Global Trustee and Fiduciary Services Bite-Sized Issue 11 2024

9 QUICK LINKS CULTURE CRYPTOASSETS ELTIFS EMIR FINANCIAL STABILITY BOARD FINTECH MIFID II/MIFIR OPERATIONAL RESILIENCE SUSTAINABILITY T+1 ASIA/PACIFIC EUROPE LUXEMBOURG NORTH AMERICA UNITED KINGDOM Global Trustee and Fiduciary Services Bite-Sized | Issue 11 | 2024 SUSTAINABILITY FCA Publish SDR and Investment Labels Pre-contractual Disclosure Examples On 1 November 2024, the Financial Conduct Authority (FCA) updated its Sustainability Requirements (SDR) and investment labels webpage to include pre-contractual disclosure examples. The FCA states that it provides illustrative examples and approaches across a selection of labels to showcase how applicants can meet these disclosure requirements. The FCA says that much of practice will be relevant across all investment labels, and that these examples are based on the FCA’s experience of applications to date and are non-exhaustive, but are intended to aid applicants as they prepare their documentation. The FCA’s document includes two good practice examples of the Sustainability Focus label, one good practice of the Sustainability Improver label and examples of poor disclosure practices that the FCA says do not meet the SDR requirements. Link to FCA Examples here Link to FCA SDRWebpage here ESAs Publish 2024 Joint Report on PAI Disclosures under the SFDR On 30 October 2024, the European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) published their third annual Report on disclosures of Principal Adverse Impacts (PAIs) under the Sustainable Finance Disclosure Regulation (SFDR). The ESAs state that the Report assesses both entity and product-level PAI disclosures under the SFDR and that these disclosures aim at showing the negative impact of financial institutions’ investments on the environment and people and the actions taken by asset managers, insurers, investment firms, banks and pension funds to mitigate them. The ESAs say that the findings show that financial institutions have improved the accessibility of their PAI disclosures. There has also been positive progress regarding the quality of the information disclosed by financial products, and, in general, in the quality of the PAI statements. Looking forward, the ESAs state that the Report includes recommendations to National Competent Authorities to ensure convergent supervision of financial market participants’ practices, and to the European Commission for their comprehensive assessment on the SFDR. Link to Report here GFANZ Consultation: Nature in Net-Zero Transition Planning Voluntary Guidance On 27 October 2024, the Glasgow Financial Alliance for Net Zero (GFANZ) launched a consultation paper on voluntary, supplemental guidance for how financial institutions can integrate nature considerations in support of net-zero transition planning. GFANZ says that the consultation paper – ‘Nature in Net-Zero Transition Plans’ – builds on and supplements the voluntary recommendations of the existing GFANZ Net-Zero Transition Plan Framework. The proposed guidance in this paper focuses on three main actions: • The reduction of nature-related GHG emissions as per 1.5 degrees-aligned pathways; • The protection and increase of nature-related GHG sinks (natural climate mitigation); • Embedding nature-related considerations into approach and planning. Nature-related levers are additional tools for financial institutions to achieve net-zero commitments and identify further potential net-zero financing opportunities. The consultation is open until 27 January 2025, with the final paper aiming to be released in Q1 2025. Link to Consultation here