Can financial products with a passive investment strategy which designate as a reference benchmark either a Paris Aligned Benchmark or (from 1 January 2023) a Climate Transition Benchmark automaticall

According to Article 9(3) SFDR, where a financial product has a reduction in carbon emissions as its objective, the information to be disclosed pursuant to Article 6(1) and (3) SFDR shall include the objective of low carbon emission exposure in view of achieving the long‐term global warming objectives of the Paris Agreement. According to Article 9(3) second subparagraph, where no EU Climate Transition Benchmark or EU Paris‐aligned Benchmark in accordance with Regulation (EU) 2016/1011 of the European Parliament and of the Council is available, the information referred to in Article 6 shall include a detailed explanation of how the continued effort of attaining the objective of reducing carbon emissions is ensured in view of achieving the long‐term global warming objectives of the Paris Agreement. Accordingly, where financial products are passively tracking Paris Aligned Benchmarks (PABs) and Climate Transition Benchmarks (CTBs), it can be considered they do not fall under Article 9(3) second subparagraph. Consequently, financial market participants do not have to provide a detailed explanation of how the continued effort of attaining the objective of reducing carbon emissions is ensured in view of achieving the long‐term global warming objectives of the Paris Agreement, as these products are deemed to have sustainable investments as defined in Article 2, point (17) SFDR as their objective. Financial market participants must explain why they consider that products focused on carbon emissions reduction that are actively managed, i.e. that do not strictly track a PAB or CTB, have sustainable investment as their objective.