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  • 1.  SFDR Updates

    Posted 19-12-2023 11:26
    Edited by Francesca Wheble 19-12-2023 11:27

    Please see a brief overview of the latest SFDR update

    • A Final report was published this month which follows on from April 2023 consultation paper.
    • We do not know applicability date.
      • EU has 3 months to decide whether it wants to endorse this report then will be put through the legislative process.
      • May be 2025
    • Changes:
      • Changes to pre-contractual & periodic disclosures
        • Dashboard
        • Decarbonisation disclosures
      • PAI regime (10 new social indicators)
        • 3 new mandatory indicators
          • Earnings in non-cooperative tax jurisdictions,
          • Exposure to tobacco,
          • Employees earning less than adequate wage)
        • 7 new optional indicators
        • Quantitative thresholds required
        • Application of safe harbour approach for Taxonomy aligned investments
      • Machine readability
      • Use of estimates allowed for Taxonomy

    Francesca Wheble
    Responsible Investment Analyst

  • 2.  RE: SFDR Updates

    Posted 05-02-2024 10:26
      |   view attached

    Hi everyone,

    Sharing here the Eurosif's responce to SFDR.

    Eurosif states that overall SFDR improved transparency on the integration of sustainability risks and consideration of investment decisions and financial advice. However, it faces challenge s due to unclear definitions and misuse by market participants for product classification. Eurosif suggests a review of the SFDR to address these issues, proposing improvements such as clearer definitions, mandatory disclosure requirements for all financial products, and the creation of formal product categories based on sustainability objectives. Eurosif recommends three categories: "sustainable investments", "transition investments", and "binding environmental and/or social factors". The goal is to enhance comparability, prevent misleading claims, and align with other EU Sustainable finance regulations.

    Aya Pariy

  • 3.  RE: SFDR Updates

    Posted 22-02-2024 13:56

    Two days ago, on Feb 20, the French regulator AMF shared their vision for the future of SFDR. Key points from their proposal include:

    1. Setting up minimum objective criteria for categorization of financial products, eliminating the room for interpretation. The objective criteria could include minimum thresholds for the investment in taxonomy-aligned companies. Such criteria would ensure that financial products, belonging to the same category, achieve a minimum level of contribution to sustainability factors, which would improve comparability across the products.
    2. Four label categories are proposed: environmental solutions, social solutions, climate transition and non-financial filters. AMF also believes that label categories should be expanded over time with an addition of  new categories (e.g. biodiversity transition) that would reflect evolution of sustainable finance trends.
    3. Types of sustainability risks to be considered and the expected disclosures relating to the methodology used to quantify their impact on product return must be specified.
    4. Entity level disclosures should be eliminated from SFDR as they are already covered by CSRD. Instead, SFDR disclosure requirements should focus at product level as product level information is more beneficial for investors with sustainability preferences.

    From a perspective of FinTech vendors that produce software for mandatory ESG disclosures, introduction of minimum objective criteria (particularly those that can be quantified) can be viewed as a positive development, which may create new business opportunities. 

    The impact on Financial Market Participants directly affected by SFDR remains a topic of interest. What are your thoughts on AMF's proposal? 

    Anastasia Kuznetsova
    Associate Business Analyst

  • 4.  RE: SFDR Updates

    Posted 22-02-2024 18:57

    Hi everyone,

    Thank you for sharing your responses and insights on SFDR 2.0 consultation. It's truly interesting to see the various perspectives and approaches from different actors/ association/ regulators regarding the overhaul of the SFDR framework regarding product classification.

    WeeFin has also respond to the consultation. In our response, we highlighted several key proposals that reflect our unique vision on the matter:

    1. We propose the removal of articles 6, 8, and 9 in favor of a more unified and transparent reporting system, applicable to all funds. To achieve this, we suggest using yes/no responses or checkboxes with more concise and quantitative explanations for "yes" responses, along with a necessary improvement plan for "no" responses.

    2. We also advocate for the establishment of a minimum set of requirements to ensure consistency and prevent greenwashing, including measures such as coal exclusion, engagement, and fund-level PRI reporting.

    3. Additionally, we suggest harmonizing definitions with other regulations for better clarity and efficiency.

    These proposals aim to achieve several essential objectives:

    • Facilitate fund comparison and readability for the end investor.
    • Encourage the adoption of best practices.
    • Make fund ESG strategies understandable.
    • Improve the utilization of this reporting.
    • Allow room for national labels to provide additional assurance on fund strategies.

    If you want to know more :

    I'll be delighted to read your opinions!

    Sabrine Aouida
    Chief Impact Officer