Running from the 2nd till the 30th of May, the European Commission launched a call for evidence to advice them in their efforts to revise the EU rules on sustainable finance disclosure. The initiative was aimed at simplifying the framework, enhancing its usability and preventing greenwashing.
Wikirate International submitted the following response:
The SFDR's vagueness and complexity has meant that the regulation has not delivered on its promise to clarify what are sustainable investments and funds. Wikirate International welcomes simplifications that will help strengthen the usefulness of the regulation and reliability of disclosures, whilst calling for caution to avoid it becoming a superficial tick-box exercise or worse, a tool to green-wash investments and mislead (retail) investors.
Wikirate International therefore urges the European Commission to make 3 key changes:
- In strong agreement with the EU Platform on Sustainable Finance, we stress the need to exclude companies that are investing in new fossil fuel-related infrastructure from all environmental or social fund categories.
- Clarify the minimum criteria for a fund to be classified as having 'sustainably-oriented aims’ (including those investing in companies ‘at earlier stages of transition) by setting minimal requirements for the different ESG claims like “green/sustainable”, “transition” and “impact”.
- Align transparency and advisory obligations as proposed by Reclaim Finance, through principal adverse impacts (PAIs) adjustments and changes to the Directive on markets in financial instruments (MiFid) adjustments.
Photo by micheile henderson on Unsplash