The CSSF's Supervisory Priorities For Fund Managers In The Area Of Sustainable Finance

• Published date: 04 April 2024
• Subject Matter: Finance and Banking, Environment, Compliance, Environmental Law, Fund Finance
• Law Firm: Loyens & Loeff
• Author: Ms Marjorie André and Irina Stoliarova

On 22 March 2024 the Luxembourg regulator (the CSSF) released its supervisory priorities in the area of sustainable finance, which are bringing a few insights on the Luxembourg's regulator's priorities in this area.

The CSSF highlighted once again importance of integration of sustainability and adequate consideration of sustainability risks in financial strategies as part of a long-term objective towards more sustainable future. The CSSF is aiming, in support of its ambition, at fostering a cohesive implementation of the sustainable finance framework across the financial sector and ensuring the integration of ESG requirements in the CSSF's supervisory practice.

In that respect, the CSSF emphasised that the primary responsibility of ensuring compliance with applicable requirements lies with the supervised entities and their board members, who should ensure that the integration of ESG factors in traditional governance, risk management and compliance tools is a focal point within their organisations, and endeavour to make suitable ESG education a priority for themselves and their personnel.

The CSSF confirmed that it will continue to monitor fund managers' compliance with the SFDR, the SFDR RTS and the Taxonomy Regulation. In doing so, the CSSF will focus on the areas described hereinafter.

The CSSF expects fund mangers' organisational arrangements to take due account of the integration of sustainability risks, notably in terms of human resources and governance, investment decision or advice processes, remuneration and...