The European Fund and Asset Management Association (EFAMA) published its response to the European Commission’s proposed amendments to the Sustainable Finance Disclosure Regulation (SFDR 2.0), backing the direction of travel on simplification while warning that implementation choices could undermine both burden reduction and the transition-finance objective. EFAMA, which represents an industry managing over EUR 33 trillion, supports clear product categories, simplified product-level disclosures, removal of entity-level principal adverse impact (PAI) reporting, and closer alignment with MiFID and the Insurance Distribution Directive sustainability preferences. EFAMA argues that discontinued requirements, particularly entity-level PAI reporting, should stop applying as soon as the revised rules enter into force, rather than being kept temporarily during transition. It also calls for new obligations to apply only once the necessary technical standards are available, with an implementation timeline of at least 18 months to avoid repeated disclosure changes. On product categorisation, EFAMA raises “serious concerns” about proposed minimum exclusion criteria that go beyond the existing EU baseline under the European Securities and Markets Authority fund naming guidelines and the Climate Transition Benchmark requirements, citing analysis suggesting around 90–95% of the global energy sector and up to 50–60% of emerging market utilities could be excluded from transition-categorised products. EFAMA also argues that general-purpose sovereign bonds should remain eligible for the ‘Transition’ and ‘Sustainable’ categories subject to robust, transparent assessment methodologies, and calls for greater transparency expectations for ESG data providers, an opt-out for products marketed exclusively to professional investors, and consumer testing of implementing measures aimed at retail investors.
European Fund and Asset Management Association 2026-03-04
European Fund and Asset Management Association urges EU co-legislators to align SFDR 2.0 exclusions and allow realistic implementation timelines
EFAMA supports the European Commission's proposed SFDR 2.0 amendments but warns that implementation choices could undermine objectives. It advocates for clear product categories, simplified disclosures, and alignment with MiFID and the Insurance Distribution Directive, while expressing concerns over exclusion criteria affecting the energy sector. EFAMA calls for ending entity-level adverse impact reporting and stresses an 18-month implementation timeline.