The European Securities and Markets Authority has published its report on a 2023–2024 Common Supervisory Action with National Competent Authorities on how the investment management sector integrates sustainability risks and delivers related disclosures. Overall compliance was assessed as satisfactory, but the review found that improvements are needed in sustainability risk integration and in entity-level and product-level disclosures under the Sustainable Finance Disclosure Regulation (SFDR). The supervisory work aimed to assess, foster and enforce compliance with requirements in the SFDR, the Taxonomy Regulation and relevant implementing measures, including provisions in the UCITS and Alternative Investment Fund Managers Directive (AIFMD) implementing acts on integrating sustainability risks. During the exercise, NCAs shared supervisory practices to promote convergence, and the CSA helped identify breaches that were subsequently addressed by supervised entities. Next, ESMA will facilitate further discussions among NCAs on sustainability risks and disclosures and encourages NCAs to maintain proactive engagement with market participants and follow up where vulnerabilities are detected.
European Securities and Markets Authority 2025-06-30
European Securities and Markets Authority identifies gaps in asset managers’ sustainability risk integration and SFDR disclosures in 2023–24 common supervisory action report
The European Securities and Markets Authority (ESMA) released a report on the 2023–2024 Common Supervisory Action with National Competent Authorities, evaluating the investment management sector's integration of sustainability risks and disclosures. While overall compliance was satisfactory, the review highlighted the need for improvements under the Sustainable Finance Disclosure Regulation (SFDR). ESMA plans to continue discussions with NCAs and urges proactive engagement with market participants to address identified vulnerabilities.