and advisers make sustainability-related disclosures at both the entity and product levels. These disclosures enable investors to access reliable and comparable information about the sustainability characteristics and potential impact of their investments.
Fund categories:
SFDR categorizes funds into three groups based on their sustainability focus. Article 6 covers funds that don't integrate sustainability into their investment process but need to disclose how they manage sustainability risks. Article 8 applies to funds that promote environmental or social characteristics and requires clear communication of their intentions and reporting of outcomes. Article 9 applies to funds with a specific focus on sustainable investments and demands comprehensive disclosures about objectives, impacts, and carbon footprint reduction goals.
Key Provisions of SFDR:
a) Transparency of sustainability risk policies: Financial market participants must publish on their websites information about their policies on integrating sustainability risks into their investment decision-making process. Financial advisers also need to disclose their policies on integrating sustainability risks in their investment advice or insurance advice.
b) Transparency of adverse sustainability impacts at the entity level: FMPs must publish and maintain on their websites statements regarding the due diligence policies on principal adverse impacts of investment decisions on sustainability factors. This includes information on the identification and prioritization of adverse sustainability impacts, engagement policies, adherence to responsible business conduct codes, and alignment with the objectives of the Paris Agreement.
c) Transparency of remuneration policies: Financial market participants and advisers must include information in their remuneration policies on how those policies are consistent with the integration of sustainability risks. This information should be published on their websites.
d) Transparency of the integration of sustainability risks: FMPs and advisers need to include descriptions in pre-contractual disclosures regarding how sustainability risks are integrated into their investment decisions or advice. They should also disclose the likely impacts of sustainability risks on the returns of financial products.
e) Transparency of adverse sustainability impacts at the financial product level: FMPs must disclose, in pre-contractual disclosures, clear explanations of whether and how financial products consider principal adverse impacts on sustainability factors. If adverse impacts are not considered, reasons for such omission should be provided. These disclosures should be made by December 2022.
f) Transparency of the promotion of environmental or social characteristics: When financial products promote environmental or social characteristics, disclosures should include information on how those characteristics are met and whether designated indices are consistent with those characteristics.
g) Transparency of sustainable investments: For financial products with sustainable investment objectives, disclosures should include information on how designated indices align with those objectives. If no index is designated, an explanation of how the objective is to be attained should be provided. In the case of carbon emissions reduction objectives, disclosures should highlight the objective of low carbon emission exposure in line with the long-term global warming objectives of the Paris Agreement.
h) Transparency on websites: Financial market participants should publish and maintain on their websites information regarding environmental or social characteristics, sustainable investment objectives, methodologies used to assess environmental or social characteristics, and the impact of sustainable investments. These disclosures should be accurate, fair, clear, not misleading, simple, and easily accessible.
i) Transparency in periodic reports: Financial market participants should include descriptions of environmental or social characteristics or overall sustainability-related impacts in periodic reports. These reports should be made in accordance with the respective sectoral legislation.
Reporting:
For the convenience of financial market participants preparing the financial product disclosures referred to in Articles 8,9, and 11 of the SFDR (Regulation (EU) 2019/2088), the three European Supervisory Authorities (EBA, EIOPA, and ESMA) provide an editable version of the templates contained in Commission Delegated Regulation (EU) 2023/363.
By utilizing the templates provided by the European Supervisory Authorities, financial market participants can streamline their disclosure preparations. These templates encompass the essential information required for financial product disclosures, including descriptions of environmental or social characteristics, methodologies used for assessing sustainability impact, and alignment with designated indices and applicable fund categories.
Find the templates here.
Conclusion:
The EU's Sustainable Finance Disclosure Regulation (SFDR) is a comprehensive framework that aims to enhance transparency and standardize sustainability disclosures within the financial sector. By imposing obligations on financial market participants and advisers, SFDR empowers investors to make informed decisions aligned with their sustainability preferences. Businesses operating within the EU need to understand and comply with SFDR's provisions to enhance sustainability integration, improve investor confidence, and capitalize on the opportunities presented by the growing demand for sustainable finance. As the EU continues to lead the way in sustainable finance, embracing SFDR will become increasingly crucial for businesses operating in the European financial landscape.
Note: The information provided in this blog post is for informational purposes only and does not constitute legal or financial advice. Organizations should consult with legal and compliance professionals to ensure accurate interpretation and implementation of SFDR requirements.
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