European Commission Publishes Call For Evidence On SFDR

What has been published and why?

On 2 May 2025, the European Commission published a Call for Evidence seeking feedback from interested stakeholders on its initiative to reform the SFDR.

It intends to publish its legislative proposal to reform the SFDR in Quarter 4 of this year.

What is in the Call for Evidence?

The Call for Evidence is very high-level with no specific questions posed by the European Commission on the functioning of the SFDR.

In line with the European Commission's broader simplification and competitiveness mandate, it notes that the objective of the SFDR reform is to simplify and streamline requirements and to focus on the provision of information that is most meaningful to investors. It also acknowledges the need to ensure coherence between the revised SFDR regime and the potential changes being introduced to reporting obligations under the CSRD and EU Taxonomy frameworks¹.

The Call for Evidence provides interested stakeholders with a final opportunity to give feedback on the possible options for the revised SFDR framework. The European Commission notes that this could comprise of (i) targeted changes and clarifications being made to existing SFDR disclosure requirements or (ii) a more far-reaching review of the framework which would involve the establishment of a product categorisation regime which reflects different sustainability objectives of financial products. As we understand it, three categories are currently being considered by the European Commission for a possible product categorisation regime, namely (i) a sustainable category, (ii) a transition category and (iii) a category covering products contributing to other ESG strategies.

The European Commission also acknowledges feedback received from its 2023 consultation on the need for the revised SFDR framework to cater for different investor groups and types of financial products and to take better account of the international reach and exposures of investments. Interestingly, it has also noted the broad support received for the revised framework to direct investment towards diverse sustainability-oriented aims, including investments which support not only the transition to a more sustainable economy but also support "other objectives such as security", presumably in light of increasing geopolitical challenges currently faced by the European Union.

What happens next?

Interested stakeholders have until 30 May 2025 to respond to the Call for Evidence via the European Commission's portal.

The European Commission has noted that feedback to the Call for Evidence will inform the impact assessment which it must conduct before it finalises its legislative proposal to reform the SFDR.

Footnote

1. For an overview on the changes proposed by the European Commission to the CSRD and the EU Taxonomy delegated acts, please refer to our detailed briefing on the topic available here

Originally published 06 May 2025

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