By Lora Froud, Tiffany Cox, Emma Garnham and Gavin Haran from Macfarlanes LLP, a London-based law firm.
On 14 September 2023, the European Commission published a targeted consultation questionnaire to gather feedback prior to proposing potentially fundamental changes to the Sustainable Finance Disclosure Regulation (SFDR). The extent of questions posed points to an "SFDR 2.0", and mirror many of the proposals under the UK's proposed Sustainability Disclosure Requirements (SDR).
What's discussed?
The key themes on which feedback is sought by the Commission are listed below.
• Changes to existing disclosures
The Commission seeks feedback on the utility of the existing entity-level disclosures, the cost impact of SFDR disclosure obligations generally, whether it should impose uniform product-level disclosures for all financial products offered in the EU (e.g. on certain principal adverse impact indicators), regardless of their sustainability-related claims or other considerations, and on ESG data usage challenges and the use of estimates in meeting current disclosure obligations.
• Sustainability product categories
The Commission acknowledges that while SFDR was designed as a disclosure regime, the use of SFDR in practice as a labelling regime (with Article 8 and 9 used as de facto product labels) suggests there might be demand and merit in designing explicit product categories.
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