On 14 September, the European Commission launched both a public consultation and a targeted consultation on the implementation of the Sustainable Finance Disclosure Regulation (SFDR).

The Commission aims to understand how the SFDR has been implemented since its initial application in March 2021, as well as to gain an understanding of its potential deficiencies, and to explore potential improvements of the European framework for sustainable finance. These consultations form part of the Commission’s comprehensive assessment of the SFDR framework that was first announced by Commissioner Mairéad McGuinness in December 2022. While the public consultation is addressed to a wide range of individuals and organisations with a general knowledge of the SFDR, the targeted consultation is aimed at financial market participants (FMPs), investors, NGOs, public authorities, regulators, and others that are either subject to the provisions of the SFDR or otherwise have an in-depth knowledge or experience in the area of sustainable finance disclosures.

The topics covered by the consultations include consideration of the current requirements of the SFDR and the interactions with other sustainable finance legislation. The targeted consultation additionally looks at potential changes to the disclosure requirements for FMPs and the potential categorisation system for products. The range of issues covered by both consultations is broad, ranging from concerns over costs to data shortcomings to clarity of requirements. The targeted consultation also considers the imposition of uniform disclosure requirements for products without reference to sustainable investment objectives or promotion of environmental or social characteristics. It also looks at options for the establishment of a categorisation system, which would see the framework move away from being a disclosure regime.

Both consultation periods are now open and will close on 15 December. They will be complemented by workshops and roundtables in the period. Responses may be submitted online.