This paper sets out recommendations put forward jointly by a group of NGOs and consumer organisations, committed to advance the sustainable finance regulatory agenda, to the European Commission on the minimum criteria for products with ESG characteristics (so called Article 8 products), as well as for sustainable investments regulated under Article 9 of SFDR (referred to as Article 9 products).

The main recommendations are:

• Develop and adopt minimum criteria for both Article 8 and Article 9 products to match the ambition of EU sustainability-related goals and ensure a well-calibrated regulatory framework;
• Criteria should comprise minimum sustainability performance, engagement / stewardship, exclusions, financial instruments’ type (equity, bonds, derivatives, passive investment, synthetic products, etc.) and their capacity to effectively allocate capital to the real economy;
• Minimum requirements should be accompanied by appropriate disclosures, including on a sustainability impact in the case of Article 9 products, where that is not yet the case, to enable verification;
• Review SFDR level 1 to set the minimum criteria for Art. 8 and 9 products and broaden its scope to include all financial instruments;
• Ensure appropriate alignment of MiFID II and IDD level 2 measures setting requirements for financial advice;
• Strengthen the role of the EU and national supervisory authorities with regards to verification of the compliance with the rules to effectively prevent greenwashing.