AEIP answers the joint consultation of the ESAs concerning Taxonomy-related sustainability disclosures
AEIP provided its input to the ESAs joint consultation on the RTS concerning taxonomy-related sustainability disclosures. In it AEIP welcomes the opportunity to comment on these draft measures. At the same time, it recognizes the effort of the ESAs to clarify the Level 1 provisions of both the SFDR and the Taxonomy Regulation through the letter of 7 January to the European Commission and the webinar of 29 April. Nevertheless, the entire framework remains difficult to understand and implement, with unclear definitions and overlap.
Moreover, both the SFDR and the Taxonomy apply to a wide range of financial market participants (FMP) and products so, as a result, the same information has to be read by very different types of audiences. While we are a strong supporter of the Taxonomy, we continue to believe that this harmonised approach to pre-contractual information is flawed.
Pension funds and provident institutions (occupational pension insurers) are both users and providers of information under the SFDR and Taxonomy Regulation (TR). However, many pension funds and provident institutions have mandatory participation established by collective agreements –for example in the Netherlands, in Belgium, in Germany and in France- so their automatically enrolled members have a completely different level of financial literacy, time and interest (as they can be managers in the automotive industry or employees in the construction sector as well) . We feel that the combined information requirements of the SFDR and TR will lead to an overflow of information for pension funds participants, life insurance beneficiaries and retail clients. We recommend a balanced approach to information requirements in order to find a compromise between the information needs of different users.
As such we recommend:
- Removing Article 16a (1) a (ii): we would caution against these ‘negative’ explanations, because they require an understanding of the difference between ‘promotion’ and ‘sustainable investments’.
- Removing or reducing (or putting at the bottom) of the entire sector on the classification of the financial product as being Article 8/9 SFDR, making sustainable investments according to Art. 2(17) SFDR, and doing so in environmental objectives that may or may not fall within the Taxonomy. This type of information is meaningless for pension fund participants, or retail clients more generally
For a more detailed view of AEIP’s input to the ESAs joint consultation, please see here.