The European Federation of Investors and Financial Services Users (Better Finance), the European Consumer Organisation (BEUC) and the NGO Finance Watch are calling on the European Commission to remove the “ESG (environment, social and governance) Collection Category” from the framework of the SFDR regulation on sustainable finance disclosures, in a press release published on Monday 24 February.
While they welcome the proposal of the Platform on Sustainable Finance to categorise financial products under the SFDR, these organisations have “serious concerns” regarding the proposed ‘ESG Collection Category’ and the absence of mandatory engagement requirements for professional ESG investors. They believe that these two elements risk misleading investors.
“While the ESG Collection category aims to exclude harmful investments, its broad definition risks repeating the same greenwashing issues”, they warn. In the absence of clear impact requirements, the organisations fear that companies will continue to market unambitious ‘ESG’ offerings, leading investors to think that their money is driving meaningful change in the real economy. (Original version in French by Anne Damiani)