Sustainable Finance Disclosure Regulation review

Key points

The EESC recommends to:

• ensure that any simplification of sustainable finance legislation, including disclosure requirements, does not weaken the contribution of the financial system and its credit and investment products to achieving the objectives of the European Green Deal within the legally bound timelines, and does not weaken measures against greenwashing; 
• uphold the credibility and integrity of the Sustainable Finance Disclosure Regulation (SFDR) by maintaining the exclusions set forth within the Commission´s review proposal and relying on recognised ecological as well as social standards; 
• retain a highly streamlined and standardised set of entity-level disclosures, limited to information that cannot be meaningfully derived from product-level reporting; 
• require category-wide disclosures against a limited and standardised set of PAI-related indicators, with the objective of reducing the proliferation of bespoke, product-specific metrics; 
• elevate the role and integration of stewardship across the SFDR;
• retain managed portfolios within the definition of financial products under the SFDR;
• preserve the disclosure-based approach to recognising impact investing within the transition and sustainable categories, while strengthening credibility through clearer safeguards;
• strengthen transition plan requirements under the transition category’s eligibility criteria. Sustainable financing criteria should require companies to adopt a credible plan for phasing out fossil fuels and particularly coal, aligned with the Paris agreement;
• guarantee alignment with the broader sustainable finance framework, ensuring that product categories do not contradict EU climate and energy policy objectives.