“If I look at every single country in Europe, it is obvious that the SFDR is rapidly becoming a common language for the European sustainable investment market,”
The European Sustainable
Investment Forum (Eurosif), is expecting the European Commission’s renewed
sustainable finance strategy to be launched on 6 July, said Victor van Hoorn,
Eurosif’s director, during a Swiss Sustainable Finance (SSF) market study
virtual presentation yesterday.
The Commission will layout the
policy programme for the period 2021-2024. Eurosif expects a “stronger focus on
sustainability risks to the financial system”, on financial stability and
institutions, prudential framework for insurance and pension funds and climate
stress tests.
The revised strategy will also
focus on transition finance, which will be an important aspect with regards to
the move to carbon neutrality by 2050, he said.
“We may see something about
labelling, a renewed focus on engagement, ESG rating and data providers, and on
corporate reporting,” van Hoorn added.
Looking back, the
implementation of the Sustainable Finance Disclosure Regulation (SFDR) has been
challenging, van Hoorn said, but it has offered a new framework for the
industry, with “transparency and comparability” being the two main drives of
the legislation, he added.
“If I look at every single
country in Europe, it is obvious that the SFDR is rapidly becoming a common
language for the European sustainable investment market,” he said.
Eurosif perceives, however,
that market participants are facing a series of challenges with regards to
sustainable finance rules.
“Data availability and quality
of investee companies remain a challenge [and] the second challenge relates to
individual firms making decisions to how classify products,” van Hoorn said.
The risk is a fragmentation of
the European market, with national regulators adopting “local guidance” to
classify products, he explained, adding that discussions have been unfolding on
this front in Germany and Spain, and other regulators may follow suit.
Eurosif expects over the summer
to see the final technical standards on the SFDR that will spell out in more
detail the requirements for market participants, he said.
IPE
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