From 10 March 2021 onwards, the financial participants will have to identify:
- the sustainability risks of their investment (financial risk) and
- their adverse impacts on the environment (non-financial risk), unless they do not consider them, but then they will have to explain why (except for major participants who will in any case have to identify these impacts as from 30 June 2021).
SFDR (Regulation (EU) 2019/2088) distinguishes between three types of products, subject to different information and reporting requirements:
- products promoting ESG characteristics (without a sustainability objective set),
- "sustainable investments", and
- other financial products.
For all products, the financial participants will have to explain how they consider sustainability risks (or why they do not consider them). The information and reporting requirements are specified in regulatory technical standards to be adopted by the Commission. Draft technical standards are already available.