Europaudvalget 2024-25
EUU Alm.del Bilag 517
Offentligt
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MINISTER FOR INDUSTRY,
Danish government response to the European Commission’s call for
evidence for an impact assessment on the SFDR
Dear Commissioner Albuquerque,
The Danish government appreciates the opportunity to provide input on the
European Commission’s call for evidence.
We agree that the SFDR plays an important role in directing investments
towards the green transition and that there is a need to improve the current
regulation to ensure that the sustainability disclosures generate the neces-
sary value for investors.
In this regard, a strong focus on simplification, streamlining, and burden
reduction in the upcoming revision is needed. It is important to ensure con-
sistency across regulations. This should be a particular focus in the SFDR
review, as a consistent framework is needed to support the growth of green
and sustainable capital flows. In this regard, ensuring consistency between
the Corporate Sustainability Reporting Directive (CSRD), the EU Taxon-
omy, and SFDR is of particular importance, and the outcome of the nego-
tiations of the reporting omnibus should be taken into account in the SFDR
proposal.
Product categories
We agree that there is a need to introduce product categories for financial
products with sustainable features. Proper product categories with clear
minimum criteria for sustainability will make it easier for investors to com-
pare products and to be confident that all products with sustainability-re-
lated claims do in fact contribute to a sustainable economy.
However, we ideally prefer to only introduce two product categories (e.g.
a “sustainable” category and a “transition” category), as we believe this
will make the regulation simpler and easy to use and understand for retail
investors. Introducing a third category for products with only some degree
of sustainability characteristics can give investors a misleading impression
of a somewhat sustainable product although the criteria for investments to
be included in the product can be very low. This entails a risk of perceived
greenwashing.
The product categories should be based on the existing concepts of the
SFDR such as “sustainable investments” and “principle adverse impact in-
dicators”. The current definition of sustainable investments in the SFDR is
principle based and provides flexibility to the financial market participants
in assessing the sustainability of their investments.
BUSINESS AND FINANCIAL
AFFAIRS
MINISTRY OF INDUSTRY,
BUSINESS AND FINANCIAL
AFFAIRS
Slotsholmsgade 10-12
1216 Copenhagen K
Denmark
Tlf.
+45 33 92 33 50
Fax.
+45 33 12 37 78
CVR-nr. 10092485
EAN nr. 5798000026001
[email protected]
www.em.dk
 EUU, Alm.del - 2024-25 - Bilag 517: Notat og høringssvar vedr. Kommissionens call for evidence ifm. revision af disclosureforordningen (SFDR)
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Simplification, streamlining, and burden reduction
In revising the SFDR, the Danish government encourages the Commission
to focus on the following proposals related to simplification, streamlining,
and burden reductions:
1. Limit SFDR to product disclosures
•
The SFDR currently has disclosure requirements for financial mar-
ket participants at both entity level and product level, even though
an investor invests in the financial product and not in the financial
market participant. The need for the disclosure requirements at en-
tity level in Articles 3, 4, and 5 should be reassessed in order to
gather disclosures at entity level in the CSRD. This will simplify
the regulation and decrease the burdens by ensuring a better con-
sistency between the different legislations. The disclosure require-
ments on PAI in Article 4 could be kept in a simplified manner,
focusing on the PAI at the product level, e.g. in the pre-contractual
and periodic disclosures.
2. Simplify PAI disclosures and ensure consistency and alignment
across the sustainable finance regulation
•
The SFDR is not aligned with the consideration of materiality in the
CSRD. The principle of materiality in CSRD should also be applied
in the SFDR regarding the assessment of PAI etc. Consequently,
there should only be disclosed about investee companies provided
that the information is relevant and significant
1
. While information
regarding greenhouse gas emissions will often be a relevant indica-
tor to disclose, this is not the case for all indicators. Some infor-
mation might not be relevant for all types of companies and the dis-
closures regarding certain indicators will therefore not always be
relevant for assessing the
material
negative impact.
•
Furthermore, the current PAI-indicators of the SFDR should be re-
assessed in the light of the Omnibus proposal negotiations and the
necessary consequential changes should be made to ensure full
alignment between the disclosure requirements. The simplification
of the ESRS in the CSRD will substantially reduce the number of
mandatory data points, which could potentially also affect the PAI-
reporting according to article 4 of the SFDR and the DNSH-test
according to article 2(17).
3. Remove disclosure requirements on sustainability risk pro-
cesses
1
The Commission has addressed this in the FAQ on the CSRD from august 2024 (question 90) but
we propose that it should be included in the review of the SFDR.
 EUU, Alm.del - 2024-25 - Bilag 517: Notat og høringssvar vedr. Kommissionens call for evidence ifm. revision af disclosureforordningen (SFDR)
•
•
The disclosure requirements on the integration of sustainability risk
in article 3 and article 6(1)(a) were included in the SFDR at a time
where there was a strong need for nudging the financial market par-
ticipants into addressing sustainability risks more explicitly in their
risk management. However, since the adoption of the SFDR, the
prudential regulation largely has made this a “hard requirement” for
both insurance companies, banks, fund managers etc. reducing the
need for a nudging effect in the SFDR. The disclosure requirements
in articles 3 and 6(1)(a) should therefore be deleted since infor-
mation regarding the way that sustainability risks are integrated in
the investment decision seems less relevant for the investor. This
will also reduce the reporting burdens for the financial market par-
ticipants.
The disclosure requirement in article 6(1)(b) should, however, be
kept as information about the likely impacts of sustainability risks
on the return of the financial products seems more relevant for the
investor compared to information regarding the way that sustaina-
bility risks are integrated in the investment decision.
4. Reduce the scope by exempting AIFMs and products targeting
professional investors
•
Registered AIFMs and products solely marketed towards profes-
sional investors are generally subject to a less strict regulation with
less consumer protection compared to products marketed towards
retail investors. The same should be the case regarding sustainabil-
ity disclosures. Professional investors can generally be expected to
have a more extensive dialogue with the financial market partici-
pant and a more in-depth understanding of the financial product
compared to retail investors. We would therefore suggest to explic-
itly exempt registered AIFMs and products only targeting profes-
sional investors from making disclosures under the SFDR. This will
also reduce the reporting burdens for those financial market partic-
ipants. These products could, however, be given the flexibility to
voluntarily comply with the requirements in the SFDR, if they wish
to do so. Alternatively, the financial market participant could be re-
quired to provide the information to the investor upon request.
We look forward to the upcoming work on the revision of the SFDR and
stand ready to share experiences to ensure a more effective use of the reg-
ulation.
Any questions can be raised via email to Jonas Wulff [email protected].