TLDR
The European Fund and Asset Management Association (EFMA) and the Global Sustainable Investment Alliance (GSIA) have called for the European Commission to merge its two planned reviews of the Sustainable Finance Disclosure Regulation (SFDR). SFDR is one of the major pieces of regulation to come out of the European Union’s sustainable finance agenda, and aims to improve transparency and increase sustainability in financial markets. However, the regulation has been criticized for being unclear, complex, and difficult to implement. By merging the two reviews, the EFMA and GSIA hope to make the regulation more cohesive and user-friendly.
Key points
- The EFMA and GSIA have called for the European Commission to merge the two planned reviews of the SFDR.
- Merging the reviews would create a more cohesive and user-friendly regulation.
Article
The European Fund and Asset Management Association (EFMA) and the Global Sustainable Investment Alliance (GSIA) have called for the European Commission to merge its two planned reviews of the Sustainable Finance Disclosure Regulation (SFDR). SFDR is one of the major pieces of regulation to come out of the European Union’s sustainable finance agenda, and aims to improve transparency and increase sustainability in financial markets.
However, the regulation has been criticized for being unclear, complex, and difficult to implement. The EFMA and GSIA argue that by merging the two reviews, the European Commission could create a more cohesive and user-friendly regulation. This would make it easier for asset managers and investors to understand and comply with SFDR requirements.
The first review of SFDR is scheduled to take place in 2020, and will focus on technical standards and regulatory technical standards. The second review is planned for 2022, and will assess the overall functioning and effectiveness of SFDR. The EFMA and GSIA believe that merging these two reviews would be more efficient and effective than conducting them separately.
The EFMA and GSIA have also called for greater clarity and consistency in SFDR reporting requirements. They argue that the regulation should be more specific about what information needs to be disclosed, and how it should be presented. This would help to ensure that investors have access to the information they need to make informed decisions about the sustainability of their investments.
In addition, the EFMA and GSIA have called for the European Commission to provide more guidance on how to interpret and implement SFDR requirements. They argue that the regulation is currently open to interpretation, which can lead to inconsistencies in reporting and confusion for market participants. Clear guidelines and examples would help to address this issue and ensure more consistent and accurate reporting.
The EFMA and GSIA’s call for the merging of SFDR reviews reflects a growing concern within the industry about the complexity and practicality of the regulation. Many asset managers and investors have expressed frustration with SFDR, and have called for greater clarity and simplicity in its requirements. By merging the two reviews, the European Commission could help to address these concerns and make SFDR a more effective tool for promoting sustainability in financial markets.
