Skip to main content

The current implementation status of SFDR

ESG disclosures

Sustainability Insights 3/2021

By June 30, financial market participants and financial advisers should have disclosed their approach to the impact of products and investments on ESG aspects.

The SFDR (Sustainable Finance Disclosure Regulation), in force since March 10, covering financial market participants: banks, investment funds and insurers, obliges these entities to disclose their approach to sustainable development.

We looked at how the companies operating on the Polish market approached the new regulations. Our analysis covered 8 insurance companies (TU) and 6 banks (TFI / BM).
Main observations from our review:

  • most of the analyzed companies made disclosures to the minimum extent required by law and they were general in nature
  • most insurance companies disclose risks / strategies at the capital group level
  • 64% of the analyzed companies report that they take into account ESG factors in their investment analysis and decision-making processes, 36% have defined internal procedures with regard to the assessment of ESG factors, only 29% of companies disclosed details of their approach in this respect in the statement itself or by referring to the adopted formal and public documents.
  • in the case of 57% of the analyzed companies, the communicated element of ESG management was the use of exclusions in certain industries
  • Also 57% of the companies declare that they conduct regular assessment of the companies in their investment portfolio in terms of ESG risks
  • 36% of the companies reviewed consider the negative impact of their investments on sustainability factors, 14% declare that they intend to do so and set a timeframe for implementation, and 29% do not plan to change their current approach in this regard
  • 10 out of 14 companies reported in their published statements that they incorporated sustainability risks directly or indirectly into their remuneration policies, however only 2 companies disclosed what ESG factors were taken into account.

The disclosures of the SFDR have shown that the financial sector in Poland is still insufficiently mature in the area of sustainable finance. Global trends in the growing importance of ESG factors among investors and regulators leave no doubt that the role of the financial sector in the processes of "green transformation" is of key importance.

Financial institutions are slowly realizing that corporate responsibility cannot be limited to charity and educational activities carried out by corporate foundations. Certainly, a transformation of the financial sector can be expected in the coming years, similar to the one we have been observing for several years in other industries where corporate social responsibility is becoming an integral part of the business strategy. Disclosures of the SFDR will be an indicator of these changes.

Regulatory Technical Standards are the implementing act to the regulation, specifying the requirements in terms of content, methodology and methods of presenting information, also in terms of adverse effects on the sustainable economy. So far, in February 2021, the RTS project developed by the European supervisory authorities has been published, and the reporting obligation in the scope specified in them has been postponed to the beginning of 2023 for the year 2022.

At the moment, however, the final version of the RTS has not been adopted - we will inform you about the changes.

Did you find this useful?

Thanks for your feedback

If you would like to help improve further, please complete a 3-minute survey