Financial sector associations warn that EC proposals will limit number of sustainable products available for consumers

Financial sector associations warn that EC proposals will limit number of sustainable products available for consumers

Joint letter 

BRUSSELS, 27 July – A group of financial sector associations – including the European Banking Federation – has written to the European Commission to warn against its proposals to introduce a new definition of “sustainability preferences” across the delegated acts of MiFID II, the Insurance Distribution Directive (IDD) and Solvency II.

While supporting the Commission’s aim of creating a strong framework for investment that supports the transition to sustainability, insurers have serious concerns that these proposals, as currently drafted, will, in fact, restrict customers’ access to sustainable finance by unduly limiting the range of products that insurers are able to offer them.

The issue is that, while the Commission’s proposal for the definition of sustainability preferences is based on the product categories under the Sustainable Finance Disclosure Regulation (SFDR), it adds extra criteria – regarding adverse impacts and sustainable investment criteria – for products that promote sustainable characteristics, but that do not necessarily have a sustainability objective.

This would result in a group of sustainable products that would comply with the stringent requirements of the SFDR, but that cannot be offered to a customer who expresses a desire for a sustainable product due to the additional criteria the Commission is proposing.

Therefore, these newly proposed requirements on eligible products are inconsistent with the SFDR’s objectives and should be removed. Otherwise, they would hamper the ability of the financial sector to offer products that support and accelerate the transition to a more sustainable economy.

MEDIA CONTACT:

EBF Media Centre, press@ebf.eu, +32 2 508 3732

ABOUT THE EBF:

The European Banking Federation is the voice of the European banking sector, bringing together national banking associations from across Europe. The EBF is committed to a thriving European economy that is underpinned by a stable, secure and inclusive financial ecosystem, and to a flourishing society where financing is available to fund the dreams of citizens, businesses and innovators everywhere. Website: www.ebf.eu