Sustainability Disclosures for Issuers

A first look on information reported under Article 8 of the Taxonomy Regulation for the transition year

Key takeaways

  • For this first reporting period, the concerned Issuers were confronted with a very short implementation period, between the publication of the regulation and its application, as well as with regulatory provisions which, at first sight, may have seemed easy to observe but which may have, during the implementation process, turned out to be more complicated than expected.
  • Despite these conditions, 60% of the reviewed Issuers were able to achieve compliance with the new disclosure requirements. As regards the remaining 40%, the CSSF reminds them to comply with the requirements of Article 8 of the European Taxonomy. Sustainability data is increasingly seen as material information for issuers, in the same way as financial information. Article 8 contributes to providing relevant information in this context. Thus, faced with disclosure requirements that will continue to increase and the strong market’s expectation to be provided with such data, Issuers cannot afford to be late and must prepare as of now in order to comply with these new requirements.
  • Our review has also shown the importance of providing high qualitative information to enable users to better understand the information given and to be able to compare it across Issuers, as well as across different sectors. Therefore, the CSSF recommends Issuers to improve the qualitative information provided, thus allowing a better achievement of the objective of the regulation which is to provide clear, understandable, relevant and comparable information.
  • For the second year of reporting from 1 January 2023 the disclosure requirements on Taxonomy-alignment information will, in absence of detailed practical guidance and in anticipation of the awaited publication of the Environmental Delegated Act, be highly challenging for Issuers.
  • As a result, the remaining months, leading up to the publication of the next reporting, are critical for Issuers in view of ensuring a smooth but successful implementation of Article 8 of the Taxonomy Regulation.