Finance Watch

Finance Watch welcomes the opportunity to react to the draft act on the revised European sustainability reporting standards. Finance Watch supports the close alignment of the European Commissions draft act with the technical advice provided by EFRAG.

Finance Watch welcomes the Commissions proposal for a revision of the SFDR. Minimum criteria for the SFDR product categories, the distinction between transition and sustainable investments, and improvements in the clarity of sustainability disclosures will support the transparency and the understandability of the framework for retail investors.

Finance Watch welcomes the opportunity to respond to the call for evidence on the revision of the Sustainable Finance Disclosure Regulation (SFDR). The SFDR has played an important role in raising awareness and paving the way for the sustainable finance framework. However, the design of the SFDR as a pure disclosure framework has quickly proven to have limits.

Finance Watch welcomes the proposal for a Regulation on the establishment of a framework to facilitate sustainable investment. We would like to point out that the message in the recital number 28 should be further clarified. It is important for the Commission to clarify how the consideration of stranded asset risk is going to impact the choice of the criteria for environmentally sustainably activities.

Finance Watch welcomes the EC proposal for a Regulation on disclosure relating to sustainable investments and sustainability risks and amending Directive (EU) 2016/2341. Climate change is the greatest threat to the global financial stability, given its double nature as idiosyncratic and systematic risk.

Finance Watch is glad to provide the following contribution to the public consultation on the EC proposal for a regulation amending Regulation (EU) 2016/1011 aimed at defining low carbon benchmarks and positive carbon impact benchmarks.

The concept of “best interest” should be defined at the EU level to include both financial and non-financial benefits. In other words, we believe that it should be made clear that the utility of investors can depend on both financial and non-financial returns.

The concept of “best interest” - as mentioned in the art. 24 (paragraph 1) of MIFID II and art. 54 of Delegated Regulation (EU) 2017/565, should be defined at the EU level to include both financial and non-financial benefits. In other words, we believe that it should be made clear that the utility of investors can depend on both financial and non-financial returns.

Finance Watch welcomes the European Commissions initiative to address barriers hindering climate action, urging the alignment of both private and public EU finance with climate objectives. We emphasise the need for financial reforms to support climate resilience and risk management, highlighting the dual role of financial institutions as both enablers of economic activity and amplifiers of climate risk.

Finance Watch welcomes the holistic integration of the Do not Significant Harm (DNSH) principle into the next Multiannual Financial Framework (MFF). This approach builds on the continued integration of the DNSH principle into EU public finance architecture, as was the case under the Recovery and Resilience Facility, and more recently in the 2024 Financial Regulation.

For this Call for Evidence, we attach a document with sources and evidence that Finance Watch has found relevant to the Commissions initiative. Finance Watch encourages the Commission to use this initiative to tidy up banking regulation in ways that promote capital strength, system resilience and lending to productive economic activities.

Finance Watch welcomes the European Commission’s forthcoming evaluation and impact assessment on the retail investment strategy. Improvements are needed to the EU retail investor protection framework to ensure that EU citizens can safely invest in capital markets, both online and offline. Please find our full feedback in the attached document.

Finance Watch welcomes the initiative of the EU co-legislators to proceed with the implementation of the final instalment of the Basel III standards. We note, however, that the primary and overarching objective of the Basel III process – to restore financial stability and protect EU citizens and society at large from excessive risk-taking in the banking sector – is no longer mentioned as a policy objective in the…

Finance Watch welcomes the European Commission's initiative to revise the Shareholder Rights Directive (SRD) to reduce fragmentation across capital markets and remove barriers that currently hinder cross-border investment within the Single Market. Finance Watch sees the SRD as instrumental to: 1.

Finance Watch is generally very supportive of the document prepared by the Commission. In particular, we welcome the following points, which we consider to be very important: - The positive and important role that consumer protection plays in boosting consumer confidence in the use of credit; - The importance of a market from which dangerous products should be excluded, along with exploitative practices; - The…

The proposals for a review of the insurance sector’s prudential regulation feature a major inconsistency with respect to addressing the systemic risk dimension. On the one hand, they recognise the systemic nature of the sector by introducing, in a most welcome move, a directive establishing a framework for the recovery and resolution for insurance and reinsurance companies.

Please refer to the attached submission document, which is based on evidence collected as part of the Finance Watch report on groups of citizens that are at particular risk of financial exclusion and discrimination - https://www.finance-watch.org/wp-content/uploads/2020/03/FW-Report_Vulnerable_Groups_March2020.pdf The submission raises the specific issue of overlaps in the requirements in the 5th EU anti-money…

Finance Watch welcomes the Commissions initiative to expand the scale and improve operational conditions for EU venture and growth capital funds. Targeted policy initiatives such as the revision of the European Long-Term Investment Fund (ELTIF) Regulation and the European Venture Capital (EUVeCa) Regulation have the potential to channel private capital into innovation, in particular for the transition to a more…