"(...) The European Securities and Markets Authority (ESMA) has produced useful work quantifying the proposed extension of the voluntary EU Ecolabel to retail financial products.
Only 16 out of some 3,000 sustainability-orientated UCITS equity funds – i.e. funds reporting under the Sustainable Financial Disclosures Regulation (SFDR) Article 8 and 9 – are estimated to meet three main quantitative criteria set forth in the latest report from the European Commission. (...)
(...) First and foremost, thresholds could initially be lowered to account for the current state of the transition and ramped up over the medium-to-long term to remain sufficiently challenging as the transition is implemented in the economy.
Second, the necessity of applying ESG exclusions beyond what is already required under the EU Taxonomy should be challenged.
Third, activity thresholds and engagement policy should be approached together to allow for a wider range of sustainability investing and impact strategies.
Finally, the data and administrative burden should be kept fit-for-purpose and reasonable. The regulator should make every effort to develop the public and truly open-source provision of sustainability data.
Frédéric Ducoulombier is director of the EDHEC-Risk Climate Impact Institute (...)"
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