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The European Council has now agreed its negotiating mandate on SFDR 2.0. In several areas, it represents a significant regression from the Commission's proposal and the Parliament's subsequent draft report.
Whereas the Parliament's draft report acknowledged and closed the loopholes we flagged in our analysis of the Commission’s November proposal, the Council is reopening them.
Nonetheless, the Council position still holds the line in certain respects, such as maintaining the non-categorised product disclaimer, as well as the mandatory core Principle Adverse Impact (PAI) indicators, although now only requiring the three PAIs most relevant for the product. The details are left for Level 2 legislation to determine.
In addition, a systemic gap remains with entity-level SFDR disclosures being out of scope across the Commission, Parliament and Council positions. Combined with a possible CSRD/ESRS exemption for asset managers, large parts of the investment sector risk escaping meaningful sustainability reporting altogether.
The Parliament's ECON committee will vote on the Parliament's official position on 15 July, with a plenary vote expected in September. Trilogue negotiations are set to open in Q4 2026, with Level 1 agreement targeted by year-end — followed by Level 2 technical standards developed with ESMA.
Due diligence is a precondition for the sustainable activities as defined by the EU Taxonomy and green financing under the Sustainable Finance Disclosure Regulation, including green bonds. Particular ESG due diligence requirements will be regulated by the forthcoming Sustainable Corporate Governance Directive. To help companies better understand its scope and to clarify its requirements, Frank Bold is hosting a webinar. It will feature international experts from companies such as Ericsson and outdoor clothing manufacturer Vaude. We invite you to join us on 26 January at 10 am CET.
In mid-December, the European Commission acknowledged a large part of the arguments put forward by the Czechia in an effort to prevent the expansion and continuation of illegal mining at the Turów mine in Poland, that endangers the sources of drinking water for thousands of people in the Liberec region and, according to new studies, has serious impacts on groundwater in Germany as well. Frank Bold's lawyers, who defend the interests of Czech citizens, have long been involved in the case.
The Frank Bold Society and the Neighbourhood Association Uhelná called on the Czech government today to be more consistent in its negotiations with Poland over mining at the Turów brown coal mine. According to both organisations, the government did not have enough information or time to prepare an agreement that would truly protect Czech interests. Moreover, the government has acted in a non-transparent manner by failing to inform the public in advance of the terms of the agreement being prepared, which should lead to the withdrawal of the action against Poland at the EU Court of Justice. The organisations have therefore drawn up a document with seven basic demands on which the Czech side should insist.
