The Sustainable Finance Beirat (SFB), Germany’s sustainable finance advisory group, has put forward recommendations to amend the Sustainable Finance Disclosure Regulation (SFDR), and the Corporate Sustainability Reporting Directive (CSRD).
The European Commission this week presented its work plan for 2025, confirming an omnibus package to simplify sustainability rules including the CSRD but delaying an SFDR review proposal.
The German advisory body sees “room for improvement” for parts of the CSRD, it said in a position paper published yesterday, adding that the implementation of the regulation is “a big challenge” for companies.
The Beirat has suggested improving the CSRD by reducing the number of data points required, especially for small and medium-sized companies, with a focus on meaningful, quantitative performance indicators, the paper added.
Moreover, it recommends the introduction of “sector-wide materiality analyses” and sector-specific reporting obligations that can bring additional benefits.
The expert group suggested limiting the scope of the reporting with regard to consolidation and value chains, providing templates for transition plans or clear and simple guidelines, and adopting the German implementation law.
The German government, which has called on the European Commission to scale back sustainability reporting regulations, has yet to transpose the CSRD as national law.
Bettina Storck, member of the SFB, said: “We have [put forward] ideas for a reduction, specification and correction of the CSRD requirements. Only with comparable, reliable and relevant data can sustainability be taken into account in company or portfolio management.”
On Tuesday, the SFB published another position paper including suggestions to amend the SFDR.
The SFDR should include a uniform and “practicable” definition of sustainable investments, that also takes strongly into account investments to transition to a climate-neutral economy, and that includes investments in “social products and services”, it said.
Linking a sustainability preference survey under MiFID II/IDD with the EU Taxonomy and elements of the SFDR creates problems, particularly when it comes to market sustainable investment products, the paper stated.
The experts recommend boiling down questions on the sustainability preference of investors to one: “To what extent should sustainability aspects be taken into account in your investments?”.
It also suggests listening to the demands of market players and changing categories for sustainable Investment products.
The advisory group is suggesting four categories including sustainable, transition (environmental and social), a so-called “basis category”, with the provider defining the characteristics of the investment and exclusions based on the Climate Transition Benchmark (CTB), and a category listing investments without sustainability features.
Antje Schneeweiß, co-chair of the SFB’s working group on sustainable finance regulation, said the four product categories for investment funds would give investors clearer guidance.
In Germany, the SFDR applies to Pensionskassen and Pensionsfonds, two vehicles offering occupational pensions. The CSRD applies to Pensionskassen and Pensionsfonds established in the legal form of a stock corporation (Aktiengesellschaft).
The latest digital edition of IPE’s magazine is now available
Luigi is IPE's Berlin-based DACH correspondent.
His coverage includes regulation and the latest pensions and investments trends, and, being a native Italian, he also covers Italy’s pensions market.
He has reported from Italy and Germany on international politics and business for European and US publications including USA Today, Bloomberg BNA and for the investigative magazine L’Espresso. He was previously Germany correspondent for Mergermarket covering M&A.View full Profile
No comments yet