Groupe BPCE

EXCUTIVE SUMMARY The European Commission's new SFDR proposal is pragmatic, striking a commendable balance between prescriptiveness and flexibility. The three categories ("ESG basic," "transition," "sustainable") represent more marketable terminology, though their contents require clarification and the French translation of "ESG basic" warrants consumer testing.

An in-dept SFDR review presents significant business opportunities, as scaling up sustainable finance equates to scaling up overall finance. It should incentivize asset managers and insurers to launch products while encouraging clients to invest. It would be beneficial to include structured products in SFDR if the revised regulation is effectively designed.

European economys financing needs are expected to rise significantly in the coming years, exceeding 1.2 trillion per year, notably to support the energy transition, defence and digitilisation. It has become even more obvious that public funding cannot bridge this gap alone.

BPCE is in favor of the Commission's initiative to empower retail investors in the CMU but believes that some proposals need to be amended first. First, the EC objective of improving financial education is essential.

BPCE group welcomes the proposed regulation of ESG ratings agency activities to enhance their transparency, integrity as well as their comparability and usability, which is essential for financial institutions and investors. of ratings and scoring. We are supporting its compatibility with IOSCO recommendations on the integration in a proportionate manner of third-country rating agencies.