Brussels is back in session after the summer break, with the Sustainable Finance Disclosure Regulation (SFDR) being one of the first files up for debate.
The Council of the European Union agreed its negotiating position before the summer break, and Ireland, which is running the Council until the end of 2026, is pushing for the co-legislators to enter negotiations as soon as possible.
So, what is in store for SFDR 2.0, and what are the key battlegrounds? When trilogues do start, only a handful of issues are expected to prove contentious.
Among them is the Transition category (Article 7), which will be the most controversial aspect of the SFDR discussions.
Updated rules around principal adverse impacts (PAIs), alongside new requirements for “sustainability-related indicators”, will also be up for debate.
Beyond SFDR, the investment industry called for clarity on EU due diligence rules, with Norges Bank Investment Management (NBIM) urging the EU to align its sustainability and due diligence laws with international standards, while the Principles for Responsible Investment (PRI) called for greater legal certainty over how the rules apply to investors.
The comments followed the closure, on 14 August, of the European Commission’s consultation on practical guidance for implementing the Corporate Sustainability Due Diligence Directive (CS3D), following a major rewrite of the law.
The debate over sustainability priorities also extends beyond EU regulation.
In other news, NBIM has criticised elements of the Principles for Responsible Investment’s (PRI) proposed new three-year strategy, warning against expanding into areas of sustainability policymaking while urging it to focus on stewardship and bringing investors together.
Responding to the PRI’s 2026 strategy consultation, NBIM said the organisation offered the greatest value through its “genuinely unique” ability to convene responsible investors across markets and asset classes.
Items to note:
- The IPE Real Assets Infrastructure & Natural Capital Global Conference & Awards 2026 is taking place in Munich, Germany, on 17-18 September.
Krystle Higgins
Sustainable Finance Correspondent
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