The three European Supervisory Authorities (EBA, EIOPA and ESMA – ESAs) have published a joint opinion on the assessment of the Sustainable Finance Disclosure Regulation (SFDR).
The ESAs have called for a coherent sustainable finance framework that caters for both the green transition and enhanced consumer protection, taking into account the lessons learned from the functioning of the SFDR.
The ESAs focus on ways to introduce simple and clear categories for financial products. The simplifications consist of two voluntary product categories, ‘sustainable’ and ‘transition’, that financial market participants should use to ensure consumers understand the purpose of the products.
The ESAs recommended that the European Commission consider the introduction of a sustainability indicator that would grade financial products such as investment funds, life insurance, and pension products.
The opinion also called for improvements to the definition of sustainable investments and simplification to the way disclosures are presented to investors, along with many more.
