ESAs propose ESG disclosures for STS Securitisations

The ESAs have jointly proposed Draft RTS on ESG impact disclosure for STS securitisations. The purpose of these standards is to provide market participants with the necessary information to make informed decisions about the sustainability impact of their investments.
The proposed RTS focus on ESG disclosures for STS securitisations with underlying exposures in residential loans, auto loans, and leases. These standards aim to ensure consistency with the SFDR, which distinguishes between mandatory indicators (such as energy efficiency) and additional indicators (such as emissions) in the publication of available information.
The RTS outline the content, methodologies, and presentation of disclosures regarding sustainability indicators and adverse impacts of assets financed by the underlying exposures for STS securitisations on climate and other ESG-related factors.
The ESAs‘ objective with these standards is not to create a framework for „sustainable securitisation“ but rather to enable originators to disclose PAIs of STS securitisations using reporting that aligns closely with the SFDR.
The Final Report provides an overview of the feedback received during the public consultation on the CP (eventid=15481), with most respondents expressing support for the ESAs‘ approach and the need for standardization and alignment with existing sustainability reporting frameworks. Respondents emphasized the importance of consistency with SFDR and proportionality in reporting requirements, as well as reasonable reporting costs. Some respondents also raised concerns about the implementation timelines and suggested the inclusion of grandfathering provisions.
The ESAs took the feedback into account and revised the proposed Draft RTS, they aim to maintain coherence with the SFDR RTS and have aligned the Draft RTS with it.