EU

• ECOFACT Regulatory Factsheets: AMAS cooperates with ECOFACT, a company active in the field of ESG risk analysis, to provide association members with an in-depth insight into the constantly evolving regulatory framework and regulatory initiatives in the EU. Within the framework of this partnership, AMAS publishes and updates factsheets on EU regulations on a quarterly basis. The factsheets contain key regulatory developments as well as the implementation timetable and recommendations for implementation.
  - Factsheet 1: Sustainable Finance Disclosure Requirements
  - Factsheet 2: Taxonomy
  - Factsheet 3: MiFID II
  - Factsheet 4: Principal Adverse Impacts (PAI)

• EU Taxonomy: The EU Taxonomy Regulation represents a European classification system for environmentally sustainable activities. It entered into force on 12 July 2020 and provides a uniform definition of sustainability. Thus, the taxonomy clarifies the mandatory terms, without which no measurability and comparability is possible. Basically, the taxonomy attempts to answer the question: What can be considered an ecologically sustainable activity? In its structure, the taxonomy defines six environmental goals. An economic activity is considered sustainable if it supports at least one of these goals without simultaneously causing significant harm to any of the others. The taxonomy is not yet directly linked to the current versions of SFDR and NFRD but is capable of further specifying these regulations. This is expected to happen with the further development of SFDR (Level 2) through the Regulatory Technical Standards (RTS). AMAS is closely monitoring regulatory developments and discussions in the EU. Currently, AMAS is relying on industry agreements and self-regulation and due to existing ambiguities and missing details, cannot yet assess to what extent an adaptation to the EU taxonomy supports the Swiss goal of becoming a leading hub for sustainable finance.

• SFDR: The EU Sustainable Finance Disclosure Regulation (SFDR) obliges financial market participants to report on their sustainability risks via a set of rules. SFDR applies both at the company level and at the product level: this means that companies must report on how they deal with such risks as an organisation and on such risks that affect their financial products. Even financial market participants that do not offer ESG-related products are required to report on sustainability risks. If a financial company offers ESG-related products, the SFDR requires additional disclosures on the design of these products in relation. SFDR has been in force since 10 March 2021, initially in the so-called "development stage 1" - Level 1. For the time being, this sets out the basic framework principles for the regulation. SFDR Level 2 comes into force with the Regulatory Technical Standards (RTS) at the beginning of 2023.

• NFRD: The Non-Financial Reporting Directive (NFDR) was adopted in 2014 as an EU directive regulating the disclosure of non-financial information by companies. It states that ESG information must be part of corporate reporting from 2018. The NFDR only applies to large companies, i.e. "public interest entities". Non-disclosure of ESG information is permitted, provided it is transparent and justified. In Switzerland, such comparable disclosure obligations do not yet exist. However, a binding implementation of climate reporting is planned for large companies by 2023 according to the TCFD recommendations.

Global

• GFANZ: The Glasgow Financial Alliance for Net Zero (GFANZ) is the umbrella organisation for the various international net-zero alliances. GFANZ was founded in 2021 in view of the COP26 climate conference in Glasgow to coordinate the multitude of initiatives and activities in the financial sector for achieving the Paris climate goals. In alliances such as the Net-Zero Asset Managers Initiative, where AMAS is a supporting organisation, financial market players commit to aligning their portfolios and business activities with the net-zero target by 2050 at the latest, thereby accelerating the transition to a net-zero emissions economy. Other alliances under the GFANZ umbrella are the Net-Zero Banking Alliance, the Net-Zero Insurance Alliance, the Net-Zero Asset Owner Alliance and the Paris Aligned Investor Initiative58. The Federal Council has encouraged Swiss financial market players to join international net-zero alliances to support the goal of becoming a leading hub for sustainable finance.