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The EU’s sustainable finance rules should help investors understand where their money is going and support Europe’s transition. The Commission’s proposal improves the current system, but some changes are still needed.

The new Transition category should focus on whether companies are cutting emissions, not on the sector they operate in. The 70% threshold should stay. The rules should also work with MiFID II and the EU Taxonomy.

Companies need 24 months to prepare. Firms that fall outside the new scope should stop reporting as soon as the rules enter into force.

Read the paper to learn how SFDR 2.0 can direct more capital towards Europe’s transition.

Europe’s carbon market must cut emissions without cutting industrial production. In some industries, emissions have fallen alongside output and plant closures. The EU ETS revision should ensure that progress towards 2050 comes from investment and technology, not deindustrialisation. 

The Linear Reduction Factor should be adjusted after 2030 so allowances remain available through 2050. ETS revenues should support decarbonisation projects, while free allocation should continue where alternatives are not available at scale. 

For aviation and maritime transport, EU rules should align with international frameworks. Data centres should be removed from the scope where emissions come mainly from backup generators. These changes would link emissions reductions to investment while limiting the relocation of production outside Europe.