AMICE welcomes the European Commission’s proposal to revise the Sustainable Finance Disclosure Regulation (SFDR) to improve legal clarity and consumer understanding. Consumers are the focal point of our members’ activities; it is essential that all proposals consider all aspects of truly improving the regulation for consumers’ benefit.

We call for a more proportionate, coherent and workable SFDR that reflects the realities of insurance-based investment products and supports long-term, risk-appropriate savings for European consumers.

• 70% threshold: a more proportionate and flexible approach is needed
• Insurers’ traditional products and general account products, including the treatment of sovereign bonds: this remains consistent, workable and reflective of insurers’ long-term investment strategies, subject to certain improvements
• Multi-option products: the proposed approach risks limiting consumers’ access to sustainable investment options and creates uncertainty over responsibility between insurers and asset managers
• Transition products: the proposed criterion on deriving no more than 1% of profitability from fossil fuel activities may hinder true progress to real-economy decarbonisation, and should be replaced with forward-looking transition metrics, contingent on credible transition plans and including transparent reporting on progress and outcomes
• The safe harbour provision: the proposals should support transition in practice by introducing an alternative or complementary safe harbour recognising investment in sustainability-related fixed-income instruments, including green, social, sustainability and sustainability-linked bonds
• Scope of the exemption for “closed-ended type” products: interpretative ambiguity may lead to uncertainty about what the exemption specifically applies to, which should be clarified to all products closed to new subscription and not just technically close-ended products
• Level 2 measures and implementation uncertainty: Level 1 cannot function without the timely publication of Level 2 measures, so implementation deadlines should only be triggered once all Level 2 standards are finalised and published, after a sufficient consultation period and robust consumer testing
• Data availability: data requirements need to be in line with Corporate Sustainability Reporting Directive (CSRD) timelines and proportionality, including a proportionate calibration of Article 12a
• Consumer information and template design: templates need to be accessible and easily understood, so consumer testing is key to ensuring clarity, accessibility and usability
• Implementation timeline: the plethora of different aspects of change, including Level 2 requirements, the volume of change and cross-framework coordination will be resource heavy, and we propose the implementation period should be extended from the proposed 18 months to 24 months
• The need for regulatory coherence: there needs to be full alignment with Markets in Financial Instruments Directive (MiFID), Insurance Distribution Directive (IDD), packaged retail and insurance-based investment products (PRIIPs) and the CSRD, and to establish this, the revised SFDR should only be implemented after cross-framework alignment is achieved
• Transitional arrangements regarding entity-level disclosures: we call for an EU-level no-action letter to confirm that financial market participants will not be subject to enforcement action should they choose not to publish entity-level PAI statement during the transitional period.
• Following this review, the SFDR will create a clearer, more reliable and consumer-friendly framework. Important adjustments reflecting insurance-based investment products, safeguarding prudential requirements and providing consumers with meaningful and comprehensible information will make it better calibrated to reach its objectives.

Read AMICE’s Position Paper in full.