EU: what next for SFDR and Taxonomy?

See below for next steps on the EU Sustainable Finance Disclosure Regulation (SFDR) and the EU Taxonomy. However, please bear in mind that these dates could be subject to change. 

SFDR RTS

By the end of March - the Commission is expected to  formally adopt the 13 RTS postponing the date of application of the SFDR to January 2023. 

The RTS are currently being translated into the all official languages. Translations should be completed next week, which will trigger the internal procedures for adoption. 

The text of the RTS will look different from previous versions. However these are mostly removed duplications and formal changes, so the actual requirements should remain the same.

ESAs Guidelines

The European Supervisory Authorities (ESAs) are finalising their work on two sets of guidelines:

• ESAs guidelines on Taxonomy-alignment disclosures at product level - adoption is expected in April.
• ESAs update of SFDR supervisory statement on how to comply with Level 1 requirements until the RTS applies -  adoption is expected around May as the ESAs will first need to assess the final wording of the RTS.

Social Taxonomy and Brown Taxonomy

The Platform on Sustainable Finance (PSF) report to the Commission with final recommendations on the Social Taxonomy is expected to be published next week (probably 28 February). The new text includes important changes to the previous version. In particular, the Social Taxonomy has been aligned with the structure of the Taxonomy Regulation and now has three objectives: (i) providing decent work (including value chain workers); (ii) adequate living standards and wellbeing for end users; and (iii) inclusive and sustainable communities and societies. 

The PSF is also expected to deliver its final report on a Brown Taxonomy in Q1 2022, but work on this is delayed.

Taxonomy DA on nuclear and natural gas

On 2 February, the Commission approved in principle the Complementary Delegated Act (DA) for nuclear and natural gas and the FAQs clarifying the content of the Article 8 Disclosures DA (see here). These have to be translated into all EU official languages before the DA can be formally adopted. The formal scrutiny period by the European Parliament and Council cannot start until that happens. 

Translations are expected to take around 2-3 months, so adoption of the DA is expected to take place in late-April or May.