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WWF Critiques European Commission’s SFDR Revision for Weak Sustainability Safeguards

On November 20, 2025, WWF raised strong concerns about the European Commission’s new SFDR revision. WWF claims the proposal aims to guide investments toward sustainability but weakens the hard checks needed for the EU’s 2030 climate and nature goals.

Key Issues Highlighted by WWF

• Inadequate Safeguards: The Commission groups products into three tiers. These tiers are for sustainable products, transition products, and ESG basics. WWF says the rules for each tier stay too weak. This weakness lets funds with little green action count as sustainable. The ESG basics tier does not have an end date. This gap may allow funds to use ESG labels without strict rules.

• Fossil Fuel Inclusion: The rules ban coal investments in ESG basics. They also stop fossil fuel growth for sustainable and transition tiers. Yet, policies let oil and gas grow in ESG basics. WWF warns this choice hurts climate trust.

• Investor Misguidance Risks: The new rules do not clearly warn investors about non-categorised products. This lack of warning may confuse investors. In addition, only transition products require clear plans to boost company sustainability. But 85% of big investors already use formal engagement plans.

Positive Steps

WWF notes a useful change in the proposal. An optional “impact” feature now exists for transition and sustainable products. This feature asks funds to share how they measure and manage social and environmental impacts. This change meets the need of about half of retail investors who want real-world proof.

WWF’s Call to Action

Thibault Girardot, Sustainable Finance Policy Officer at WWF European Policy Office, calls for a cleaner revision. He demands scientific accuracy and strong practices. WWF asks Member States and the European Parliament to change the draft. They must make sure SFDR directs funds toward truly sustainable outcomes instead of backing low-ambition products and confusing investors.

Background: SFDR and Sustainable Finance in the EU

The SFDR gives clear rules for how finance firms share sustainability risks and impacts. The Commission wants to tighten these rules to fit the EU Green Deal goals. The aim is to push funds that help climate, biodiversity, and social efforts. WWF stresses that strict, enforceable rules are needed to reach these goals.

For more details on sustainable finance policies and their environmental impact, visit WWF’s Sustainable Finance page.

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