Workers will now be safeguarded from radiation hazards thanks to the Commission's adopted directive on radiation protection.
European Financial Regulators Call for Tighter Rules Against Greenwashing
Frankfurt - In a joint statement, the supervisory authorities of the Netherlands (AFM), Germany (BaFin), and Austria (FMA) have urged the European Commission to revise the Sustainable Finance Disclosure Regulation (SFDR). The call comes in response to concerns that the current rules are insufficient in preventing companies from making false sustainability claims, a practice commonly known as greenwashing.
The regulators propose a stricter definition of what constitutes a sustainable investment. They also advocate for clearer guidelines on how companies should disclose their sustainability practices. Moreover, they suggest establishing a common classification system for sustainable activities and requiring companies to report on their contributions to these activities.
Without clear rules, the authorities warn, companies may use greenwashing to give the appearance of sustainability without taking meaningful action. The letter, sent on September 30, 2021, was signed by the heads of the respective agencies.
The proposed revisions are aimed at preventing greenwashing while improving clarity, reducing regulatory burdens, and ensuring better alignment with the broader EU sustainable finance framework. The European Commission is currently considering targeted clarifications to the existing SFDR disclosure requirements, streamlining and simplification, and international considerations.
The revised SFDR is expected to be more robust against greenwashing by providing clearer rules, better data, and a more consistent framework for sustainable finance disclosures. The call for evidence closed in May 2025, and the revised SFDR is scheduled for publication in the European Commission’s work program for Q4 2025.
The enrichment data suggests that the current SFDR lacks clear definitions for key concepts, leading to confusion and inconsistent application in practice. Some disclosure requirements have limited relevance and overlap or conflict with other EU sustainable finance regulations, complicating compliance. Limited data availability has hindered effective monitoring and enforcement, increasing the risk of greenwashing. Certain sectors or products are unintentionally excluded or penalized due to how rules are applied, creating gaps and mismatches in sustainability objectives. The revision seeks to address these issues by providing clearer rules, better data, and a more robust framework for sustainable finance disclosures.
- The regulators from the Netherlands, Germany, and Austria urge the European Commission to revise the Sustainable Finance Disclosure Regulation (SFDR) in the business sector, aiming to establish a more robust framework against greenwashing.
- In their call for tighter rules, these European Financial Regulators advocate for clearer guidelines in finance, including a stricter definition of sustainable investments, clearer disclosure of sustainability practices, and a common classification system for sustainable activities.
