A recent survey conducted by the Compliance Institute reveals that less than one-third of Irish financial services organizations are fully adhering to the new European Union (EU) disclosure rules concerning the impact of company investments on the environment and society. The EU's Sustainable Finance Disclosures Regulation (SFDR) was introduced in April 2022 and aims to provide detailed information about how organizations address and reduce negative impacts of investments.
Headline findings from the survey include:
- 56% of financial services organizations support the new rules, but 40% are uncertain about them.
- While 78% have taken action to incorporate the new standards, only 29% are fully compliant.
- Almost 20% await further guidance or plan to adapt to the requirements this year.
Michael Kavanagh, CEO of the Compliance Institute, emphasizes the importance of the SFDR in combating greenwashing and promoting transparency in sustainability claims. Greenwashing, the deceptive presentation of products as environmentally friendly, has been a growing concern. The SFDR aims to ensure genuine sustainability efforts are recognized while holding deceptive companies accountable.
Michael Kavanagh encourages all companies to understand and comply with the new rules to safeguard the environment, prevent greenwashing, and avoid potential penalties for non-compliance.
Compliance Institute is a professional body for compliance professionals offering education and development in compliance. The SFDR is a set of EU rules to increase transparency in investment sustainability and combat greenwashing.