Strengthening implementation and reducing complexity
We emphasize the importance of a smooth and speedy transition to the revised framework. Clear and timely implementation rules, including sufficient transition periods and alignment with other legislation such as MiFID II, are essential to allow market participants to adapt efficiently and focus resources on developing high-quality sustainable products.
Safeguarding data quality and introducing proportionality
Reliable ESG data is critical to the success of the SFDR. We call for stronger safeguards around third-party data providers and a more balanced allocation of responsibilities between data providers and financial market participants. In addition, proportionality should be embedded in the framework to reflect limitations in data availability across asset classes.
Enhancing comparability through a core set of mandatory indicators
To improve transparency and comparability across products, we support the introduction of a limited mandatory set of sustainability indicators applicable to all product categories. This should be complemented by flexibility for additional, strategy-specific indicators, ensuring disclosures remain decision-useful while reflecting different investment approaches.
Ensuring consistency across the EU regulatory framework
We stress the need for greater consistency between the SFDR and other key elements of the EU sustainable finance framework, including the Climate Benchmarks as well as MiFID II and IDD requirements on sustainability preferences. Consistent rules - particularly regarding product criteria and exclusions - are essential to support a level playing field, avoid regulatory fragmentation, and ensure clarity for both investors and market participants.
A meaningful integration of social safeguards and investor engagement activities
We support the inclusion of social minimum safeguards but calls for a more nuanced and workable approach. The current proposal's binary exclusion model risks misrepresenting real-world practices and limiting the ability of investors to engage with companies to drive improvement. We therefore propose to consider a focus on severe violations rather than broad classifications, a recognition of due diligence processes and risk-based approaches, and the explicit acknowledgment of engagement as a key tool across all product categories. This will better reflect how investors contribute to sustainable outcomes in practice.
Supporting a robust and future-proof SFDR
Overall, we believe that the SFDR review is a crucial opportunity to refine the framework into a clear, consistent and practically implementable system that supports both transparency and real-world impact. By addressing targeted improvements -particularly on implementation, data quality, comparability, regulatory alignment, and social safeguards - the EU can ensure that the SFDR becomes a strong foundation for sustainable finance in Europe.
