CSSF Thematic Review on the implementation of sustainability-related provisions in the investment fund industry

The CSSF has issued a thematic review on the implementation of sustainability-related provisions in the investment fund industry. The review focuses on the compliance of IFMs with the disclosure obligations outlined in the SFDR and RTS.
One key requirement is for IFMs to publish a statement on the PAI of their investment decisions on sustainability factors. This statement should be published on the IFMs‘ website by 30 June each year and cover the period from 1 January to 31 December of the preceding year.
IFMs are also required to provide clear and non-misleading precontractual disclosures, including information on environmental/social characteristics or sustainable objectives. These disclosures should be easily accessible, prominent, simple, concise, fair, and comprehensible for investors. The CSSF emphasizes the importance of avoiding general expressions without further specification and clearly identifying the sustainable objectives or characteristics of the fund.
Furthermore, IFMs must publish and maintain on their websites information for each fund disclosing under Article 8 or 9 of SFDR. This information should be presented in a separate section titled „Sustainability-related disclosures“ and prominently display the environmental/social characteristics or sustainable investment objective of the financial product.
The periodic disclosure for UCITS and AIFs should be presented in an annex to their annual report, following the templates set out in the SFDR RTS. The disclosure should include a prominent statement in the main body of the annual report, indicating that information on environmental/social characteristics or sustainable investments is available in the annex.
The periodic disclosure should also include information on the realization of ESG characteristics or sustainable investment objectives, including the performance of sustainability indicators used to measure these characteristics. IFMs should provide information on the sustainability indicators used, any limitations defined in precontractual disclosures, and a quantitative assessment of these indicators realized during the period.
IFMs are expected to provide detailed and relevant information on the PAI considered during the period for each fund. This information should be consistent with the qualitative and/or quantitative information provided in the precontractual disclosures.
Finally, IFMs should ensure consistency between the information disclosed in fund documentation and marketing communications, avoiding contradictions with the information disclosed under SFDR.