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Brussels, Belgium
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The European Fund and Asset Management Association (EFAMA) is actively engaged in the EU on sustainable finance policy while not supporting stringent regulatory intervention.

EFAMA has stated support for the role of the finance industry in meeting EU climate goals but has not clearly stated the need for financial sector reform. Since the launch of the EU Sustainable Finance Action Plan in 2018, EFAMA has stated broad support for policy on sustainable finance but has often argued to weaken detailed legislative proposals.

In 2018-19, EFAMA was particularly engaged on the taxonomy regulation, stating support for the policy but arguing that its use in disclosure requirements should be voluntary, that it should be only applicable to products marketed as sustainable rather than the whole market, supporting a delay to implementation and arguing for the weakening of thresholds that would define what investments can be considered sustainable. In consultation responses to the Commission in 2020, EFAMA opposed the creation of a taxonomy of environmentally harmful activities and appeared to support the weakening of the forestry criteria under the taxonomy.

In consultation responses in 2019, EFAMA argued for weaker exclusion thresholds for fossil fuels in the EU’s proposed labels for climate benchmarks. In consultation responses to the JRC in 2020, EFAMA argued for weaker green criteria and exclusion thresholds under the EU’s Ecolabel.

In position papers in 2016 and 2017, EFAMA opposed the need for regulation to clarify the inclusion of ESG issues in fiduciary duty. In 2018-19, EFAMA argued for weaker regulation that would implement this across a range of policies including MiFID II, Solvency II and IDD. EFAMA also supported a delay to regulation on disclosure of the integration of ESG issues into the investment process in a meeting with the Commission in 2019 and again in a letter to the Portuguese council presidency in 2020. In response to the ESA’s consultation on investor ESG disclosure in 2020, EFAMA argued for a less prescriptive approach, including a reduced number of mandatory indicators. In response to the Commission in 2020, did not appear to support further action to incorporate adverse ESG impacts into fiduciary duty.

Despite this, and aligned with its view that regulatory intervention on climate change and other sustainability issues should be focused on the 'real economy', EFAMA has been highly supportive of the need to improve regulated corporate ESG disclosure, which it views as an important prerequisite for action from the asset management industry on climate. In 2020, EFAMA advocated for an ambitious update to the Non-Financial Reporting Directive (NFRD) in a joint statement to policymakers and in response to a European Commission consultation. In 2021, EFAMA reiterated its strong support for the Corporate Sustainability Reporting Directive (CSRD), the successor of the NFRD.

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