The CSSF reinforces its sustainable finance agenda across all supervised sectors
In a communiqué dated 2 March 2026, the CSSF has updated its priorities within the area of sustainable finance. The CSSF believes that sustainability considerations and the integration of sustainability risks should not be seen merely as a regulatory obligation, but as essential drivers of long-term financial strategies and resilience.
The CSSF, as an active participant at the international level and in close engagement with various stakeholders, aims to promote long-term sustainability. To this end, the CSSF supports a transparent, credible, and coherent approach towards sustainability objectives. The CSSF is engaged in constructive dialogue with stakeholders to ensure that the sustainable finance framework remains effective and proportionate while maintaining a risk-based approach.
The CSSF priorities focus on distinct sets of supervisory priorities for credit institutions and investment firms, asset management industry and lastly issuers.
Priorities for credit institutions and investment firms
The CSSF considers the ongoing EU regulatory developments regarding transparency and disclosure obligations, including the review of Regulation (EU) 2019/2088 (the "SFDR") and Implementing Regulation 2024/3172. The focus is on transparency and disclosure ,risk management and governance, and MiFID rules related to sustainability.
- Compliance by credit institutions and investment firms with the sustainability-related disclosures under the SFDR. This is verified through the Long Form Report submission, which is continuously updated by CSSF circulars.
- Corrective measures may be taken by the CSSF where the Long Form Report reveals weaknesses or non-compliance in the self-assessment.
- Continued on-site inspections by the CSSF at depositaries, to ensure that ESG investment-related restrictions are respected.
- Climate and nature-related risks remain a top priority for the banking sector. The CSSF will assess how banks integrate ESG risks into their management in accordance with CSSF Circular 21/773 and the European Banking Authority ("EBA") guidelines on management of ESG risks the risks (implemented via CSSF Circular 26/905).
- MiFID rules remain under supervision, but the CSSF will adapt its expectations to each firm and to the evolving regulatory framework.
Supervisory priorities for the asset management industry
The CSSF aims to increase transparency for investors and prevent greenwashing. To this end, it will continue to monitor investment fund managers' ("IFMs") compliance with the sustainability-related provisions set forth under the SFDR, the SFDR regulatory technical standards ("SFDR RTS") and Regulation (EU) 2020/852 (the "Taxonomy Regulation"), as well as the principles and guidance laid down by ESMA regarding sustainability risks and disclosures in the area of investment management and funds' names using ESG or sustainability-related terms.
The CSSF will focus on the following priority areas, applying a risk-based approach integrating on-site and off-site supervision:
Integration of sustainability risks in the organisational arrangements of IFMs, notably in terms of human resources and governance, investment decision and advice processes, remuneration, risk management and management of conflicts of interest, as required under SFDR.
Compliance of pre-contractual and periodic disclosures with the transparency requirements under the SFDR, the SFDR RTS and the Taxonomy Regulation.
Consistency of sustainability-related disclosures across fund documentation and marketing materials.
Compliance of IFMs' website disclosure obligations relating to the publication and maintenance of up-to-date SFDR-related information for the investment funds they manage.
Portfolio analysis to ensure that holdings reflect the name, investment objective, strategy and the characteristics disclosed in the documentation provided to investors.
The CSSF will continue to leverage data collected from SFDR IFM pre-contractual and periodic data to support its supervisory work. IFMs remain responsible for ensuring that all submitted information is kept up to date and accurate. The CSSF will also continue to provide clarifications to the industry as needed, including through its SFDR-related communiqués and FAQ.
The supervisory priorities for issuers
Following the publication of Directive (EU) 2022/2464 on corporate sustainability reporting 2026/470 amending Directive (EU) 2022/2464 on corporate sustainability reporting (the "CSRD") (see our newsletter on this topic), which is still awaiting transposition in Luxembourg, the CSSF will continue to guide issuers that voluntarily publish sustainability statements in line with the European Sustainability Reporting Standards ("ESRS"), through fact-finding exercises and bilateral exchanges, to highlight key points when developing their sustainability reports.
As in previous years, the ESMA, together with the European national accounting enforcers, including the CSSF will continue to identify and implement European common enforcement priorities (the ECEPs) for annual reports, to guide the monitoring and assessment of relevant reporting requirements.
As for securities prospectuses approval, the CSSF and ESMA will continue to develop the annex defining the minimum ESG-related information to be included in prospectuses, as well as related questions and answers and guidelines at the European level.
Conclusion
The CSSF continues to adapt its supervisory framework in line with the latest EU regulatory developments, with a view to maintaining high standards in the areas of sustainable finance and risk management, taking into consideration the evolving ESG and corporate reporting standards. In doing so, the CSSF applies a proportionate and pragmatic approach, encouraging supervised entities to integrate sustainability considerations into their long-term business strategies, rather than treating them solely as regulatory obligations.
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