The European Securities and Markets Authority (ESMA) has launched a new common supervisory action (CSA) on sustainability-related disclosures and the integration of sustainability risks.
As part of the initiative, ESMA will work with national competent authorities (NCAs) to assess the compliance of supervised asset managers with relevant provisions in the sustainable finance disclosure regulation (SDFR), the Taxonomy regulation and relevant implementing measures.
Ensuring greater convergence in the supervision of the risks, stemming from incorrect and misleading disclosures, is a union strategic supervisory priority (USSP) for NCAs, central to the effort to foster transparency.
The CSA seeks to promote the comprehensibility of asset managers’ ESG disclosures. NCAs across the EU will be expected to combine knowledge on how to encourage convergence for sustainability-related disclosures and to identify how sustainability risk integration can be supervised.
NCAs will carry out this collaboration through ESMA until Q3 2024.
The action also aims to assess whether market participants follow applicable rules and standards in practice, to gather further information on the risk of greenwashing in the management sector, and to identify relevant supervisory and regulatory interventions that could address the issue.
ESMA first included ESG disclosures in its USSPs in October 2022.
The CSA’s preliminary findings on greenwashing risks will be added to ESMA’s final report on greenwashing, expected to be published in May 2024.
