EFAMA calls for major reforms to SFDR labelling regime
The industry group praised the transparency introduced by SFDR, but said the de facto labelling regime had 'stretched it beyond its original intentions and not always been helpful'.
In a statement yesterday (21 December), the industry group praised the transparency introduced by SFDR, but said the de facto labelling regime had «stretched it beyond its original intentions and not always been helpful».
«The current European Commission review needs to address how SFDR can provide clearer, more meaningful information for retail investors, promote transition finance and align well with other relevant legislation,» it argued.
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In September, the European Commission launched a consultation on overhauling SFDR, which it said could see the Article 8 and 9 labels scrapped in favour of a new labelling regime.
EFAMA supported this proposal, advocating for an official categorisation using objective measures such as a description of the product's intentions and ESG strategies in use, as well as the specification of credible KPIs.
This would also involve making the categories understandable to retail investors, which EFAMA said should be pursued by aligning changes in SFDR with investor sustainability preferences under MiFID and IDD.
A simplified and standard disclosure template for all financial products with sustainability claims should also be introduced, it added, and the information made more accessible to retail investors.
In addition, EFAMA called for transition finance to be clearly defined and integrated within SFDR, with the group arguing this would «incentivise investments that help companies moving towards a more sustainable business
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