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European Commission’s SFDR Revision Falls Short on Safeguards, Says WWF

On November 20, 2025, WWF Europe raised concerns. They critiqued the Commission’s new SFDR revision. WWF sees serious flaws. These issues can weaken the EU’s sustainable investment drive.

Key Concerns: Weak Safeguards and Ambiguous Criteria

The updated SFDR sets three categories:

• Sustainable products – firms show clear, strong sustainable goals.
• Transition products – firms work to reach sustainability.
• ESG basics – firms meet basic risk controls with minor sustainable hints.

WWF warns the groups lack strict checks:

• The rules barely drop companies causing environmental harm.
• There is no firm rule to push real sustainable action.
• The broad ESG basics group might hold low-aim funds, tricking investors and stopping money from real impacts.

Also, the plan does not force all firms to share how they seek sustainability. Investors could unknowingly fund harmful practices.

Partial Progress: Impact Measurement and Fossil Fuel Exclusions

The revision adds one needed option. For sustainable and transition products, firms can measure and report their impact. This step meets growing investor needs. Investors want to see clear, real outcomes.

The proposal bars fossil fuel expansion from sustainable and transition groups. It also bans coal in the ESG basics group. These cuts help the climate. Yet, WWF notes that oil and gas can still fit in ESG basics. This gap risks the law’s climate goals.

WWF’s Call to Action

Thibault Girardot, WWF’s Sustainable Finance Policy Officer, said the revision needs science-based standards and clear integrity. Without these, the SFDR may mislead investors. It might also miss gathering the funds required for the EU’s 2030 climate targets. WWF urges the European Parliament and Member States to strengthen the rules. Better safeguards will boost investor trust and support a greener EU economy.

For sustainable finance stakeholders and eco-conscious investors, the SFDR revision is a key moment. Clear rules, strong checks, and honest disclosures are critical. These steps will help align investments with the EU’s strong climate and biodiversity plans.

Source: WWF European Policy Office, November 2025
Related Topics: Sustainable Finance Disclosure Regulation, EU Climate Goals, Sustainable Investing, Fossil Fuel Divestment, ESG Criteria

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