Should we be worried about the ESAs’ delay in the delivery of its mandate to review the Principal Adverse impact Indicators (PAIs)?

The ESA’s Joint Committee has written a letter to DG FISMA, advising that due to several factors, the ESAs will not be able to meet the original deadline of 28 April 2023 for delivering its mandate to review the principal adverse impact indicators and financial product disclosures in the SFDR Delegated Regulation. The delay could extend to up to six months in the execution of the mandate, while the original deadline was 28 April 2023.

The SFDR RTS are expected to enter into force as of 1st January 2023 and the recent publication by the European Commission of adopted amendments to require financial market participants to disclose the extent to which their portfolios are exposed to gas and nuclear-related activities already raised concerns among the financial industry. While the revision and extension of PAI indicators (covering their definitions, the applicable methodologies, metrics and presentation) represent a significant exercise, further clarifications and guidance would be relevant and welcome by the market.

The ABBL will closely monitor any new developments on this topic while working with its members to share and address to the extent possible their main concerns and challenges in implementing SFDR requirements.