The Malta Financial Services Authority (MFSA) has issued a circular with which seeks to inform Financial Market Participants and Financial Advisors about the recent developments and ongoing work of the European Supervisory Authorities (ESAs) on regulatory instruments applicable to the sustainable finance sector. The circular focuses on the Application of Article 8(1), (2) and (3) of the Sustainable Finance Taxonomy Regulation (SFTR) Regulation (EU) 2019/20881.
Article 8 of the Sustainable Finance Taxonomy Regulation (SFTR), aspects of which shall apply from 1 January 2022, requires undertakings that fall within scope of application of the Non-Financial Reporting Directive (NFRD) to include information in their non-financial information statements on activities. Article 8 also requires non-financial undertakings to disclose the proportion of their turnover derived from products or services associated with environmentally sustainable economic activities and the proportion of their capital and operating expenditure related to assets or processes associated with environmentally sustainable economic activities.
The NFRD at present applies to large public interest entities (PIEs) which may include organisations in the financial and non-financial sectors. It is therefore relevant, to banks, insurers, listed companies and other companies designated by national authorities as public interest companies, in each case if they have more than 500 employees.