The Joint Committee of the three European Supervisory Authorities (EBA, EIOPA and ESMA – the ESAs) today published their fourth annual Report on the extent of voluntary disclosure of principal adverse impacts (PAIs) under the Sustainable Finance Disclosure Regulation (SFDR). The ESAs have observed a steady improvement in the quality of the PAI voluntary disclosures at both entity and product level.
Similar to previous years, the ESAs surveyed National Competent Authorities and conducted staff-level analysis of publicly available PAI statements from the asset management, insurance and occupational pension sectors and of a sample of financial products’ PAI disclosures.
The 2025 Report notes an effort from financial market participants to publish more complete information in compliance with SFDR disclosure requirements, with a general improvement in the quality of information provided.
In line with previous years, the findings also confirm that financial market participants within larger multinational groups tend to provide more detailed disclosure, while smaller entities often combine general ESG or marketing information with their SFDR disclosures.
Surveyed National Competent Authorities affirmed that some financial market participants have taken onboard the good practices included in the previous reports and have improved their disclosures.
Additionally, the 2025 Report also includes recommendations for National Competent Authorities to support their supervision of PAI disclosures and for the European Commission to consider ahead of the forthcoming review of the SFDR.
Background and Legal basis
PAIs are the most significant negative impacts of investments on the environment and people. When a financial market participant considers principal adverse impacts, it means that it should seek to reduce the negative impact of the companies they invest in.
Under Article 18 of the SFDR, the ESAs s must take stock of the extent of voluntary disclosures at entity and product level and publish a Report on an annual basis by 10 September.