The CSSF highlighted once again importance of integration of sustainability and adequate consideration of sustainability risks in financial strategies as part of a long-term objective towards more sustainable future. The CSSF is aiming, in support of its ambition, at fostering a cohesive implementation of the sustainable finance framework across the financial sector and ensuring the integration of ESG requirements in the CSSF’s supervisory practice.
In that respect, the CSSF emphasised that the primary responsibility of ensuring compliance with applicable requirements lies with the supervised entities and their board members, who should ensure that the integration of ESG factors in traditional governance, risk management and compliance tools is a focal point within their organisations, and endeavour to make suitable ESG education a priority for themselves and their personnel.
The CSSF confirmed that it will continue to monitor fund managers’ compliance with the SFDR, the SFDR RTS and the Taxonomy Regulation. In doing so, the CSSF will focus on the areas described hereinafter.
The CSSF expects fund mangers’ organisational arrangements to take due account of the integration of sustainability risks, notably in terms of human resources and governance, investment decision or advice processes, remuneration and risk management processes and policies and management of conflicts of interest as required under SFDR.
SFDR, the SFDR RTS and the Taxonomy Regulation lay down transparency requirements regarding the provision of sustainability-related information in pre-contractual and periodic documentation of financial products, and the CSSF will continue to assess compliance with such requirements. The CSSF will also continue to assess and verify that sustainability-related disclosures made are consistent across the fund documentation and marketing material and verify compliance with product website disclosures’ requirements.
Most importantly, the CSSF will undertake supervisory actions to ensure that portfolio holdings reflect the name, the investment objective, the strategy, and the characteristic displayed in the documentation to investors.
Finally, the CSSF reminds fund managers that it remains their responsibility to ensure that the information provided to the CSSF in the different data collection exercises is being kept up to date at any point in time. The CSSF will conduct further thematic on-site inspections on the integration of sustainability-related provisions in the organisation.