Launch of the ESMA Common Supervisory Action (CSA) on sustainability risks and disclosures in the investment fund sector

On 6 July 2023 the European Securities and Markets Authority (ESMA) announced the launch of a Common Supervisory Action (CSA) with National Competent Authorities (NCAs) across the European Union on the integration of sustainability risks and disclosures.

The aim of the CSA is to investigate how UCITS Managers and AIFMs comply with the relevant provisions in the Sustainable Finance Disclosure Regulation, the Taxonomy Regulation and relevant implementing measures, including the relevant provisions in the UCITS and AIFMD implementing acts on the integration of sustainability risks. The CSA will also relate to the principles of the ESMA Supervisory Briefing on sustainability risks and disclosures in the area of investment management published in May 2022. The CSA is performed based on a common methodology developed by ESMA.

In this context, on 29 August 2023 the CSSF contacted by email the Luxembourg-based UCITS Managers and AIFMs that are in scope of this CSA. The UCITS Managers and AIFMs that did not receive an email from the CSSF on 29 August 2023 on this subject matter are not concerned by this exercise.

The CSA is a two-stage process where:

• In the first stage, NCAs will request UCITS Managers and AIFMs to complete a questionnaire focusing more closely on greenwashing risks;
• In the second stage, NCAs will request UCITS Managers and AIFMs to complete a questionnaire dedicated to the integration of sustainability risks and factors in the organisational arrangements of UCITS Managers and AIFMs and to the transparency disclosures at IFM and product level.

Technical information and deadlines will be shared with the selected entities on a bilateral basis.