On Thursday 4 February 2021, the European Supervisory Authorities (“ESAs”)
published the updated draft regulatory technical standards (“Draft RTS”), which is intended to supplement the Sustainable Finance Disclosure Regulation (“SFDR”). If approved, these will come into force on 1 January 2022. In the absence of regulatory guidance for firms to comply with SFDR, we produced our first paper on the implications for Article 6 Funds earlier this year. Some of
the key highlights from our initial paper were:

• Fund manager and Funds should document their policy on integrating sustainability. The policy should be documented for each Fund, be reviewed and approved by the board of directors of the Fund manager on an annual basis.
• The sustainability policy should be included on the website and the website disclosure should be a separate section which states whether the Fund manager and Fund considers sustainability risk or not and it should be updated on a regular basis.
• Sustainability risk is integrated into the existing Risk Management Frameworks demonstrating linkages, dependencies and potential impacts to support decision making.

The areas above should be applicable for all Funds, unless sustainability is deemed to not be relevant for a specific Fund. Following on from the Article 6 guide, we are now going to focus on the additional requirements for Article 8 Funds.