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DRAFT REPORT (COM(2025)0841 – C100308/2025 – 2025/0361(COD))

On the proposal for a regulation of the European Parliament and of the Council amending Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (SFDR), Regulation (EU) No 1286/2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs) and repealing Commission Delegated Regulation (EU) 2022/1288

ECON-PR-787886

Committee on Economic and Monetary Affairs · Rapporteur: GerbenJan Gerbrandy

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This is the rapporteur's draft report on the Commission proposal to amend Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (SFDR) and Regulation (EU) No 1286/2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs), and to repeal Commission Delegated Regulation (EU) 2022/1288. The draft resolution adopts Parliament's first-reading position and calls on the Commission to refer the matter to Parliament again if it replaces or substantially amends its proposal. The amendments add packaged investment product manufacturers to the definition of financial market participants, carve financial advisers out of scope, and require a minimum 70% of investments in each category to match the sustainability-related claim. They require mandatory principal adverse impact indicators for categorised products, a statement that non-categorised products do not meet EU standards for defining sustainable financial products, and disclosure of sustainability-related engagement strategies. They raise the taxonomy-alignment threshold from 15% to 20%, remove the benchmark safe harbours, and set application 24 months after entry into force, with burden-reduction provisions applying from entry into force.

Committee position. The rapporteur proposes to amend the Commission proposal to enhance transparency, effectiveness and burden relief. The amendments add mandatory principal adverse impact indicators, require a 70% minimum investment threshold, raise the taxonomy-alignment threshold to 20%, remove benchmark safe harbours, and apply burden-reduction provisions from entry into force.

Key points

  1. Financial market participants would include manufacturers of packaged investment products, while financial advisers providing investment advice would be carved out of the scope of Regulation (EU) 2019/2088.
  2. A minimum portion of 70% of investments by financial products in each category must be made in accordance with the sustainability-related claim; the remaining investments may be freely allocated but must not contradict the claim.
  3. Financial market participants must document their use of data sources and external and in-house estimates and provide clients with information on such use upon request.
  4. The amending Regulation would apply 24 months after entry into force, except provisions narrowing the scope of Regulation (EU) 2019/2088 and removing entity-level disclosures on principal adverse impacts and remuneration policies, which would apply from entry into force.
  5. Non-categorised products may refer to ancillary sustainability information, but it must not be prominent, must not feature in the name or marketing communications, and must be accompanied by a statement that the product does not meet EU standards for defining sustainable financial products.
  6. Financial market participants must use the mandatory principal adverse impact indicators established under the delegated act adopted pursuant to Article 19b, and must complement them with indicators material for the investment; other indicators may be disclosed voluntarily.
  7. The conditions for taxonomy-aligned investments would be met at a proportion of 20% or higher, replacing the 15% threshold.
  8. The safe harbours for financial products replicating or managed in reference to an EU climate transition benchmark or an EU Paris-aligned benchmark would be deleted.
  9. Investments in issuances by public sector bodies outside the threshold must be consistent with the stated sustainability-related objective or strategy of the financial product.
  10. For 'ESG basics', investments must outperform the average investment universe or reference benchmark after eliminating at least 20% of the lowest-rated securities or lowest values for the chosen indicator.
  11. Financial market participants must disclose a description of their sustainability-related engagement strategy and how it aligns with the product's objectives, or explain why they do not pursue one.
  12. The Commission must review every 36 months the need to adjust the proportion of taxonomy-aligned investments, and delegated acts must be suitable for retail investors and not exceed two pages for certain disclosures.

Who is affected

  • Financial market participants, including manufacturers of packaged investment products, must meet new disclosure and categorisation rules.
  • Financial advisers providing investment advice are carved out of the scope of Regulation (EU) 2019/2088.
  • Retail investors receive clearer information, including statements on whether products meet EU standards for defining sustainable financial products.
  • PRIIP manufacturers must include categorisation or a non-sustainability statement in key information documents.

Figures and deadlines

  • 70% minimum portion of investments in each category must be made in accordance with the sustainability-related claim.
  • 20% threshold for taxonomy-aligned investments, replacing 15%.
  • 24 months after entry into force for the amending Regulation to apply.
  • 36 months after the date of application for the Commission's first review and every 36 months thereafter.
  • At least 20% of the lowest-rated securities or lowest values for the chosen indicator must be eliminated.
  • Disclosures must not exceed two pages, and certain information must not exceed one page.

Legal basis: Article 294(2) and Article 114 of the Treaty on the Functioning of the European Union.