In particular, regulators are keen to highlight the potential negative impact that their investment decisions may have on ESG factors. This first regulatory date already imposed requirements on two levels:
Level 2 of these regulations (RTS), which came into force on January1, 2023, defines, completes and specifies the regulatory requirements of Level 1. In particular, it specifies how IAPs are to be taken into account by financial players and products:
According to SFDR regulations, these indicators reflect "the most significant negative impacts of investment decisions on sustainability factors related to environmental, social and personnel issues, respect for human rights and the fight against corruption and bribery"(RTS - SFDR).
In fact, this ambition lies at the heart of the "Double Materiality" concept: being able to integrate ESG risks and impacts into your investment strategy.
However, the players are not very mature on the subject and the legal text raises many questions on their part, such as :
Our ESG experts are questioned daily by market players, as PAIs can be used for reporting purposes or as a genuine strategic compass. In order to clear up this regulatory blur, we offer you a quick regulatory deciphering to remind you of the main milestones, followed by a practical guide to share with you market practices and reflections.
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