Global Trustee and Fiduciary Services Bite-Sized Issue 1 2025

11 QUICK LINKS AIFMD CRYPTOASSETS EMIR FINTECH MIFID II/MIFIR MMF NBFI OPERATIONAL RESILIENCE SUSTAINABLE FINANCE/ESG ASIA IRELAND LUXEMBOURG NETHERLANDS NORTH AMERICA UNITED KINGDOM Global Trustee and Fiduciary Services Bite-Sized | Issue 1 | 2025 SUSTAINABLE FINANCE/ESG Categorisation of Products Under the SFDR: Proposal of the Platform on Sustainable Finance On 17 December 2024, the Platform on Sustainable Finance (the Platform) published a briefing note for the European Commission (EC) outlining how a categorisation system for sustainable finance products could be set up and calibrated. The briefing note outlines a proposal for a categorisation scheme and key considerations for the EC as part of the Sustainable Finance Disclosure Regulation (SFDR) review process. Key consideration of the proposal includes a strong interlinkage with investors` sustainability preferences, a seamless transition by streamlining existing elements of SFDR and the wider sustainable finance framework, in particular indicators used to measure sustainability and the potential implications of introducing a new categorisation system on existing financial products. The Platform recommends categorising products with the following sustainability strategies • Sustainable : Contributions through taxonomy‑aligned investments or sustainable investments with no significant harmful activities or assets based on a more concise definition consistent with the taxonomy • Transition : Investments or portfolios supporting the transition to net zero and a sustainable economy, avoiding carbon lock‑ins, per the Commission’s recommendations on facilitating financing for the transition to a sustainable economy • ESG collection : excluding significantly harmful investments / activities, investing in assets with better environmental and/or social criteria or applying various sustainability features The Platform recommends that all other products should be identified as unclassified products. The Platforms says that the categories aim to reflect the overarching sustainability objective of financial products, focusing on the needs of retail investors. To be effective, it is proposed to align sustainability preferences with the categories. The briefing note is accompanied by an annex with guidance on setting thresholds and supporting data. The annex shows primary findings on the current state of the ESGmarkets and the potential impact which setting certain thresholds could have on current products falling under the scope of Article 8 and Article 9 of the SFDR. It also provides guidance on steps which are useful to determine possible thresholds for categories. The Platform on Sustainable Finance will present the proposal in a webinar on Tuesday 21 January 2025 from 13:00 to 14:00 CET. Link to Briefing Note here ESMA Consults on Proposals to Digitalise Sustainability and Financial Disclosures On 13 December 2024, the European Securities and Markets Authority (ESMA) published a Consultation paper, seeking stakeholders’ views on how the European Single Electronic Format (ESEF) can be applied to sustainability reporting. The proposals also aim to ease the burden associated with financial reporting. ESMA says that it’s a priority for it, that investors are able to effectively access relevant and comparable information, enabling them to enhance and accelerate their data-driven investment strategies. ESMA says that digitalised sustainability and financial information from undertakings will be integrated in the future European Single Access Point (ESAP), ensuring the efficient access and use of this information by investors. The Consultation Paper includes proposals for: • Defining the marking up rules for sustainability reporting; with a phased implementation for ESRS sustainability statements in three steps, each lasting two years, and a full implementation for Article 8 disclosures; and • Redefining the marking up approach for the Notes to the IFRS consolidated financial statements. ESMA says that the Consultation Paper also proposes amendments to the Regulatory Technical Standards on the European Electronic Access Point.