MiFID II ESG
Directive 2014/65/EU (MiFID II) and Delegated Regulation (EU) 2021/1253 on sustainability preferences
Topic : Sustainable finance · Level : Regional
Today
Sustainability preferences in suitability tests apply since 2 Aug 2022. Link to SFDR review proposal pending.
Summary
MiFID II requires investment advisers and portfolio managers to ask clients about sustainability preferences and offer matching products. ESG rules apply since August 2022. Companies feel it as investor demand for ESG data.
Who is concerned
- Turnover
- non précisé
- Employees
- non précisé
- Listed company
- non précisé
- Sectors
- Investment firms
- Banks giving advice
- Portfolio managers
- Triggering activities
- Giving investment advice to EU clients
- Managing portfolios for EU clients
- Extraterritorial reach
- No
non précisé
- Examples
- French private bank advising clients
- Asset manager distributing funds in EU
What the law requires
- Ask clients about sustainability preferences in suitability tests
- Match products to preferences using SFDR/Taxonomy data
- Integrate sustainability risks into governance and conflicts policies
Penalties
Member States set sanctions; for legal persons maximum fines at least €5M or 10% of annual turnover, or twice the benefit gained.
What this changes for a supplier in China
Indirect. Investors push listed EU buyers for ESG data that feeds Taxonomy and PAI indicators, which reaches suppliers via buyer questionnaires.
Expected evidence
- Scope 1-2 emissions
- Exposure to controversial activities
- Human rights policy
Tiers : Tier 1