You must explain why action is needed, what actions you took last year, and what actions or targets you plan for next year to avoid or reduce PAIs.
When an FMP considers PAI at entity level and discloses a statement on its due diligence policies in accordance with Article 4(1)(a) or 4(3)-(4) of the SFDR, what is required under the description of actions taken, planned or targets set “to avoid and reduce” PAI referred to in Article 6(2) of SFDR Delegated Regulation? Should the financial market participant include a description of what actions the financial market participant will take if the PAI reaches a certain level?
Under the description of actions taken, planned or targets set “to avoid and reduce” PAI referred to in Article 6(2) SFDR Delegated Regulation, in order for that description to be fair, clear and not misleading, the financial market participant should, for each of the identified PAI, include (or refer to) information on how the financial market participant assesses the need to take action (e.g. any relevant thresholds or criteria that trigger actions to mitigate the PAI), the actions taken the previous year and actions planned or targets set for the coming year.
European Supervisory Authorities (ESAs)
