On 26 January, ESBG co-signed a joint letter with other financial associations to ask for the consistency of SFDR level 1 and level 2 reviews

The Commission conducted a consultation on the comprehensive SFDR review (Level 1) in December 2023 (which ESBG answered to) and recently received the SFDR draft Regulatory Technical Standards (RTSs – level 2) from the European Supervisory Authorities (ESAs). The Commission has now 3 months to adopt the RTSs, or ask the ESAs for modifications.

In that respect, our associations are concerned about the lack of coordination of these major review projects under SFDR that puts investors’ confidence in sustainable investment solutions and the reliability of the EU standards for sustainable disclosures at risk. Therefore, it is critical that the level 1 and level 2 reviews of the SFDR are fully coordinated to guarantee legal certainty and deliver a successful law-making process, preventing overlapping and doubling efforts.

The letter also recalled that the SFDR is a part of a larger set of regulatory initiatives (including the Corporate Sustainability Reporting Directive, Taxonomy Regulation, Corporate Sustainability Due Diligence Directive and European Single Access Point) which are interconnected, but the infrastructure between these different sets of regulation is still not in place, and full Principal Adverse Impact (PAI) reporting only started in June 2023. Hence, adding further requirements or amending just implemented standards at this stage is premature.

The associations believe that a period of stability is necessary to avoid confusion for financial market participants, consumers and investee companies

ESBG's letter PDF

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