On 11 July 2023, ESMA issued a public statement on the sustainability disclosure expected to be included in prospectuses in order to satisfy the requirements of Regulation (EU) 2017/1129 of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive 2003/71/EC (the “Prospectus Regulation”), (the “Public Statement”). The purpose of the Public Statement is to set out ESMA’s expectations on how the disclosure requirements under the Prospectus Regulation, with regard to sustainability-related matters in equity and non-equity prospectuses should be satisfied. ESMA have published this Public Statement, in support of the Environmental, Social and Governance (“ESG”) transition in the hope that it will help to:
ensure that national competent authorities (“NCAs”) take a coordinated approach to the scrutiny of sustainability-related disclosure in prospectuses;
provide issuers and their advisors with an understanding of the disclosure that NCAs will expect them to include in their prospectuses; and
support investors’ ability to make an informed investment decision considering the importance of disclosure relating to sustainability-related matters.
Main focus points for ESMA in respect of ESG disclosure in prospectuses
The Public Statement focuses on three main issues regarding disclosure in prospectuses:
Sustainability-related disclosure in equity prospectuses and consistency with non-financial reporting
In this section, ESMA clarifies that sustainability-related disclosures published in an issuer’s non-financial reporting in accordance with Directive 2014/95/EU of 22 October 2014 amending Directive 2013/34/EU as regards disclosure of non-financial and diversity information by certain large undertakings and groups and Directive (EU) 2022/2464 of 14 December 2022 as regards corporate sustainability reporting, which are material in the context of Article 6(1) of the Prospectus Regulation, should be included in equity prospectuses.
Prospectuses relating to non-equity securities with a specific ESG component or objective
In relation to non-equity securities advertised as taking into account a specific ESG component or pursuing ESG objectives, ESMA clarifies the disclosure that is required in relation to both ‘use of proceeds’ bonds and ‘sustainability-linked’ bonds.
Consistency of sustainability-related disclosure in prospectuses and advertisements
This section sets out the expectation for sustainability-related disclosures in issuers’ advertisements to be included in their prospectus, if the disclosure is material under Article 6(1) of the Prospectus Regulation.
Applicability of the Public Statement
While the Pubic Statement is principally addressed to NCAs, its contents is relevant for issuers and advisors and should be taken into consideration by them when drawing up prospectuses, including sustainability-related disclosure. ESMA will continue to monitor the market to determine whether this guidance should be modified from time to time.