Possible problems with SFDR

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Here’s an excerpt from this note by Harald Walkate about this article (that buttresses a series of articles that Harald has written on this topic with Florian Heeb):

– If we want to close the funding gap for SDGs, we need public-private collaboration.
– We can’t rely on SFDR for this because SFDR doesn’t support “impact investment”.
– SFDR is also ineffective in protecting consumers – it makes consumers MORE confused and makes greenwashing MORE likely.

Selected quotes:
– EU financial regulators’ efforts to police environmental impact claims are ineffective and create a greater risk of greenwashing.
– Sustainable finance rules do not accommodate the concept of investor impact and consequently are not aligned with the theories of attribution differentiating (…) company impact and investor impact.
– SFDR has simply introduced marketing labels which create additional confusion.
– The assessment is likely to be disappointing (ESG-understatement-of-the-year?) for policymakers at the EU Commission who just last month claimed that “greenwashing is over” (ESG-overstatement-of-the-year?)
– We haven’t got a chance of meeting the SDGs or delivering net zero promises without mobilising private capital on a serious scale.
– At the heart of this is trying to find new models of collaboration for those 2 worlds of public and private, to help them talk the same language and find ways of working together to allow this capital to flow.
– If we need to mobilise a lot more money into areas of high impact, especially into emerging economies and frontier markets, then the private side is entirely entitled to ask the public sector for a a serious conversation about how we how they structure those opportunities.