On May 2nd, the European Commission published a Call for Evidence on the revision of the rules on sustainable finance disclosures. DUFAS has submitted a response to this consultation.
We welcome the opportunity to respond to the European Commission’s Call for evidence on revision of the rules on sustainable finance disclosures, published 2 May 2025. The Call for evidence acknowledges the broad market support for improving the Sustainable Finance Disclosure Regulation (SFDR). It echoes our earlier feedback, in which we expressed our view that the current SFDR framework is not achieving its primary goals and that a number of elements should be adjusted in order to be better able to achieve the goals set by the SFDR. In our response to the Call for evidence, we highlight several key recommendations. In short, these are:
- The revision of the SFDR should be guided by data relevance and availability. This should be focused on one comprehensive set of the most critically relevant datapoints, that are integrally aligned within the entire Sustainable Finance Framework. Consequently, a sufficient level of availability of relevant data should be supported by the on-going review of the Corporate Sustainability Reporting Directive (CSRD) and the related European Sustainability Reporting Standards (ESRS).
- Standardized sustainability disclosures should apply to all financial products, to enhance comparability and to create a level playing field between all products. We also underline the importance of both consumer and industry testing of any revised disclosure requirements.
- Product categorization should be fit to cater to all products under the SFDR and not imply communication restrictions for uncategorized products. This is of crucial relevance to long-term, multi asset products like pension schemes. These products will most likely only be able to meet the thresholds of a category for parts of their portfolio.
- Transition finance needs to be supported by the SFDR, with a key focus on the energy and climate transitions, but with the option to broaden the approach to other environmental or social transitions. We also ask the Commission to recognize that there are current market practices that include in transition finance also those economic activities that enable and support the energy and climate transitions. This is crucial in order to avoid that these important investments are discouraged because of how the categories are designed.
- Coherence between all parts of the Sustainable Finance Framework is crucial to support consistency of application and to avoid reporting and administrative overlap. Key concepts such as 'sustainable investment' need to be harmonized and clearly defined. We also ask the European Commission to confirm that mandatory sustainability-related requirements for financial products and services are covered only by targeted financial sector legislation, which, in turn, should be fully aligned with the requirements targeting corporate transparency and behavior in the real economy.
