Luxembourg: UCITS managers and AIFMs asked to tell CSSF about greenwashing risk

CSSF begins work to deliver on its ESMA CSA obligations

The Luxembourg Financial Supervisory Authority (Commission de Surveillance du Secteur Financier, “CSSF”) has issued a statement regarding the launch for Luxembourg-based UCITS Managers and AIFMs of the Common Supervisory Action on sustainability risks and disclosures in the investment fund sector (“CSA”) by the European Securities and Markets Authority (“ESMA”) together with the relevant National Supervisory Authorities (“NSA”). 

What is the CSA?

The goal of the CSA is to assess the compliance of supervised asset managers across the EU with relevant provisions on integration of sustainability risks and disclosures in the Sustainable Finance Disclosure Regulation (“SFDR”), the Taxonomy Regulation and relevant implementing measures, including the relevant provision in the UCITS and AIFMD implementing acts. 

The CSA will take into account the principles affirmed in the ESMA supervisory briefing on sustainability risks and disclosures in the area of investment management and will be performed based on a common methodology by ESMA. The methodology has not been disclosed in the statement, but it requires information in relation to sustainability disclosures to be clear, succinct, fair and not misleading. 

What do Luxembourg UCITS managers and AIFMS have to do?

- In a first step, NSAs will request UCITS Managers and AIFMs to complete a questionnaire focusing more closely on greenwashing risks. 

- In a second step, NSAs will request UCITS Managers and AIFMs to complete a questionnaire dedicated to the integration of sustainability risks and factors in their organisational arrangements and to the transparency disclosures at entity and product level. 

According to the statement, technical information and deadlines will be shared by the CSSF with the selected entities on a bilateral basis. 

Background to the request

On 29 August 2023 the CSSF, as the relevant NSA in Luxembourg, launched the above mentioned first step and contacted via e-mail the Luxembourg-based UCITS Managers and AIFMs in scope of the CSA. The UCITS Managers and AIFMs that did not receive an email from the CSSF on 29 August 2023 on this subject matter are not impacted by the CSA. 

Please do not hesitate to get in touch with Linklaters Luxembourg and its ESG Team in order to assess how our team of dedicated lawyers may best be able to assist you with the requirements under the CSA.

Launch of the ESMA Common Supervisory Action (CSA) on sustainability risks and disclosures in the investment fund sector – CSSF