What to expect in the next two years from the regulations on EU’s Sustainable Finance?

As part of the EU’s commitment to sustainability, the European Securities and Markets Authority (ESMA) has released an updated roadmap outlining the timeline for implementing key sustainable finance regulations. This roadmap provides relevant and at the same time critical deadlines for financial institutions and corporations to align their reporting practices with the EU’s environmental, social, and governance (ESG) regulatory requirements. Here’s a summary of upcoming milestones and what your organisation needs to know.

Key implementation dates and requirements

1. Corporate Sustainability Reporting Directive (CSRD) & Taxonomy Regulation (TR)

   • Effective now: Since January 2023, non-financial undertakings have been required to disclose KPIs related to taxonomy alignment under the Taxonomy Regulation (TR) focusing on climate objectives.

   • Starting January 2024: Financial undertakings must also disclose taxonomy alignment for climate objectives, followed by expanded disclosures on additional environmental objectives starting January 2026.

   • 2025 and beyond: Companies previously subject to the Non-Financial Reporting Directive (NFRD) will begin CSRD-aligned reporting in 2025, with other large companies joining in 2026, and listed SMEs and small & non-complex Financial Institutions reporting by 2027.

2. Sustainable Finance Disclosures Regulation (SFDR):

   • By 21 November 2024: New guidelines on fund naming conventions using ESG or sustainability-related terms come into force, ensuring transparency and alignment with investor expectations for all newly created funds. The same guidelines will start to apply for all funds existing prior to the entry-into-force of the Regulation six months later – as of May 21, 2025.

   • Mid-2025: A review of the SFDR Level 1 (L1) is planned, which may introduce further adjustments to enhance disclosure standards. The deadline is still marked as “tentative” in the current timeline.

   • Ongoing: ESMA will continue reporting on the extent of voluntary principal adverse impacts (PAI) disclosures under SFDR, with the next report due in November 2024 (their last annual report was published on September 23, 2023).

3. Benchmark Regulation (BMR):

   • End of 2025: The transitional provision for third-country benchmarks ends, requiring firms to adjust their benchmarks to meet updated EU standards.

4. European Green Bond Regulation (EuGBR):

   • March to June 2025: A public consultation will take place on the remaining technical standards, setting the stage for the full operationalisation of the European Green Bond framework.

   • 21 May 2026: The end date of the transition period under Article 69/70 from the European Green Bonds Regulation.

Why this matters: With increasing expectations for transparency and accountability, regulations such as CSRD, TR, and SFDR are designed to drive capital towards sustainable investments and solidify your organisation’s commitment to sustainability. As regulatory requirements become more complex, the need for reliable, industry-specific ESG solutions continues to grow. With our ESG Solutions for the Financial Industry you get comprehensive tools to navigate these requirements confidently and avoid compliance risks.

What you can get from cleversoft’s Regulatory ESG services:

• Compliance Commitment: cleversoft’s ESG services fully cover the regulatory requirements for financial institutions and are timely adapted to changes in the relevant regulatory framework. This saves you valuable time that you would otherwise spend on reviewing and implementing regulatory changes in detail. You can always be sure not to miss any regulatory changes.

• Efficient Disclosure Management: Standard KPIs and ready-to-use templates simplify the reporting process, reduce manual effort, and relieve your team.

• Specifically for the financial industry: cleversoft’s ESG services are tailored to the needs of financial institutions and take into account the specific requirements of banks, insurers, and asset managers – no additional adjustments are necessary.

Get in touch with us to learn more on how cleversoft can help you report reliable and comparable sustainability information.