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.
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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.
An unprecedented decision was made at the Municipal Court in Prague in the historically first Czech climate litigation, for which Frank Bold Advokáti provided legal expertise.
The Czech government presented five key priorities it wants to focus on during the Presidency of the Council of the European Union, beginning on 1 July. The priorities include post-war reconstruction of Ukraine, energy security, strengthening European defence and cybersecurity, as well as the resilience of the European economy and of democratic institutions. However, according to Frank Bold experts, there is a lack of emphasis on the green transition - which is crucial for both energy security and economic resilience.
European companies can now take a look at the draft sustainability reporting standards they will report against in the coming years. The drafts were developed by the EFRAG Project Task Force on EU Sustainability Reporting Standards, with the participation of two Frank Bold representatives - Head of the Responsible Companies Section Filip Gregor, and Joanne Houston, from Frank Bold's Brussels office. Both experts will continue contributing to the development of the EU standards as members of the newly established EFRAG Sustainability Pillar.
