Investment - Articles - Call for simpler clearer SFDR

 The federation supports the SFDR’s aim to improve transparency and help investors make informed decisions. However, it believes current rules are too complex, unclear and often duplicate existing EU legislation. The framework should be made simpler and more practical.

 Insurance Europe calls for Principal Adverse Impacts (PAIs) disclosures - the negative impacts caused by a financial market player or their financial product on the environment and society – to be significantly simplified and aligned with the Corporate Sustainability Reporting Directive to avoid creating additional administrative burden.

 The federation argues that if the European Commission is to proceed with the introduction of a labelling system, it must be workable and inclusive, ensuring that firstly any categorisation framework is simple, clearly defined, and thoroughly consumer tested.

 Secondly, any product categorisation system must include a realistic implementation timeline, with a grandfathering period for existing products and an initial voluntary phase to allow market participants to adapt.

 And finally, the framework should also be fully aligned with related legislation, such as the Insurance Distribution Directive (IDD) and MiFID II, to ensure consistency with investor preference assessments.

 Insurance Europe notes that it is ready to help the Commission build a simpler, clearer, and more effective sustainable finance framework that works for consumers and insurers.