We've compared the different positions of the European Commission, Council of the EU and the European Parliament on the review of the SFDR. Read below our recommendations for this trilogue.
Trilogue negotiations on the SFDR review are due to start on 22 October and envisioned to finish by the end of 2026.
Parliament's text is the strongest of the three on most issues. Its main weakness is ESG Basics: retail investors receive a single indicator on fossil fuel exposure and little other information from which to assess performance, which risks perpetuating the catch-all character of Article 8 under SFDR 1.0.
.png)
Below, we set out our three priorities for the trilogue and the specific solutions we recommend to address them.
Parliament requires a single indicator for ESG Basics, exposure to the fossil fuel sector, and this must be retained. We ask that Parliament's own Transition wording be applied to Article 8, so that ESG Basics products report GHG emissions and fossil fuel exposure, together with one further indicator selected for relevance. This corresponds to the three indicators required by Council for Transition and Sustainable.
Council limits the effect of safe harbour to points (a) to (c) of the first subparagraph, so that PAI disclosure under point (d) continues to apply to products using the bypass. Parliament deems all conditions met. We ask the co-legislators to support the Council's scope.
The Commission proposal contains no opt-out, and we ask the co-legislators to maintain this position. If an opt-out is retained, Parliament's version is preferable to Council's, because it requires that no retail investor has access to the fund and requires a pre-contractual statement of non-categorisation.
More than a half of the energy consumed in the EU is used to heat and cool homes, offices, shops and other premises. In the context of the EU's efforts to reduce emissions, the decarbonisation of the heating sector is therefore inevitable. But how to achieve a successful transformation of the heating sector in the Czech Republic? We have reviewed examples of community heating plants abroad and outlined solutions applicable in CZ as well.
By the end of July, the European Commission is expected to adopt its first set of sustainability reporting standards (ESRS). The standards will impact 50,000 European companies and thousands international corporate groups. As part of the EU Corporate Sustainability Directive (CSRD) ecosystem, they will require large companies to report information on their sustainability impacts on people and planet as well as their sustainability-related risks and opportunities.
Last Friday, the European Commission published for public consultation a draft Delegated Act on the first set of European Sustainability Reporting Standards. NGOs, civil society groups and investors associations are very concerned with the significant reduction of the ambition compared to EFRAG’s technical advice and urge the Commission to introduce a robust, mandatory and consistent reporting framework and to not allow greenwashing.
