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Expectations for sustainability-related disclosures in prospectuses

On 13 July, 2023, the Malta Financial Services Authority (MFSA) issued a circular regarding the European Securities and Markets Authority (ESMA)’s public statement on its expectations in relation to sustainability-related disclosures to be included in prospectuses drawn up in accordance with the Prospectus Regulation (Regulation (EU) 2017/1129) (“Prospectus Regulation”).

ESMA acknowledges that while disclosure requirements relating to sustainability matters are envisaged to be included in certain EU legislative proposals, including the proposed EU Listing Act (see our previous article on the EU Listing Act Package), given the importance of sustainability to investors, ESMA has issued a statement with a view to ensuring that, in the interim, national competent authorities, issuers and advisers, are well-informed of, and understand, the EU’s expectations in relation to sustainability disclosures in debt and equity prospectuses in the context of the existing disclosure requirements under the Prospectus Regulation.

The materiality assessment

In issuing its statement, ESMA communicates that sustainability-related disclosures ought to be included in prospectuses where sustainability-related information constitutes ‘necessary information which is material to an investor for making an informed decision’, despite sustainability-related matters not being explicitly referred to in the building blocks on the basis of which the prospectus is drawn up. In assessing the materiality of sustainability-related information, issuers and their advisers will need to consider the specific circumstances of the issuer and the type of securities being issued.

Sustainability-related disclosure in equity prospectuses

As regards prospectuses drawn up in respect of equity issuances, ESMA expects equity issuers reporting in their annual report on non-financial matters in accordance with the Non-Financial Reporting Directive (Directive 2014/95/EU) (NFRD), and in the near future, reporting on sustainability matters in accordance with the Corporate Sustainability Reporting Directive (Directive (EU) 2022/2464) (CSRD) (please refer to our previous article on the CSRD), to disclose such sustainability-related information in their equity prospectuses, to the extent deemed material in the context of the Prospectus Regulation.

Sustainability-related disclosure in debt prospectuses  

ESMA furthermore sets out specific recommendations for issuers of sustainable debt instruments. With respect to ‘use of proceeds’ bonds, ESMA expects specific disclosures to be made on the use and management of the sustainable bond proceeds, and on the process for project evaluation and selection. Insofar as sustainability-linked bonds (SLBs) are concerned, ESMA’s expectation is that information relating to, inter alia, the selected key performance indicators (KPIs) and the sustainability performance targets (SPTs), are disclosed in the prospectus.

Consistency of disclosures in prospectuses and advertisements

Having observed that some issuers include sustainability-related information in advertisements pertaining to the offer of securities which is not included in their prospectus, ESMA notes that if such sustainability-related disclosure is material, it should first be included in the prospectus. ESMA further highlights the importance of ensuring that information disclosed in advertisements is consistent with that disclosed in the prospectus, as required under the Prospectus Regulation.  

Next steps

ESMA’s statement is a timely reminder to national competent authorities, issuers and advisers, of the sustainability-related disclosures to consider when drafting and reviewing prospectuses, in preparation of further disclosure requirements envisaged upon the coming into force of specific EU legislative proposals.  

The capital markets team at Camilleri Preziosi will continue monitoring further guidance and developments in this context with a view to ensuring that when assisting prospective issuers with the drafting of prospectuses in accordance with the Prospectus Regulation, the expectations set by ESMA as regards sustainability-related disclosures are met.

For further information, please get in touch with Malcolm Falzon ( and Louisa Firman (