ESMA publishes findings from its CSA on MiFID II sustainability aspects

The European Securities and Markets Authority (ESMA) has published a statement setting out the results of its common supervisory action (CSA) with national competent authorities on the integration of sustainability in firms' suitability assessment and product governance processes and procedures under the Markets in Financial Instruments Directive (MiFID II). ESMA announced the launch of the CSA in October 2023, and the exercise took place over the course of 2024 and 2025. The statement summarises the results of the CSA, highlights the key themes that have emerged from the work and provides some high level interim supervisory expectations on a few key areas to foster consistent implementation while reducing burden during the current transition period.

The findings from the CSA indicate that firms have made progress in integrating the MiFID II sustainability requirements into their suitability and product governance processes; however, practices remain uneven across firms and jurisdictions and further improvements are required in several areas. ESMA emphasises the continued importance of embedding sustainability requirements, while acknowledging that the sustainable finance framework is undergoing significant revision. It calls on national competent authorities to adopt a proportionate supervisory approach, fostering dialogue with firms to address identified issues during the transition period rather than prioritising enforcement actions, except for cases involving clear breaches or misselling. ESMA will consider the results of this work in the context of any future updates of the MiFID II Delegated Acts on sustainability and the related updates of the ESMA guidelines on suitability and product governance, with the aim of simplifying the framework where appropriate and supporting more consistent and effective application of the relevant requirements.

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