Unveiling Sustainable Finance Regulation: transparency, integration, EU taxonomy

Sustainable Finance Regulation encompasses a set of harmonized rules and standards aimed at guiding financial market participants and advisers in integrating sustainability considerations into their operations. These regulations focus on ensuring transparency concerning sustainability risks, adverse sustainability impacts, and the provision of sustainability-related information for financial products. The goal is to promote responsible investment practices, address greenwashing, and contribute to a sustainable and environmentally conscious financial sector. The main document, Regulation (EU) 2019/2088 (SFDR), enacted on 12 July 2020, establishes unified rules for financial market participants and financial advisers regarding transparency on integrating sustainability risks and considering adverse sustainability impacts in their processes. It also mandates the provision of sustainability-related information concerning financial products. This regulation applies to both financial market participants and financial advisers as defined by specific articles within the regulation. The first related document is Commission Delegated Regulation (EU) 2022/1288, supplementing Regulation (EU) 2019/2088 (RTS of SFDR). It delineates regulatory technical standards specifying the content and presentation details related to the principle of "do no significant harm," sustainability indicators, adverse sustainabi...