The EACB welcomes the opportunity to comment on the European Commission’s proposal to review the Sustainable Finance Disclosure Regulation (SFDR) as part of the broader simplification agenda.
Overall, the EACB supports the objective of streamlining the framework and reducing unnecessary complexity. In particular, it welcomes the proposed reduction of product-level disclosure requirements, the simplification of reporting obligations, and the removal of certain definitions, which together contribute to a more workable and proportionate regime for financial market participants.
At the same time, the EACB underlines the importance of ensuring that simplification does not lead to inconsistencies or gaps in the broader sustainable finance framework. In this regard, strong alignment between the revised SFDR and related legislation, notably MiFID II, is essential. A coordinated and timely revision of sustainability preference assessments is necessary to avoid confusion for end-investors and to ensure a level playing field across financial products and services.
The EACB also stresses that data availability remains a key challenge. The current evolution of the regulatory framework risks creating significant data gaps, increasing reliance on external ESG data providers. To address this, clearer rules and stronger accountability for data providers are needed, alongside a realistic calibration of data requirements reflecting market realities.
Regarding the proposed product categorisation system, the EACB broadly supports the introduction of three categories, provided that sufficient flexibility is preserved and that the framework remains practical. However, several elements require further clarification, including the calibration of thresholds, the treatment of different asset classes (such as sovereign bonds and structured products), and the risk of overly restrictive criteria limiting product feasibility and diversification.
In particular, the EACB highlights concerns about the treatment of transition finance, the functioning of the ESG Basics category, and the potential rigidity of requirements under the Sustainable category. It also calls for clearer methodological guidance and a more proportionate approach to exclusions to support the financing of the transition.
The EACB further emphasises the importance of appropriate sequencing and timing of the revised framework. Level 1 and Level 2 measures should enter into force simultaneously, accompanied by sufficient transitional periods to allow for orderly implementation and to minimise costs. Early availability of technical standards and the possibility to discontinue soon-to-be-removed requirements during the transition phase would significantly ease the operational burden.
Finally, the EACB calls on policymakers to ensure that the revised SFDR framework provides legal certainty, adequate flexibility, and effective investor protection, while supporting the financing of the sustainable transition and avoiding unintended obstacles to key policy objectives.