Enhancing Coherence in the EU Sustainable Finance Disclosure Regulation (SFDR) Framework

Summary:

The European Supervisory Authorities (ESAs) have put forth recommendations to enhance coherence in the Sustainable Finance Disclosure Regulation (SFDR) framework. The primary objectives of the SFDR are to increase transparency in sustainable investment products, facilitate informed decision-making, and promote sustainability. The current framework faces challenges including inconsistencies and ambiguities in definitions, reporting practices, and regulatory requirements. To address these issues, the ESAs recommend harmonizing definitions, standardizing reporting practices, and simplifying regulatory requirements. These measures aim to enhance transparency, trust, comparability, and reduce the compliance burden on financial institutions. The implementation of these recommendations is crucial to promoting sustainable finance and enabling informed decision-making by investors.