Commission Delegated Regulation (EU) 2022/1288 of 6 April 2022 supplementing Regulation (EU) 2019/2088

For the purposes of this Regulation, the following definitions apply:

(1) ‘financial undertaking’ means an AIFM as defined in Article 4(1), point (b), of Directive 2011/61/EU of the European Parliament and of the Council (1), a management company as defined in Article 2(1), point (b), of Directive 2009/65/EC of the European Parliament and of the Council (2), an investment company authorised in accordance with Articles 27, 28 and 29 of Directive 2009/65/EC that has not designated for its management a management company authorised in accordance with Articles 6, 7 and 8 of that Directive, a credit institution as defined in Article 4(1), point (1), of Regulation (EU) No 575/2013 of the European Parliament and of the Council (3), an investment firm as defined in Article 4(1), point (2), of Regulation (EU) No 575/2013, an insurance undertaking as defined in Article 13, point (1), of Directive 2009/138/EC of the European Parliament and of the Council (4), a reinsurance undertaking as defined in Article 13, point (4), of Directive 2009/138/EC, or any third country entity that carries out similar activities, is subject to the laws of a third country and is supervised by a third-country supervisory authority;

(2) ‘non-financial undertaking’ means an undertaking that is not a financial undertaking as defined in point (1);

(3) ‘sovereign exposure’ means an exposure to central governments, central banks and supranational issuers;

(4) ‘environmentally sustainable economic activity’ means an economic activity that complies with the requirements laid down in Article 3 of Regulation (EU) 2020/852;

(5) ‘transitional economic activity’ means an economic activity that complies with the requirements laid down in Article 10(2) of Regulation (EU) 2020/852;

(6) ‘enabling economic activity’ means an economic activity that complies with the requirements laid down in Article 16 of Regulation (EU) 2020/852.

1. Financial market participants and financial advisers shall provide the information required by this Regulation free of charge and in a manner that is easily accessible, non-discriminatory, prominent, simple, concise, comprehensible, fair, clear and not misleading. Financial market participants and financial advisers shall present and lay out the information required by this Regulation in a way that is easy to read, use characters of readable size and use a style that facilitates its understanding. Financial market participants may adapt size and font type of characters and colours used in the templates set out in Annexes I to V to this Regulation.

2. Financial market participants and financial advisers shall provide the information required by this Regulation in a searchable electronic format, unless otherwise required by the sectoral legislation referred to in Article 6(3) and Article 11(2) of Regulation (EU) 2019/2088.

3. Financial market participants and financial advisers shall keep the information published on their websites in accordance with this Regulation up to date. They shall clearly mention the date of publication of the information and the date of any update. Where that information is presented as a downloadable file, financial market participants and financial advisers shall indicate the version history in the file name.

4. Financial market participants and financial advisers shall provide, where available, legal entity identifiers (LEIs) and international securities identification numbers (ISINs) when referring to entities or financial products in the information provided in accordance with this Regulation.

Where an index designated as a reference benchmark is made up of a basket of indexes, financial market participants and financial advisers shall provide the information relating to that index in respect of that basket and of each index in that basket.

1. By 30 June each year, the financial market participants referred to in Article 4(1), point (a), of Regulation (EU) 2019/2088, or Article 4(3) or Article 4(4) of that Regulation, shall publish on their website, in a separate section titled: ‘Statement on principal adverse impacts of investment decisions on sustainability factors’, the information referred to in Article 4(1), point (a), of Regulation (EU) 2019/2088, in Article 4(2), (3) and (4) of that Regulation, and in Articles 4 to 10 of this Regulation. That information shall cover the period of 1 January until 31 December of the preceding year, and shall be published in the section ‘Sustainability-related disclosures’ referred to in Article 23 of this Regulation.

2. Financial market participants shall publish the statement referred to in paragraph 1 in the format of the template set out in Table 1 of Annex I.

3. By way of derogation from paragraph 1, for financial market participants that publish the statement referred to in Article 4(1), point (a), of Regulation (EU) 2019/2088, or Article 4(3) or Article 4(4) of that Regulation for the first time, the information referred to in paragraph 1 shall cover the period from the date on which the principal adverse impacts of investment decisions on sustainability factors were first considered until 31 December of that year. Those financial market participants shall publish the information in the statement referred to in paragraph 1 by 30 June of the following year.

In the summary section in Table 1 of Annex I, financial market participants shall include all of the following:

(a) the name of the financial market participant to which the adverse sustainability impacts statement relates;

(b) the fact that principal adverse impacts on sustainability factors are considered;

(c) the reference period of the statement;

(d) a summary of the principal adverse impacts.

The summary section in Table 1 of Annex I shall be drafted in all of the following languages:

(a) one of the official languages of the home Member State of the financial market participant and, where different, in an additional language customary in the sphere of international finance;

(b) where a financial product of the financial market participant is made available in a host Member State, one of the official languages of that host Member State.

The summary section shall be of a maximum length of two sides of A4-sized paper when printed.

1. In the section ‘Description of the principal adverse impacts on sustainability factors’ in Table 1 of Annex I, financial market participants shall complete all the fields that relate to the indicators related to principal adverse impacts of their investment decisions on sustainability factors, and they shall add all of the following:(a) information on one or more additional climate and other environment-related indicators, as set out in Table 2 of Annex I;(b) information on one or more additional indicators for social and employee matters, respect for human rights, anti-corruption and anti-bribery matters, as set out in Table 3 of Annex I;(c) information on any other indicators used to identify and assess additional principal adverse impacts on a sustainability factor.

2. In the section ‘Description of the principal adverse impacts on sustainability factors’ in Table 1 of Annex I, financial market participants shall describe the actions taken during the period from 1 January to 31 December of the preceding year and actions planned or targets set for the subsequent period from 1 January to 31 December to avoid or reduce the principal adverse impacts identified.

3. Financial market participants shall include in the columns ‘Impact’ in the section ‘Description of the principal adverse impacts on sustainability factors’ in Table 1 of Annex I a figure on impact as the average of impacts on 31 March, 30 June, 30 September and 31 December of each period from 1 January to 31 December.

1. In the section ‘Description of policies to identify and prioritise principal adverse impacts on sustainability factors’ in Table 1 of Annex I, financial market participants shall describe their policies to identify and prioritise principal adverse impacts on sustainability factors and how those policies are kept up to date and applied, including all of the following:(a) the date on which the governing body of the financial market participant approved those policies;(b) how the responsibility for the implementation of those policies within organisational strategies and procedures is allocated;(c) the methodologies to select the indicators referred to in Article 6(1), points (a), (b) and (c), and to identify and assess the principal adverse impacts referred to in Article 6(1), and in particular an explanation of how those methodologies take into account the probability of occurrence and the severity of those principal adverse impacts, including their potentially irremediable character;(d) any associated margin of error within the methodologies referred to in point (c) of this paragraph, with an explanation of that margin;(e) the data sources used.

2. Where information relating to any of the indicators used is not readily available, financial market participants shall include in the section ‘Description of policies to identify and prioritise principal adverse impacts on sustainability factors’ in Table 1 of Annex I details of the best efforts used to obtain the information either directly from investee companies, or by carrying out additional research, cooperating with third party data providers or external experts or making reasonable assumptions.

1. In the section ‘Engagement policies’ in Table 1 of Annex I, financial market participants shall provide all of the following information:(a) where applicable, brief summaries of the engagement policies referred to in Article 3g of Directive 2007/36/EC of the European Parliament and of the Council (5);(b) brief summaries of any other engagement policies to reduce principal adverse impacts.2. The brief summaries referred to in paragraph 1 shall describe all of the following:(a) the indicators for adverse impacts considered in the engagement policies referred to in paragraph 1;(b) how those engagement policies will be adapted where there is no reduction of the principal adverse impacts over more than one period reported on.

1. In the section ‘References to international standards’ in Table 1 of Annex I, financial market participants shall describe whether and to what extent they adhere to responsible business conduct codes and internationally recognised standards for due diligence and reporting and, where relevant, the degree of their alignment with the objectives of the Paris Agreement.

2. The description referred to in paragraph 1 shall contain information about all of the following:(a) the indicators used to consider the principal adverse impacts on sustainability factors referred to in Article 6(1) that measure the adherence or alignment referred to in paragraph 1;(b) the methodology and data used to measure the adherence or alignment referred to in paragraph 1, including a description of the scope of coverage, data sources, and how the methodology used forecasts the principal adverse impacts of investee companies;(c) whether a forward-looking climate scenario is used, and, if so, the name and provider of that scenario and when it was designed;(d) where no forward-looking climate scenario is used, an explanation of why the financial market participant does consider forward-looking climate scenarios to be irrelevant.

Financial market participants that have described the adverse impacts on sustainability factors for a period preceding the period for which information is to be disclosed in accordance with Article 6 shall provide in the section ‘Description of principal adverse impacts on sustainability factors’ in Table 1 of Annex I a historical comparison of the period reported on with the previous period reported on and, subsequently, with every previous period reported on up to the last five previous periods.

1. The financial advisers referred to in Article 2, point (11), points (a) and (b), of Regulation (EU) 2019/2088 that apply Article 4(5), point (a), of that Regulation shall publish the information referred to in Article 4(5), point (a), of that Regulation in a separate section of their website titled, ‘Statement on principal adverse impacts of insurance advice on sustainability factors’.

2. The financial advisers referred to in Article 2, point (11), points (c) to (f), of Regulation (EU) 2019/2088 and apply Article 4(5), point (a), of that Regulation shall publish the information referred to in Article 4(5), point (a), of that Regulation in a separate section of their websites titled, ‘Statement on principal adverse impacts of investment advice on sustainability factors’.

3. The statement and information referred to in paragraphs 1 and 2 shall contain details on the process used by financial advisers to select the financial products they advise on, including all of the following:(a) how the financial advisers use the information published by financial market participants pursuant to this Regulation;(b) whether the financial advisers rank and select financial products based on the indicators listed in Table 1 of Annex I and any additional indicators and, where applicable, a description of the ranking and selection methodology used;(c) any criteria or thresholds based on the principal adverse impacts listed in Table 1 of Annex I that are used to select, or advise on, financial products.

1. Financial market participants referred to in Article 4(1), point (b), of Regulation (EU) 2019/2088 shall publish the information referred to in Article 4(1), point (b), of that Regulation in a separate section of their website titled ‘No consideration of adverse impacts of investment decisions on sustainability factors’.

2. The statement referred to in paragraph 1 shall contain all of the following:(a) a prominent statement that the financial market participant does not consider any adverse impacts of its investment decisions on sustainability factors;(b) the reasons why the financial market participant does not consider any adverse impacts of its investment decisions on sustainability factors and, where relevant, information on whether the financial market participant intends to consider such adverse impacts by reference to the indicators listed in Table 1 of Annex I, and if so, when.

1. The financial advisers referred to in Article 2, point (11), points (a) and (b), of Regulation (EU) 2019/2088 that apply Article 4(5), point (b), of that Regulation shall publish the information referred to in Article 4(5), point (b), of that Regulation in a separate section of their website titled ‘No consideration of adverse impacts of insurance advice on sustainability factors’.

2. The financial advisers referred to in Article 2, point (11), points (c) to (f), of Regulation (EU) 2019/2088 that apply Article 4(5), point (b), of that Regulation shall publish the information referred to in Article 4(5), point (b), of that Regulation in a separate section of their website titled ‘No consideration of adverse impacts of investment advice on sustainability factors’.

3. The statement and information referred to in paragraphs 1 and 2 shall contain all of the following:(a) a prominent statement that the financial adviser does not consider any adverse impacts of investment decisions on sustainability factors in its investment or insurance advice;(b) the reasons why the financial adviser does not consider any adverse impacts of investment decisions on sustainability factors in its investment or insurance advice and, where relevant, information on whether the financial adviser intends to consider such adverse impacts by reference to the indicators listed in Table 1 of Annex I, and if so, when.

1. Financial market participants shall present the information to be disclosed pursuant to Article 8(1), (2) and (2a) of Regulation (EU) 2019/2088 in the format of the template set out in Annex II to this Regulation. That information shall be attached as an annex to the documents or the information referred to in Article 6(3) of Regulation (EU) 2019/2088.

2. Financial market participants shall include in the main body of the documents or information referred to in Article 6(3) of Regulation (EU) 2019/2088 a prominent statement that information about the environmental or social characteristics is available in the annex to those documents or that information.

3. Financial market participants shall provide at the beginning of the annex to the documents or the information referred to in Article 6(3) of Regulation (EU) 2019/2088 all of the following information:(a) whether the financial product intends to make any sustainable investments;(b) whether the financial product promotes environmental or social characteristics, without having as its objective a sustainable investment.

1. For the financial products referred to in Article 6, first subparagraph, of Regulation (EU) 2020/852, financial market participants shall provide, in the section ‘To what minimum extent are sustainable investments with an environmental objective aligned with the EU Taxonomy?’ in the template set out in Annex II, all of the following:(a) a graphical representation in the form of a pie chart of:(i) the degree to which the aggregated investments are investments in environmentally sustainable economic activities, as calculated in accordance with Article 17(1) to (4) of this Regulation;(ii) the degree to which the aggregated investments, excluding sovereign exposures, are investments in environmentally sustainable economic activities, as calculated in accordance with Article 17(5) of this Regulation;(b) a description of the investments underlying the financial products that are in environmentally sustainable economic activities, including whether the compliance of those investments with the requirements laid down in Article 3 of Regulation (EU) 2020/852 will be subject to an assurance provided by one or more auditors or a review by one or more third parties and, if so, the name or the names of the auditor or third party;(c) where the financial products invest in economic activities other than environmentally sustainable economic activities, a clear explanation of the reasons for doing so;(d) where the financial products have sovereign exposures and the financial market participant cannot assess the extent to which those exposures contribute to environmentally sustainable economic activities, a narrative explanation of the proportion in total investments of investments that consist of those exposures.

2. For the purposes of paragraph 1, point (a), financial market participants shall use:(a) the same key performance indicator for the aggregated investments in non-financial undertakings;(b) the same key performance indicator for the aggregated investments in the same type of financial undertakings.For insurance and reinsurance undertakings that carry out non-life underwriting activities, the key performance indicator may combine the investment and the underwriting key performance indicators in accordance with Article 6 of Delegated Regulation (EU) 2021/2178.

3. For the purposes paragraph 1, point (b), the description shall include all of the following:(a) in respect of investee companies that are non-financial undertakings, whether the degree to which the investments are in environmentally sustainable economic activities is measured by turnover, or whether, due to the features of the financial product, the financial market participant has decided that a more representative calculation is given when that degree is measured by capital expenditure or operating expenditure and the reason for that decision, including an explanation of why that decision is appropriate for investors in the financial product;(b) where information about the degree to which the investments are in environmentally sustainable economic activities is not readily available from public disclosures by investee companies, details of whether the financial market participant obtained equivalent information directly from investee companies or from third party providers;(c) a breakdown of the minimum proportions of investments in the transitional economic activities and in the enabling economic activities, in each case expressed as a percentage of all investments of the financial product.

For financial products that promote environmental or social characteristics and that include a commitment in sustainable investments with a social objective, financial market participants shall include in the section ‘What is the asset allocation planned for this financial product?’ in the template set out in Annex II the minimum share of those sustainable investments.

1. The degree to which investments are in environmentally sustainable economic activities shall be calculated in accordance with the following formula:where ‘investments of the financial product in environmentally sustainable economic activities’ shall be the sum of the market values of the following investments of the financial product:(a) for debt securities and equities of investee companies, where a proportion of activities of those investee companies is associated with environmentally sustainable economic activities, the market value of that proportion of those debt securities or equities;(b) for debt securities other than those referred to in point (a), where a proportion of the proceeds is required by the terms of those debt securities to be used exclusively on environmentally sustainable economic activities, the market value of that proportion;(c) for bonds issued under Union legislation on environmentally sustainable bonds, the market value of those bonds;(d) for investments in real estate assets which qualify as environmentally sustainable economic activities, the market value of those investments;(e) for investments in infrastructure assets which qualify as environmentally sustainable economic activities, the market value of those investments;(f) for investments in securitisation positions as defined in Article 2, point (19), of Regulation (EU) 2017/2402 of the European Parliament and of the Council (6) with underlying exposures in environmentally sustainable economic activities, the market value of the proportion of those exposures;(g) for investments in financial products as referred to in Article 5, first paragraph, and Article 6, first paragraph, of Regulation (EU) 2020/852, the market value of the proportion of those financial products representing the degree to which investments are in environmentally sustainable economic activities, as calculated in accordance with this Article.The degree to which investments are into environmentally sustainable economic activities shall be calculated by applying the methodology used to calculate net short positions laid down in Article 3(4) and (5) of Regulation (EU) No 236/2012 of the European Parliament and of the Council (7).

2. For the purposes of paragraph 1, point (a), the proportion of activities of investee companies associated with environmentally sustainable economic activities shall be calculated on the basis of the most appropriate key performance indicators for the investments of the financial product using the following information:(a) for the investee companies referred to in Article 8(1) and (2) of Regulation (EU) 2020/852, the disclosures made by those investee companies in accordance with that Article;(b) for other investee companies, equivalent information obtained by the financial market participant directly from investee companies or from third party providers.

3. For the disclosures referred to in Article 15(1), point (a), and Article 19(1), point (a), in the case of investee companies that are non-financial undertakings that are subject to the obligation to publish non-financial information pursuant to Delegated Regulation (EU) 2021/2178 and other non-financial undertakings that are not subject to that obligation, the calculation referred to in paragraph 2 shall use turnover as the same type of key performance indicator for all non-financial undertakings.

4. By way of derogation from paragraph 3, where, due to the features of the financial product, capital expenditure or operating expenditure gives a more representative calculation of the degree to which an investment is into environmentally sustainable economic activities, the calculation may use the most appropriate of those two key performance indicators. In the case of investee companies that are financial undertakings subject to Article 8(1) of Regulation (EU) 2020/852 and for other financial undertakings that are not subject to that obligation, the calculation referred to in paragraph 2 shall use the key performance indicators referred to in Section 1.1, points (b) to (e), of Annex III to Delegated Regulation (EU) 2021/2178.

5. For the disclosures referred to in Article 15(1), point (a)(ii), Article 19(1), point (a)(ii), Article 55(1), point (b)(iii) and Article 62(1), point (b)(iii), paragraphs 1 to 4 of this Article shall apply, except that the sovereign exposures shall be excluded from the calculation of the numerator and of the denominator of the formula contained in paragraph 1.

1. Financial market participants shall present the information to be disclosed pursuant to Article 9(1) to (4a) of Regulation (EU) 2019/2088 and this Section in an annex to the document or the information referred to in Article 6(3) of Regulation (EU) 2019/2088. They shall present that information in the format of the template set out in Annex III to this Regulation.

2. Financial market participants shall include in the main body of the document or the information referred to in Article 6(3) of Regulation (EU) 2019/2088 a prominent statement that information about sustainable investment is available in the annex.

3. Financial market participants shall include at the beginning of the annex to the document or the information referred to in Article 6(3) of Regulation (EU) 2019/2088 a statement that the financial product has sustainable investment as its objective.

1. For the financial products referred to in Article 5, first paragraph, of Regulation (EU) 2020/852, financial market participants shall include in the section ‘What is the asset allocation and the minimum share of sustainable investments?’ in the template set out in Annex III all of the following information:(a) a graphical representation in the form of a pie chart:(i) in accordance with Article 15(1), point (a)(i), of this Regulation;(ii) in accordance with Article 15(1), point (a)(ii), of this Regulation;(b) a description in accordance with Article 15(1), point (b), of this Regulation;(c) where the financial products invest in economic activities that contribute to an environmental objective and the economic activities are not environmentally sustainable economic activities, a clear explanation of the reasons for doing so;(d) where the financial products have sovereign exposures and the financial market participant cannot assess the extent to which those exposures contribute to environmentally sustainable economic activities, a narrative explanation of the proportion in total investments of investments that consist of those exposures.

2. For the purposes of paragraph 1, point (a), financial market participants shall apply Article 15(2).

3. For the purposes of paragraph 1, point (b), financial market participants shall apply Article 15(3).

4. For financial products that invest in an economic activity that contributes to a social objective, financial market participants shall include in the section ‘What is the asset allocation and the minimum share of sustainable investments?’ in the template set out in Annex III the minimum share of those investments.

1. By way of derogation from Articles 14 to 17, where a financial product offers investment options to the investor and one or more of those investment options qualify that financial product as a financial product that promotes environmental or social characteristics, financial market participants shall insert in the main body of the document or information referred to in Article 6(3) of Regulation (EU) 2019/2088 a prominent statement confirming all of the following:(a) that the financial product promotes environmental or social characteristics;(b) that those environmental or social characteristics will only be met where the financial product invests in at least one of the investment options mentioned in the list referred to in paragraph 2, point (a), of this Article and that at least one of those options is kept during the holding period of the financial product;(c) that further information about those characteristics is available in the Annexes referred to in paragraph 3 of this Article or, where relevant, through the references referred to in paragraph 5 of this Article.

2. The prominent statement referred to in paragraph 1 shall be accompanied by all of the following:(a) a list of the investment options referred to in paragraph 3, presented in accordance with the categories of investment options referred to in points (a), (b) and (c) of that paragraph;(b) the proportions of investment options within each of the categories referred to in paragraph 3, points (a), (b) and (c), relative to the total number of investment options offered by the financial product.

3. Financial market participants shall provide all of the following information in annexes to the document or information referred to in Article 6(3) of Regulation (EU) 2019/2088 for the following categories of investment options:(a) for each investment option that qualifies as a financial product that promotes environmental or social characteristics, the information referred to in Articles 14 to 17 of this Regulation;(b) for each investment option that qualifies as a financial product that has sustainable investment as its objective, the information referred to in Articles 18 and 19 of this Regulation;(c) for each investment option that has sustainable investment as its objective and is not a financial product, information on the objective of sustainable investment.

4. Financial market participants shall present the information referred to in paragraph 3, point (a), in the form of the template set out in Annex II and the information referred to in paragraph 3, point (b), in the form of the template set out in Annex III.

5. By way of derogation from paragraph 3, where a financial product offers a range of investment options to the investor such that the information about those investment options cannot be provided in annexes to the document or information referred to in Article 6(3) of Regulation (EU) 2019/2088 in a clear and concise manner due to the number of annexes required, financial market participants may provide the information referred to in paragraph 3 of this Article by including in the main body of the document or information referred to in Article 6(3) of Regulation (EU) 2019/2088 references to the annexes to the disclosures required by the directives, regulations and national provisions referred to in that paragraph where that information can be found.

1. By way of derogation from Articles 18 and 19, where a financial product offers investment options to the investor and those investment options all have sustainable investment as their objectives, financial market participants shall confirm in a prominent statement in the main body of the document or information referred to in Article 6(3) of Regulation (EU) 2019/2088 that the financial product has as its objective sustainable investment and that the information related to that objective is available in the annexes to the document or information referred to in Article 6(3) of Regulation (EU) 2019/2088 or, where relevant, through the references referred to in paragraph 5 of this Article.

2. The prominent statement referred to in paragraph 1 shall be accompanied by all of the following:(a) a list of the investment options referred to in paragraph 3 presented in accordance with the categories of investment options referred to in points (a) and (b) of that paragraph;(b) the proportions of each of the categories of investment options referred to in paragraph 3, points (a) and (b), within each of those categories relative to the total number of investment options offered by the financial product.

3. Financial market participants shall provide all of the following information in annexes to the document or information referred to in Article 6(3) of Regulation (EU) 2019/2088 for the following categories of investment options:(a) for each investment option that qualifies as a financial product that has sustainable investment as its objective, the information referred to in Articles 18 and 19 of this Regulation;(b) for each investment option that has sustainable investment as its objective and is not a financial product, the information on the objective of sustainable investment.

4. Financial market participants shall present the information referred to in paragraph 3, point (a), in accordance with the template set out in Annex III.

5. By way of derogation from paragraph 3, where a financial product offers a range of investment options to the investor such that the information relating to those investment options cannot be provided in annexes to the document or information referred to in Article 6(3) of Regulation (EU) 2019/2088 in a clear and concise manner due to the number of annexes required, financial market participants may provide the information referred to in paragraph 3 of this Article by including in the main body of the document or information referred to in Article 6(3) of Regulation (EU) 2019/2088 references to the annexes of the applicable disclosures required by directives, regulations and national provisions referred to in that paragraph where that information can be found.

The information on the objective of the sustainable investments referred to in Article 20(3), point (c), and Article 21(3), point (b), shall contain all of the following:

(a) a description of the sustainable investment objective;

(b) a list of the indicators used to measure the attainment of that sustainable investment objective;

(c) a description of how the investments do not significantly harm any of the sustainable investment objectives, including all of the following: (i) how the indicators for adverse impacts in Table 1 of Annex I and any relevant indicators in Tables 2 and 3 of that Annex, are taken into account; (ii) whether the sustainable investment is aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, including the principles and rights set out in the eight fundamental conventions identified in the Declaration of the International Labour Organisation on Fundamental Principles and Rights at Work and the International Bill of Human Rights.

Financial market participants shall, for each financial product, publish the information referred to in Article 10(1) of Regulation (EU) 2019/2088 in a separate section titled, ‘Sustainability-related disclosures’, in the same part of their website as the other information relating to the financial product, including marketing communications. Financial market participants shall clearly identify the financial product to which the information in the sustainability-related disclosure section relates and prominently display the environmental or social characteristics or the sustainable investment objective of that financial product.

For financial products that promote environmental or social characteristics, financial market participants shall publish the information referred to in Article 10(1) of Regulation (EU) 2019/2088 and Articles 25 to 36 of this Regulation in the following order and made up of all of the following sections titled:

(a) ‘Summary’;

(b) ‘No sustainable investment objective’;

(c) ‘Environmental or social characteristics of the financial product’;

(d) ‘Investment strategy’;

(e) ‘Proportion of investments’;

(f) ‘Monitoring of environmental or social characteristics’;

(g) ‘Methodologies’;

(h) ‘Data sources and processing’;

(i) ‘Limitations to methodologies and data’;

(j) ‘Due diligence’;

(k) ‘Engagement policies’;

(l) where an index is designated as a reference benchmark to attain the environmental or social characteristics promoted by the financial product, ‘Designated reference benchmark’.

1. In the website section ‘Summary’ referred to in Article 24, point (a), financial market participants shall summarise all the information contained in the different sections referred to in that Article about the financial products that promote environmental or social characteristics. The summary section shall have a maximum length of two sides of A4-sized paper when printed.

2. The website section ‘Summary’ referred to in Article 24, point (a), shall be provided in at least the following languages:(a) one of the official languages of the home Member State and, where different and where the financial product is made available in more than one Member State, in an additional language customary in the sphere of international finance;(b) where the financial product is made available in a host Member State, one of the official languages of that host Member State.

1. In the website section ‘No sustainable investment objective’ referred to in Article 24, point (b), financial market participants shall insert the following statement: “This financial product promotes environmental or social characteristics, but does not have as its objective sustainable investment.”

2. Where the financial product commits to making one or more sustainable investments, financial market participants shall in the website section ‘No sustainable investment objective’ referred to in Article 24, point (b), explain how the sustainable investment does not significantly harm any of the sustainable investment objectives, including all of the following:(a) how the indicators for adverse impacts in Table 1 of Annex I, and any relevant indicators in Tables 2 and 3 of that Annex I, are taken into account;(b) whether the sustainable investment is aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, including the principles and rights set out in the eight fundamental conventions identified in the Declaration of the International Labour Organisation on Fundamental Principles and Rights at Work and the International Bill of Human Rights.

In the website section ‘Environmental or social characteristics of the financial product’ referred to in Article 24, point (c), financial market participants shall describe the environmental or social characteristics that the financial products promotes.

In the website section ‘Investment strategy’ referred to in Article 24, point (d), financial market participants shall describe all of the following:

(a) the investment strategy used to meet the environmental or social characteristics promoted by the financial product;

(b) the policy to assess good governance practices of the investee companies, including with respect to sound management structures, employee relations, remuneration of staff and tax compliance.

In the website section ‘Proportion of investments’ referred to in Article 24, point (e), financial market participants shall insert the information referred to in Article 14 and shall distinguish between direct exposures in investee entities and all other types of exposures to those entities.

In the website section ‘Monitoring of environmental or social characteristics’ referred to in Article 24, point (f), financial market participants shall describe how the environmental or social characteristics promoted by the financial product and the sustainability indicators used to measure the attainment of each of those environmental or social characteristics promoted by the financial product are monitored throughout the lifecycle of the financial product and the related internal or external control mechanisms.

In the website section ‘Methodologies for environmental or social characteristics’ referred to in Article 24, point (g), financial market participants shall describe the methodologies to measure how the social or environmental characteristics promoted by the financial product are met.

In the website section ‘Data sources and processing’ referred to in Article 24, point (h), financial market participants shall describe all of the following:

(a) the data sources used to attain each of the environmental or social characteristics promoted by the financial product;

(b) the measures taken to ensure data quality;

(c) how data are processed;

(d) the proportion of data that are estimated.

In the website section ‘Limitations to methodologies and data’ referred to in Article 24, point (i), financial market participants shall describe all of the following:

(a) any limitations to the methodologies referred to in Article 24, point (g), and to the data sources referred to in Article 24, point (h);

(b) how such limitations do not affect how the environmental or social characteristics promoted by the financial product are met.

In the website section ‘Due diligence’ referred to in Article 24, point (j), financial market participants shall describe the due diligence carried out on the underlying assets of the financial product, including the internal and external controls on that due diligence.

In the website section ‘Engagement policies’ referred to in Article 24, point (k), financial market participants shall describe the engagement policies implemented where engagement is part of the environmental or social investment strategy, including any management procedures applicable to sustainability-related controversies in investee companies.

1. In the website section ‘Designated reference benchmark’ referred to in Article 24, point (l), financial market participants shall describe whether an index has been designated as a reference benchmark to meet the environmental or social characteristics promoted by the financial product, and how that index is aligned with the environmental or social characteristics promoted by the financial product, including the input data, the methodologies used to select those data, the rebalancing methodologies and how the index is calculated.

2. Where part or all of the information referred to in paragraph 1 is published on the website of the administrator of the reference benchmark, a hyperlink shall be provided to that information.

For financial products that have sustainable investments as their objective, financial market participants shall publish the information referred to in Article 10(1) of Regulation (EU) 2019/2088 and Articles 38 to 49 of this Regulation in the following order and made up of all of the following sections titled:

(a) ‘Summary’;

(b) ‘No significant harm to the sustainable investment objective’;

(c) ‘Sustainable investment objective of the financial product’;

(d) ‘Investment strategy’;

(e) ‘Proportion of investments’;

(f) ‘Monitoring of sustainable investment objective’;

(g) ‘Methodologies’;

(h) ‘Data sources and processing’;

(i) ‘Limitations to methodologies and data’;

(j) ‘Due diligence’;

(k) ‘Engagement policies’;

(l) ‘Attainment of the sustainable investment objective’.

1. In the website section ‘Summary’ referred to in Article 37, point (a), financial market participants shall summarise all the information contained in the different sections referred to in that Article 37about the financial products that have sustainable investment as their objective. The summary section shall have a maximum length of two sides of A4-sized paper when printed.

2. The website section ‘Summary’ referred to in Article 37, point (a), shall be provided in at least the following languages:(a) one of the official languages of the home Member State and, where different and where the financial product is made available in more than one Member State, in an additional language customary in the sphere of international finance;(b) where the financial product is made available in a host Member State, one of the official languages of that host Member State.

In the website section ‘No significant harm to the sustainable investment objective’ referred to in Article 37, point (b), financial market participants shall explain whether and why the investments of the financial product do not significantly harm any of the sustainable investment objectives, and provide all of the following information:

(a) how the indicators for adverse impacts in Table 1 of Annex I, and any relevant indicators in Tables 2 and 3 of that Annex, are taken into account;

(b) whether the sustainable investment is aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, including the principles and rights set out in the eight fundamental conventions identified in the Declaration of the International Labour Organisation on Fundamental Principles and Rights at Work and the International Bill of Human Rights.

In the website section ‘Sustainable investment objective of the financial product’ referred to in Article 37, point (c), financial market participants shall describe the sustainable investment objective of the financial product.

In the website section ‘Investment strategy’ referred to in Article 37, point (d), financial market participants shall describe all of the following:

(a) the investment strategy used to attain the sustainable investment objective;

(b) the policy to assess good governance practices of the investee companies, including with respect to sound management structures, employee relations, remuneration of staff and tax compliance.

In the website section ‘Proportion of investments’ referred to in Article 37, point (e), financial market participants shall insert the information referred to in the section ‘What is the asset allocation and the minimum share of sustainable investments?’ in the template set out in Annex III to this Regulation and shall distinguish between direct exposures in investee entities and all other types of exposures to those entities.

In the website section ‘Monitoring of the sustainable investment objective’ referred to in Article 37, point (f), financial market participants shall describe how the sustainable investment objective and the sustainability indicators used to measure the attainment of the sustainable investment objective are monitored throughout the lifecycle of the financial product and the related internal or external control mechanisms.

In the website section ‘Methodologies’ referred to in Article 37, point (g), financial market participants shall describe the methodologies used to measure the attainment of the sustainable investment objective and how the sustainability indicators to measure the attainment of that sustainable investment objective are used.

In the website section ‘Data sources and processing’ referred to in Article 37, point (h), financial market participants shall describe all of the following:

(a) the data sources used to attain the sustainable investment objective of the financial product;

(b) the measures taken to ensure data quality;

(c) how data are processed;

(d) the proportion of data that are estimated.

In the website section ‘Limitation to methodologies and data’ referred to in Article 37, point (i), financial market participants shall describe all of the following:

(a) any limitations to the methodologies referred to in Article 37, point (g), and the data sources referred to in Article 37, point (h);

(b) why such limitations do not affect the attainment of the sustainable investment objective.

In the website section ‘Due diligence’ referred to in Article 37, point (j), financial market participants shall describe the due diligence carried out on the underlying assets of the financial product, including the internal and external controls on that due diligence.

In the website section ‘Engagement policies’ referred to in Article 37, point (k), financial market participants shall describe the engagement policies implemented where engagement is part of the sustainable investment objective, including any management procedures applicable to sustainability-related controversies in investee companies.

1. In the website section ‘Attainment of the sustainable investment objective’ referred to in Article 37, point (l), financial market participants shall describe all of the following:(a) for financial products that have sustainable investment as their objective and for which an index has been designated as a reference benchmark, how that index is aligned with the sustainable investment objective of the financial product, including the input data, the methodologies used to select those data, the rebalancing methodologies and how the index is calculated;(b) for financial products that have a reduction in carbon emissions as their objective, a statement that the reference benchmark qualifies as an EU Climate Transition Benchmark or an EU Paris-aligned Benchmark as defined in Article 3, points (23a) and (23b), of Regulation (EU) 2016/1011, and a hyperlink to where the methodology used for the calculation of those benchmarks can be found.

2. By way of derogation from paragraph 1, point (a), where the information referred to in that point is published on the website of the administrator of the reference benchmark, a hyperlink shall be provided to that information.

3. By way of derogation from paragraph 1, point (b), where no EU Climate Transition Benchmark or EU Paris-aligned Benchmark as defined in in Article 3, points (23a) and (23b), of Regulation (EU) 2016/1011 is available, the website section ‘Attainment of the sustainable investment objective’ referred to in Article 38, point (l), of this Regulation shall mention that fact and explain how the continued effort of attaining the objective of reducing carbon emissions is ensured in view of achieving the objectives of the Paris Agreement. Financial market participants shall explain the extent to which the financial product complies with the methodological requirements set out in Delegated Regulation (EU) 2020/1818.

1. For financial products that promote environmental or social characteristics, financial market participants shall present the information referred to in Article 11(1) of Regulation (EU) 2019/2088 in an annex to the document or information referred to in Article 11(2) of that Regulation in the form of the template set out in Annex IV to this Regulation.

2. Financial market participants shall include in the main body of the document or information referred to in Article 11(2) of Regulation (EU) 2019/2088 a prominent statement that information on the environmental or social characteristics is available in that annex.

In the section ‘To what extent were the environmental and/or social characteristics promoted by this financial product met?’ in the template set out in Annex IV to this Regulation, financial market participants shall provide all of the following information:

(a) the extent to which the environmental or social characteristics promoted by the financial product were met during the period covered by the periodic report, including the performance of the sustainability indicators used to measure how each of those environmental or social characteristics are met and which derivatives, if any, have been used to meet those environmental or social characteristics;

(b) for the financial products referred to in Article 6, first paragraph, of Regulation (EU) 2020/852, an identification of the environmental objectives set out in Article 9 of that Regulation to which the sustainable investment underlying the financial product contributed;

(c) where the financial market participant has provided at least one previous periodic report in accordance with this Section for the financial product, a historical comparison between the period covered by the periodic report and periods covered by previous periodic reports;

(d) for financial products that included a commitment to make sustainable investments, an explanation of how those investments have contributed to the sustainable investment objectives referred to in Article 2, point (17), of Regulation (EU) 2019/2088 and have not harmed significantly any of those objectives during the period covered by the periodic report, including all of the following: (i) how the indicators for adverse impacts in Table 1 of Annex I, and any relevant indicators in Tables 2 and 3 of that Annex, were taken into account; (ii) whether the sustainable investment was aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, including the principles and rights set out in the eight fundamental conventions identified in the Declaration of the International Labour Organisation on Fundamental Principles and Rights at Work and the International Bill of Human Rights;

(e) information on principal adverse impacts on sustainability factors as referred to in the section ‘Does this financial product consider principal adverse impacts on sustainability factors?’ in the template set out in Annex II to this Regulation.

1. The section ‘What were the top investments of this financial product?’ in the template set out in Annex IV to this Regulation shall contain a list, in descending order of size, of the fifteen investments constituting the largest proportion of investments of the financial product during the period covered by the periodic report, including the sector and countries in which those investments were made.

2. By way of derogation from paragraph 1, where the number of investments constituting fifty percent of the investments of the financial product during the period covered by the periodic report is less than fifteen, the section referred to in paragraph 1 shall contain a list of those investments, in descending order of size, including the sectors and countries in which those investments were made.

In the section ‘What was the asset allocation?’ in the template set out in Annex IV to this Regulation, financial market participants shall provide a description of the investments of the financial product, including all of the following:

(a) the proportions of the investments of the financial product that attained the promoted environmental or social characteristics during the period covered by the periodic report;

(b) the purpose of the remainder of the investments during the period covered by the periodic report, including a description of any minimum environmental or social safeguards and whether those investments are used for hedging, relate to cash held as ancillary liquidity or are investments for which there are insufficient data.

In the section ‘In which economic sectors were the investments made?’ in the template set out in Annex IV to this Regulation, financial market participants shall provide information on the proportion of investments during the period covered by the periodic report in different sectors and sub-sectors, including sectors and sub-sectors of the economy that derive revenues from exploration, mining, extraction, production, processing, storage, refining or distribution, including transportation, storage and trade, of fossil fuels as defined in Article 2, point (62), of Regulation (EU) 2018/1999 of the European Parliament and of the Council (8).

1. Where the financial products referred to in Article 6, first paragraph, of Regulation (EU) 2020/852 included a commitment to make investments in economic activities that contribute to an environmental objective within the meaning of Article 2, point (17), of Regulation (EU) 2019/2088, the section ‘What was the proportion of sustainability-related investments?’ in the template set out in Annex IV shall contain all of the following information:(a) a breakdown of the proportion of the investments per each of the environmental objectives set out in Article 9 of Regulation (EU) 2020/852 to which those investments contributed;(b) a description of the investments in environmentally sustainable economic activities during the period covered by the periodic report, including:(i) whether the compliance of those investments with the requirements laid down in Article 3 of Regulation (EU) 2020/852 was subject to an assurance provided by one or more auditors or a review by one or more third parties and, if so, the name or the names of the auditor or third party;(ii) a graphical representation in the form of a bar chart of the aggregated investments in environmentally sustainable economic activities during the period covered by the periodic report, calculated in accordance with Article 17(1) to (4);(iii) a graphical representation in the form of a bar chart of the degree to which the aggregated investments are in environmentally sustainable economic activities during the period covered by the periodic report, but excluding sovereign exposures, and calculated in accordance with Article 17(5);(iv) the information referred to in Article 15(2), point (b);(v) a breakdown of the proportions of investments, during the period covered by the periodic report, in the transitional economic activities and in the enabling economic activities, in each case expressed as a percentage of all investments of the financial product;(vi) where the financial product invested in sustainable investments with an environmental objective, but which are not environmentally sustainable economic activities, a clear explanation of the reasons for doing so;(vii) where the financial market participant has provided at least one previous periodic report in accordance with this Section for the financial product, a historical comparison of the degree to which the investments were made in environmentally sustainable economic activities during the period covered by the periodic report and during previous periods;(viii) where the financial market participant could not assess the extent to which sovereign exposures contributed to environmentally sustainable economic activities during the period covered by the periodic report, a narrative explanation of the reasons and the size of those exposures in total investments.

2. For the purposes of paragraph 1, point (b), points (ii) and (iii), all of the following shall apply:(a) when aggregating the investments in non-financial undertakings, the turnover, capital expenditure and operational expenditure shall be calculated and included in the graphical representation;(b) when aggregating the investments in financial undertakings, the turnover and capital expenditure shall, where applicable, be calculated and included in the graphical representation;(c) for insurance undertakings and reinsurance undertakings that carry out non-life underwriting activities, the key performance indicator may be a combination of the investment and the underwriting key performance indicators in accordance Article 6 of Delegated Regulation (EU) 2021/2178.

For financial products that promote environmental or social characteristics that included a commitment in sustainable investments with a social objective, the section ‘What was the proportion of sustainability-related investments?’ in the template set out in Annex IV shall contain the share of those sustainable investments.

1. In the section ‘How did this financial product perform compared to the designated reference benchmark?’ in the template set out in Annex IV to this Regulation, financial market participants shall, for financial products that promote environmental or social characteristics, provide all of the following information:(a) an explanation of how the index designated as a reference benchmark differs from a relevant broad market index, including the performance, during the period covered by the periodic report, of the sustainability indicators deemed relevant by the financial market participant to determine the alignment of the index with the environmental or social characteristics promoted by the financial product and the ESG factors referred to in the benchmark statement published by the benchmark administrator in accordance with Article 27(1) of Regulation (EU) 2016/1011;(b) a comparison between the performance of the financial product and the indicators measuring the sustainability factors of the index referred to in point (a) during the period covered by the periodic report;(c) a comparison between the performance of the financial product and a relevant broad market index during the period covered by the periodic report.

2. The comparisons referred to in paragraph 1, points (b) and (c), shall be presented, where relevant, either in the form of a table or in the form of a graphical representation.

For financial products that have sustainable investment as their objective, financial market participants shall present the information referred to in Article 11(1) of Regulation (EU) 2019/2088 in an annex to the document or information referred to in Article 11(2) of that Regulation in the form of the template set out in Annex V to this Regulation. Financial market participants shall include in the main body of the document or information referred to in Article 11(2) of Regulation (EU) 2019/2088 a prominent statement that information on sustainable investment is available in that Annex.

In the section ‘To what extent was the sustainable investment objective of this financial product met?’ in the template set out in Annex V, financial market participants shall provide all of the following information:

(a) the extent to which the sustainable investment objective was attained during the period covered by the periodic report, including the performance of: (i) the sustainability indicators referred to in the subsection ‘What sustainability indicators are used to measure the attainment of the sustainable investment objective of this financial product?’ of the section ‘What is the sustainable investment objective of this financial product?’ in the template set out in Annex III to this Regulation; (ii) any derivatives referred to in the subsection ‘How does the use of derivatives attain the sustainable investment objective?’ of the section ‘What is the asset allocation and the minimum share of sustainable investments?’ in the template set out in Annex III to this Regulation used to attain the sustainable investment objective;

(b) for the financial products referred to in Article 5, first paragraph, of Regulation (EU) 2020/852, an identification of the environmental objectives set out in Article 9 of that Regulation to which the sustainable investment underlying the financial product contributed;

(c) for the financial products referred to in Article 9(3) of Regulation (EU) 2019/2088, information on how the objective of a reduction in carbon emissions was aligned with the Paris Agreement, containing a description of the contribution of the financial product during the period covered by the periodic report to achieve the objectives of the Paris Agreement, including in respect of an EU Climate Transition Benchmark or EU Paris-aligned Benchmark, the ESG factors and criteria considered by the benchmark administrator in accordance with Delegated Regulation (EU) 2020/1818;

(d) where the financial market participants have provided at least one previous periodic report in accordance with this Section for the financial product, a historical comparison between the current period covered by the periodic report and previous periods;

(e) an explanation of how the sustainable investments have contributed to a sustainable investment objective and have not harmed significantly any of the sustainable investment objectives during the period covered by the periodic report, including all of the following: (i) how the indicators for adverse impacts in Table 1 of Annex I, and any relevant indicators in Tables 2 and 3 of that Annex, were taken into account; (ii) whether the sustainable investment was aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, including the principles and rights set out in the eight fundamental conventions identified in the Declaration of the International Labour Organisation on Fundamental Principles and Rights at Work and the International Bill of Human Rights;

(f) information on principal adverse impacts on sustainability factors as referred to in in the section ‘Does this financial product consider principal adverse impacts on sustainability factors?’ in the template set out in Annex III to this Regulation.

1. In the section ‘What were the top investments of this financial product?’ in the template set out in Annex V, financial market participants shall list, in descending order of size, the fifteen investments constituting the largest proportion of investments of the financial product during the period covered by the periodic report, including the sectors and countries of those investments.

2. By way of derogation from paragraph 1, where the number of investments constituting fifty percent of the investments of the financial product during the period covered by the periodic report is less than fifteen, the section referred to in paragraph 1 shall contain a list of those investments, in descending order of size, including the sectors and countries in which those investments were made.

In the section ‘What was the proportion of sustainability-related investments?’ in the template set out in Annex V, financial market participants shall provide all of the following information:

(a) the proportions of the investments of the financial product that contributed to the sustainable investment objective;

(b) the purpose of the remainder of the investments during the period covered by the periodic report, including a description of any minimum environmental or social safeguards and whether those investments are used for hedging or relate to cash held as ancillary liquidity;

(c) the proportion of investments during the period covered by the periodic report in different sectors and sub-sectors.

1. For the financial products referred to in Article 5, first paragraph, of Regulation (EU) 2020/852, the section ‘What was the proportion of sustainability-related investments?’ in the template set out in Annex V shall contain all of the following information:(a) a breakdown in accordance with Article 55(1), point (a);(b) a description of the sustainable investments in environmentally sustainable economic activities during the period covered by the periodic report, including:(i) the information in accordance with Article 55(1), point (b)(i);(ii) a graphical representation in the form of a bar chart in accordance with Article 55(1), point (b)(ii);(iii) a graphical representation in the form of a bar chart in accordance with Article 55(1), point (b)(iii);(iv) the information referred to in Article 15(1), point (b);(v) a breakdown in accordance with Article 55(1), point (b)(v);(vi) where the financial product invested in sustainable investments with an environmental objective but that are not environmentally sustainable economic activities, a clear explanation of the reasons for doing so;(vii) where the financial market participant has provided at least one previous periodic report in accordance with this Section for the financial product, a historical comparison of the degree to which the investments were made in environmentally sustainable economic activities during the period covered by the periodic report and during previous periods;(c) a narrative explanation in accordance with Article 55(1), point (b)(viii);(d) for financial products having sustainable investments with a social objective, the section ‘What was the share of socially sustainable investments during the period covered by the periodic report’ in the template set out in Annex V shall also contain the share of those sustainable investments.

2. For the purposes of paragraph 1, point (b)(ii) and point (b)(iii), financial market participants shall apply Article 55(2).

1. In the section ‘How did this financial product perform compared to the reference sustainable benchmark?’ in the template set out in Annex V, financial market participants shall, for financial products that have sustainable investment as their objective and for which an index has been designated as a reference benchmark, provide all of the following information:(a) an explanation of how the index designated as a reference benchmark differs from a relevant broad market index, including at least the performance during the period covered by the periodic report of the sustainability indicators deemed relevant by the financial market participant to determine the alignment of the index with the sustainable investment objective, including the ESG factors referred to in the benchmark statement published by the benchmark administrator in accordance with Article 27(2a) of Regulation (EU) 2016/1011;(b) a comparison between the performance of the financial product and the indicators measuring the sustainability factors of the index referred to in point (a) during the period covered by the periodic report;(c) a comparison between the performance of the financial product and a relevant broad market index during the period covered by the periodic report.

2. The comparisons referred to in paragraph 1, points (b) and (c), shall be made either in the form of a table or in the form of a graphical representation.

1. Financial market participants shall, in the historical comparisons referred to in Article 51, point (c), Article 55(1), point (b)(vii), Article 59, point (d), and Article 62(1), point (b)(vii), compare the period covered by the periodic report with periods covered by previous periodic reports and, subsequently, with every previous period covered by a periodic report up to at least the last five previous periods.

2. For the purposes of the historical comparisons referred to in Article 51, point (c), and Article 59, point (d), financial market participants shall report on the performance of the sustainability indicators consistently over time, and shall provide all of the following information:(a) where quantitative disclosures are made, figures with a relative measure such as impact per euro invested;(b) which indicators are subject to an assurance provided by an auditor or a review by a third party;(c) the proportion of underlying assets of the financial product referred to in the section ‘What was the proportion of sustainability-related investments?’ in the template set out in Annex IV to this Regulation and in the section ‘What was the proportion of sustainability-related investments?’ in the template set out in Annex V.

1. By way of derogation from Articles 50 to 57, where a financial product offers investment options to the investor and one or more of those investment options qualify that financial product as a financial product that promotes environmental or social characteristics, financial market participants shall insert in the main body of the document or information referred to in Article 11(2) of Regulation (EU) 2019/2088 a prominent statement confirming all of the following:(a) that the financial product promotes environmental or social characteristics;(b) that the attainment of those characteristics is subject to investing in at least one of the investment options referred to in paragraph 2 of this Article and holding at least one of those options during the holding period of the financial product;(c) that further information related to those environmental or social characteristics is available in the annexes referred to in paragraph 2 of this Article.

2. Financial market participants shall provide all of the following information in annexes to the document or information referred to in Article 11(2) of Regulation (EU) 2019/2088:(a) for each investment option invested in that qualifies as a financial product that promotes environmental or social characteristics, the information referred to in Articles 50 to 57 of this Regulation;(b) for each investment option invested in that qualifies as a financial product that has sustainable investment as its objective, the information referred to in Articles 58 to 63 of this Regulation;(c) for each investment option invested in that has sustainable investment as its objective and is not a financial product, the information on the objective of sustainable investment.

3. Financial market participants shall present the information referred to in paragraph 2, point (a), in the form of the template set out in Annex IV and the information referred to in paragraph 2, point (b), in the form of the template set out in Annex V.

1. By way of derogation from Articles 58 to 63, where a financial product offers investment options to the investor and all of those investment options have sustainable investment as their objectives, financial market participants shall confirm in a prominent statement in the main body of the document or information referred to in Article 11(2) of Regulation (EU) 2019/2088 that the financial product has as its objective sustainable investment and that the information related to that objective is available in the annexes referred to in paragraph 2 of this Article.

2. Financial market participants shall provide all of the following information in the annexes to the document or information referred to in Article 11(2) of Regulation (EU) 2019/2088:(a) for each investment option invested in that qualifies as a financial product that has sustainable investment as its objective, the information referred to in Articles 58 to 63;(b) for each investment option invested in that has sustainable investment as its objective and is not a financial product, the information on the objective of the sustainable investment.

3. Financial market participants shall present the information referred to in paragraph 2, point (a), in the form of the template set out in Annex V.

The information on the objective of the sustainable investment referred to in Article 65(2), point (c), and Article 66(2), point (b), shall contain all of the following:

(a) a description of the sustainable investment objective;

(b) the extent to which the sustainable investment objective was attained during the period covered by the periodic report, including the performance of the sustainability indicators used to measure the overall sustainable impacts of the options that have sustainable investment as their objective;

(c) a description of how the investments do not significantly harm any of the sustainable investment objectives, including all of the following: (i) how the indicators for adverse impacts in Table 1 of Annex I and any relevant indicators in Tables 2 and 3 of that Annex, are taken into account; (ii) whether the sustainable investment is aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, including the principles and rights set out in the eight fundamental conventions identified in the Declaration of the International Labour Organisation on Fundamental Principles and Rights at Work and the International Bill of Human Rights.

This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

This Regulation shall apply from 1 January 2023.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

For the purposes of this Annex, the following definitions shall apply:

(1) ‘scope 1, 2 and 3 GHG emissions’ means the scope of greenhouse gas emissions referred to in points (1)(e)(i) to (iii) of Annex III to Regulation (EU) 2016/1011 of the European Parliament and of the Council (9);

(2) ‘greenhouse gas (GHG) emissions’ means greenhouse gas emissions as defined in Article 3, point (1), of Regulation (EU) 2018/842 of the European Parliament and of the Council (10);

(3) ‘weighted average’ means a ratio of the weight of the investment by the financial market participant in an investee company in relation to the enterprise value of the investee company;

(4) ‘enterprise value’ means the sum, at fiscal year-end, of the market capitalisation of ordinary shares, the market capitalisation of preferred shares, and the book value of total debt and non-controlling interests, without the deduction of cash or cash equivalents;

(5) ‘companies active in the fossil fuel sector’ means companies that derive any revenues from exploration, mining, extraction, production, processing, storage, refining or distribution, including transportation, storage and trade, of fossil fuels as defined in Article 2, point (62), of Regulation (EU) 2018/1999 of the European Parliament and of the Council (11);

(6) ‘renewable energy sources’ means renewable non-fossil sources, namely wind, solar (solar thermal and solar photovoltaic) and geothermal energy, ambient energy, tide, wave and other ocean energy, hydropower, biomass, landfill gas, sewage treatment plant gas, and biogas;

(7) ‘non-renewable energy sources’ means energy sources other than those referred to in point (6);

(8) ‘energy consumption intensity’ means the ratio of energy consumption per unit of activity, output or any other metric of the investee company to the total energy consumption of that investee company;

(9) ‘high impact climate sectors’ means the sectors listed in Sections A to H and Section L of Annex I to Regulation (EC) No 1893/2006 of the European Parliament and of the Council (12);

(10) ‘protected area’ means designated areas in the European Environment Agency’s Common Database on Designated Areas (CDDA);

(11) ‘area of high biodiversity value outside protected areas’ means land with high biodiversity value as referred to in Article 7b(3) of Directive 98/70/EC of the European Parliament and of the Council (13);

(12) ‘emissions to water’ means direct emissions of priority substances as defined in Article 2(30) of Directive 2000/60/EC of the European Parliament and of the Council (14) and direct emissions of nitrates, phosphates and pesticides;

(13) ‘areas of high water stress’ means regions where the percentage of total water withdrawn is high (40-80 %) or extremely high (greater than 80 %) in the World Resources Institute’s (WRI) Water Risk Atlas tool ‘Aqueduct’;

(14) ‘hazardous waste and radioactive waste’ means hazardous waste and radioactive waste;

(15) ‘hazardous waste’ means hazardous waste as defined in Article 3(2) of Directive 2008/98/EC of the European Parliament and of the Council (15);

(16) ‘radioactive waste’ means radioactive waste as defined in Article 3(7) of Council Directive 2011/70/Euratom (16);

(17) ‘non-recycled waste’ means any waste not recycled within the meaning of ‘recycling’ in Article 3(17) of Directive 2008/98/EC;

(18) ‘activities negatively affecting biodiversity-sensitive areas’ means activities that are characterised by all of the following: (a) those activities lead to the deterioration of natural habitats and the habitats of species and disturb the species for which a protected area has been designated; (b) for those activities, none of the conclusions, mitigation measures or impact assessments adopted pursuant to any of the following Directives or national provisions or international standards that are equivalent to those Directives have been implemented: (i) Directive 2009/147/EC of the European Parliament and of the Council (17); (ii) Council Directive 92/43/EEC (18); (iii) an Environmental Impact Assessment (EIA) as defined in Article 1(2), point (g), of Directive 2011/92/EU of the European Parliament and of the Council (19); (iv) for activities located in third countries, conclusions, mitigation measures or impact assessments adopted in accordance with national provisions or international standards that are equivalent to the Directives and impact assessments listed in points (i), (ii) and (iii);

(19) ‘biodiversity-sensitive areas’ means Natura 2000 network of protected areas, Unesco World Heritage sites and Key Biodiversity Areas (‘KBAs’), as well as other protected areas, as referred to in Appendix D of Annex II to Commission Delegated Regulation (EU) 2021/2139 (20);

(20) ‘threatened species’ means endangered species, including flora and fauna, listed in the European Red List or the IUCN Red List, as referred to in Section 7 of Annex II to Delegated Regulation (EU) 2021/2139;

(21) ‘deforestation’ means the temporary or permanent human-induced conversion of forested land to non-forested land;

(22) ‘UN Global Compact principles’ means the ten Principles of the United Nations Global Compact;

(23) ‘unadjusted gender pay gap’ means the difference between average gross hourly earnings of male paid employees and of female paid employees as a percentage of average gross hourly earnings of male paid employees;

(24) ‘board’ means the administrative, management or supervisory body of a company;

(25) ‘human rights policy’ means a policy commitment approved at board level on human rights that the economic activities of the investee company shall be in line with the UN Guiding Principles on Business and Human Rights;

(26) ‘whistleblower’ means ‘reporting person’ as defined in Article 5(7) of Directive (EU) 2019/1937 of the European Parliament and of the Council (21);

(27) ‘inorganic pollutants’ means emissions within or lower than the emission levels associated with the best available techniques (BAT-AEL) as defined in Article 3, point (13) of Directive 2010/75/EU of the European Parliament and of the Council (22), for the Large Volume Inorganic Chemicals- Solids and Others industry;

(28) ‘air pollutants’ means direct emissions of sulphur dioxides (SO2), nitrogen oxides (NOx), non-methane volatile organic compounds (NMVOC), and fine particulate matter (PM2,5) as defined in Article 3, points (5) to (8), of Directive (EU) 2016/2284 of the European Parliament and of the Council (23), ammonia (NH3) as referred to in that Directive and heavy metals (HM) as referred to in Annex I to that Directive;

(29) ‘ozone depletion substances’ mean substances listed in the Montreal Protocol on Substances that Deplete the Ozone Layer.

For the purposes of this Annex, the following formulas shall apply:

(1) ‘GHG emissions’ shall be calculated in accordance with the following formula:

(2) ‘carbon footprint’ shall be calculated in accordance with the following formula:

(3) ‘GHG intensity of investee companies’ shall be calculated in accordance with the following formula:

(4) ‘GHG intensity of sovereigns’ shall be calculated in accordance with the following formula:

(5) ‘inefficient real estate assets’ shall be calculated in accordance with the following formula:

For the purposes of the formulas, the following definitions shall apply:

(1) ‘current value of investment’ means the value in EUR of the investment by the financial market participant in the investee company;

(2) ‘enterprise value’ means the sum, at fiscal year-end, of the market capitalisation of ordinary shares, the market capitalisation of preferred shares, and the book value of total debt and non-controlling interests, without the deduction of cash or cash equivalents;

(3) ‘current value of all investments’ means the value in EUR of all investments by the financial market participant;

(4) ‘nearly zero-energy building (NZEB)’, ‘primary energy demand (PED)’ and ‘energy performance certificate (EPC)’ shall have the meanings given to them in paragraphs 2, 5 and 12 of Article 2 of Directive 2010/31/EU of the European Parliament and of the Council (24).

Table 1

Statement on principal adverse impacts of investment decisions on sustainability factors

Table 2

Additional climate and other environment-related indicators

Table 3

Additional indicators for social and employee, respect for human rights, anti-corruption and anti-bribery matters

(1) Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010 (OJ L 174, 1.7.2011, p. 1).

(2) Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS) (OJ L 302, 17.11.2009, p. 32).

(3) Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and amending Regulation (EU) No 648/2012 (OJ L 176, 27.6.2013, p. 1).

(4) Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (OJ L 335, 17.12.2009, p. 1).

(5) Directive 2007/36/EC of the European Parliament and of the Council of 11 July 2007 on the exercise of certain rights of shareholders in listed companies (OJ L 184, 14.7.2007, p. 17).

(6) Regulation (EU) 2017/2402 of the European Parliament and of the Council of 12 December 2017 laying down a general framework for securitisation and creating a specific framework for simple, transparent and standardised securitisation, and amending Directives 2009/65/EC, 2009/138/EC and 2011/61/EU and Regulations (EC) No 1060/2009 and (EU) No 648/2012 (OJ L 347, 28.12.2017, p. 35).

(7) Regulation (EU) No 236/2012 of the European Parliament and of the Council of 14 March 2012 on short selling and certain aspects of credit default swaps (OJ L 86, 24.3.2012, p. 1).

(8) Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the Governance of the Energy Union and Climate Action, amending Regulations (EC) No 663/2009 and (EC) No 715/2009 of the European Parliament and of the Council, Directives 94/22/EC, 98/70/EC, 2009/31/EC, 2009/73/EC, 2010/31/EU, 2012/27/EU and 2013/30/EU of the European Parliament and of the Council, Council Directives 2009/119/EC and (EU) 2015/652 and repealing Regulation (EU) No 525/2013 of the European Parliament and of the Council (OJ L 328, 21.12.2018, p. 1).

(9) Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts or to measure the performance of investment funds and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014 (OJ L 171, 29.6.2016, p. 1).

(10) Regulation (EU) 2018/842 of the European Parliament and of the Council of 30 May 2018 on binding annual greenhouse gas emission reductions by Member States from 2021 to 2030 contributing to climate action to meet commitments under the Paris Agreement and amending Regulation (EU) No 525/2013 (OJ L 156, 19.6.2018, p. 26).

(11) Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the Governance of the Energy Union and Climate Action, amending Regulations (EC) No 663/2009 and (EC) No 715/2009 of the European Parliament and of the Council, Directives 94/22/EC, 98/70/EC, 2009/31/EC, 2009/73/EC, 2010/31/EU, 2012/27/EU and 2013/30/EU of the European Parliament and of the Council, Council Directives 2009/119/EC and (EU) 2015/652 and repealing Regulation (EU) No 525/2013 of the European Parliament and of the Council (OJ L 328, 21.12.2018, p. 1).

(12) Regulation (EC) No 1893/2006 of the European Parliament and of the Council of 20 December 2006 establishing the statistical classification of economic activities NACE Revision 2 and amending Council Regulation (EEC) No 3037/90 as well as certain EC Regulations on specific statistical domains Text with EEA relevance (OJ L 393, 30.12.2006, p. 1).

(13) Directive 98/70/EC of the European Parliament and of the Council of 13 October 1998 relating to the quality of petrol and diesel fuels and amending Council Directive 93/12/EEC (OJ L 350, 28.12.1998, p. 58).

(14) Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework for Community action in the field of water policy (OJ L 327, 22.12.2000, p. 1).

(15) Directive 2008/98/EC of the European Parliament and of the Council of 19 November 2008 on waste and repealing certain Directives (OJ L 312, 22.11.2008, p. 3).

(16) Council Directive 2011/70/Euratom of 19 July 2011 establishing a Community framework for the responsible and safe management of spent fuel and radioactive waste (OJ L 199, 2.8.2011, p. 48).

(17) Directive 2009/147/EC of the European Parliament and of the Council of 30 November 2009 on the conservation of wild birds (OJ L 20, 26.1.2010, p. 7).

(18) Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora (OJ L 206, 22.7.1992, p. 7).

(19) Directive 2011/92/EU of the European Parliament and of the Council of 13 December 2011 on the assessment of the effects of certain public and private projects on the environment (OJ L 26, 28.1.2012, p. 1).

(20) Commission Delegated Regulation (EU) 2021/2139 of 4 June 2021 supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council by establishing the technical screening criteria for determining the conditions under which an economic activity qualifies as contributing substantially to climate change mitigation or climate change adaptation and for determining whether that economic activity causes no significant harm to any of the other environmental objectives (OJ L 442, 9.12.2021, p. 1).

(21) Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report breaches of Union law (OJ L 305, 26.11.2019, p. 17).

(22) Directive 2010/75/EU of the European Parliament and of the Council of 24 November 2010 on industrial emissions (integrated pollution prevention and control) (OJ L 334, 17.12.2010, p. 17).

(23) Directive (EU) 2016/2284 of the European Parliament and of the Council of 14 December 2016 on the reduction of national emissions of certain atmospheric pollutants, amending Directive 2003/35/EC and repealing Directive 2001/81/EC (OJ L 344, 17.12.2016, p. 1).

(24) Directive 2010/31/EU of the European Parliament and of the Council of 19 May 2010 on the energy performance of buildings (recast) (OJ L 153, 18.6.2010, p. 13).