EACB welcomes the opportunity to provide feedback on the ESA’s joint consultation on draft RTS regarding ESG disclosures as mandated by Article 2a, Article 4(6) and (7), Article 8(3), Article 9(5), Article 10(2) and Article 11(4) of Regulation (EU) 2019/2088. It sincerely appreciates that the ESAs put a lot of thought into their proposals, and also a serious effort was made in answering as many queries from the various financial industries during the public hearing that was held by the ESAs on 2 July with respect to this consultation. Notwithstanding the efforts made, we still have an important number of concerns regarding the draft RTS and notably that the Disclosure Regulation Level 1 text contains several elements that hold back the Draft RTS from being as useful and effective as they could possibly be such as for example the mandate to the ESAs re Art 4 being at entity level which for cooperative banks is not as relevant as information to the end client re product level information. But there are more issues like this. This creates a situation where our members who initially thought that their timing issues of compliance with the SFDR’s implementation deadline of 10 March 2021 could at least be counteracted by starting to update their systems and documentation based on the Draft RTS, now actually realise that they are farther away from being able to meet the implementation deadline.
The EACB and its members also have concerns:
- regarding inconsistency between the timing and content of the proposed ESG-related amendments in relation to the product governance and suitability rules under MiFID II delegated acts.
- with the different interpretations of similar concepts: adverse impact assessment, ESG risk, Do not significantly harm (DNSH) etc. between the ESA proposals and the Taxonomy
- the lack of consumer testing regarding the proposals for implementing the principle adverse indicators (PAI) and the risk of information overload which we know of MIFID 2
- the one size fits all approach making PAI implementation mandatory without consideration of different business sectors and environments which underestimates the financial risk and return normally analysed under the MIFID II product governance and suitability assessment rules.