BETTER FINANCE responds to the European Commission Consultation on the Revision of EU rules on sustainable finance disclosure
BETTER FINANCE welcomes the European Commission’s plan to revise the SFDR to fix its complexity, legal gaps, and greenwashing risks. As the voice of EU citizens as financial services users, we back a clearer, simpler, and more effective framework that helps individual investors make informed sustainable investment decisions.
The SFDR has fallen short of its goals due to vague definitions, regulatory overlap, excessive complexity, and persistent data gaps. These issues have led to confusion, inconsistent application across the EU, and weakened investor trust.
To address these shortcomings, BETTER FINANCE backs a clear, investor-first product categorisation with three labels: “sustainable”, “transition”, and “unclassified”. Moreover, we emphasize that investor engagement must be mandatory to ensure products deliver real-world impact. Engagement cannot remain optional, as evidence demonstrates that active stewardship is what truly moves the needle. Investors must know their money is part of the solution, not just a label.
We urge the Commission to introduce legally binding definitions, align the SFDR with the CSRD, and prioritise simplified, comparable disclosures. Simplification must go beyond word count - it should raise quality, reduce greenwashing, and keep EU markets strong. Only then can the SFDR fulfil its purpose and drive private capital toward Europe’s sustainable future.