Breaching the data gap: CDSB's response to joint ESA consultation on ESG disclosures

Axelle Blanchard summarised the key points of CDSB's response to the joint consultation

On 1 September, CDSB submitted its response to the European Supervisory Authorities’ joint consultation on their proposed draft Regulatory Technical Standards on ESG disclosures.

This consultation aims to specify the disclosure requirements at entity and product-level introduced by the Sustainable Finance Disclosure Regulation.  At the entity-level, this Regulation will require financial market participants falling under its scope to disclose the principal adverse impacts their investment decisions have on environmental, climate and social issues.

We are waiting for the new European sustainable finance strategy to be published in the upcoming months as part of the European Green Deal, this consultation is therefore a significant attempt to boost the accountability of the financial sector which should be incentivised to align its investment activities with the objectives of a decarbonized economy. It provides an opportunity to foster an alignment between investor and companies’ disclosures and breach the data gap which is cited as a barrier to increased transparency and meaningful disclosures.

In order to reach that goal, CDSB has highlighted in its response the need to:

  • Integrate an assessment of the materiality of the indicators leading to principal adverse impacts when determining what needs to be disclosed ;

  • Adopt a more balanced approach - specify further in the text that financial market participants have appropriate flexibility in assessing the materiality of the various indicators leading to principal adverse impacts beyond disclosing all of the required indicators, without creating any loopholes damaging the quality, comparability and consistency of the disclosed information ; and

  • Ensure integration and coherence with existing disclosure-related legislation, including the Taxonomy Regulation and the Non-Financial Reporting Directive. Many organisations will be caught under a number of legislations as listed companies and as investment companies. As the regulatory landscape evolves rapidly, these requirements should be updated on a regular basis in order to avoid duplicative requirements.

The ESAs have indicated that they would submit their final Regulatory Technical Standards towards the end of the year.

Requirements are set to be applying as of 10 March 2021 with a first publication of the disclosures in a statement available on the company’s website expected in June 2022.

Read the full consultation response here.


If you have any questions, please contact CDSB's Policy Manager, Axelle Blanchard: