• Laura Fox, Anthony Verhelpen
  • Published: 28 January 2021


With less than eight weeks until the go-live date, there are still many areas of uncertainty around the European Union's Sustainable Finance Disclosure Regulation (SFDR).

On 7th January, the Chair of the Joint Committee of the European Supervisory Authorities (ESAs) wrote a letter to the European Commission regarding several areas of uncertainty in the implementation of the SFDR, prior to its application on 10th March 2021. The questions raised by the ESAs encompass many of the concerns that market participants are facing (with less than 8 weeks until go-live). 

The publication of this letter highlights that not only financial institutions but the ESAs themselves lack clarity on many points concerning SFDR. Below we summarize the main questions raised by the ESAs:  

1. Does the provision of SFDR apply to non-EU AIFMs and registered AIFMs? 

The ESAs ask the Commission to confirm whether the SFDR will apply to non-EU AIFMs when they market a sustainable AIFM under a National Private Placement Regime and whether SFDR applies to “sub threshold” AIFMs referred to in Article 3(2) AIFMD.

2. How should the 500-employee threshold for principal adverse impact reporting be applied at entity level to parent undertakings of a large group?

The ESAs ask whether this should be applied to both EU and non-EU entities of the group without distinction and whether the statement impacts the parent undertaking or the group at a consolidated level? This is particularly significant, as firms which meet the threshold will have to consider adverse impacts of their investment decisions on sustainability factors (rather than use a “comply or explain” approach) from 30 June 2021.

3. What is the meaning of “promotion” in the context of products ‘promoting’ environmental or social characteristics within Article 8?

The ESAs note that the provision of different scenarios that are within (and outside) the scope of SFDR would provide clarification on the “level of ambition of the characteristics”. Will including the word ‘sustainable’ or ‘ESG’ in the name of a product mean it is promoting an environmental or social characteristic?

4. How should Article 9 of the SFDR be applied?

The ESAs ask for further clarification on what constitutes an Article 9 product (or a so-called “dark green” product).

5. How should you apply SFDR product rules to MIFID portfolios and other tailored products?

The ESAs ask for further guidance on whether disclosure requirements should apply at the level of the portfolio in the case of discretionary clients and question how confidential obligations can be respected where disclosure is required.


With the go-live date fast approaching, the industry is waiting with great interest to see how the European Commission responds. Capco Belgium’s Regulatory and Compliance team is closely monitoring this topic and is ready to answer any questions you may have. For more information, please contact us. 



Laura Fox, Consultant
M +32 497 51 88 54

Anthony Verhelpen, Managing Principal
M +32 472 80 08 90
E anthony.verhelpen@capco.com