Book contents
- The Cambridge Handbook of EU Sustainable Finance
- The Cambridge Handbook of EU Sustainable Finance
- Copyright page
- Contents
- Figures
- Tables
- Contributors
- Preface
- Acknowledgements
- Part I Introduction
- Part II Ethics and Sustainability in Corporate Law, Corporate Governance and Conduct
- Part III Integrating Sustainability in Financial Markets Regulation
- 10 Sustainability-Related Materiality in the SFDR
- 11 Information Intermediaries and Sustainability
- 12 On the Sustainability of the MiFID II and IDD Investor Protection Frameworks
- 13 The EU Taxonomy Regulation and the Prevention of Greenwashing
- 14 Integrating Sustainable Finance into the Prospectus Regulation
- 15 Disclosure Regulation and Sustainability
- 16 Institutional Investors as the Primary Users of Sustainability Reporting
- 17 The Role of Non-Financial Disclosure and Liability in Sustainable Finance
- Part IV Ensuring Financial Stability and Sustainability
- Part V Financial Innovation and Sustainability
- Index
- References
10 - Sustainability-Related Materiality in the SFDR
from Part III - Integrating Sustainability in Financial Markets Regulation
Published online by Cambridge University Press: 30 January 2025
Book contents
- The Cambridge Handbook of EU Sustainable Finance
- The Cambridge Handbook of EU Sustainable Finance
- Copyright page
- Contents
- Figures
- Tables
- Contributors
- Preface
- Acknowledgements
- Part I Introduction
- Part II Ethics and Sustainability in Corporate Law, Corporate Governance and Conduct
- Part III Integrating Sustainability in Financial Markets Regulation
- 10 Sustainability-Related Materiality in the SFDR
- 11 Information Intermediaries and Sustainability
- 12 On the Sustainability of the MiFID II and IDD Investor Protection Frameworks
- 13 The EU Taxonomy Regulation and the Prevention of Greenwashing
- 14 Integrating Sustainable Finance into the Prospectus Regulation
- 15 Disclosure Regulation and Sustainability
- 16 Institutional Investors as the Primary Users of Sustainability Reporting
- 17 The Role of Non-Financial Disclosure and Liability in Sustainable Finance
- Part IV Ensuring Financial Stability and Sustainability
- Part V Financial Innovation and Sustainability
- Index
- References
Summary
This chapter analyses the EU Sustainable Finance Disclosure Regulation (SFDR) by proposing that we should think about the SFDR as a layered system of sustainability-related disclosures, which combine the concepts of “single materiality” and “double materiality”. The authors offer a new perspective on popular proposals to turn the SFDR into a labelling scheme but argue that supervisors should avoid such avenues. The chapter emphasises that it is not the definition of “sustainable investment” which is relevant, but the additional disclosure requirements that apply as soon as a financial market participant deems its financial product to be in line with the definition. The SFDR encourages robust internal assessments over blind reliance on opaque ESG rating agencies and provides financial market participants with the freedom to justify what a contribution to an environmental or social objective means. This freedom sets it apart from a labeling mechanism with a clearly defined threshold of what a contribution should entail. The chapter also analyzes proposed guidelines by ESMA for regulating the names of investment funds that involve sustainable investment, and concludes that those guidelines do not create a clear labelling regime.
Keywords
- Type
- Chapter
- Information
- The Cambridge Handbook of EU Sustainable FinanceRegulation, Supervision and Governance, pp. 251 - 279Publisher: Cambridge University PressPrint publication year: 2025
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