The new AMF's proposal for Minimum Environmental Criteria for SFDR is out

This very important document represents the first attempt at the European level by a national regulator to impose minimum standards under the SFDR Regulation. The various proposals are the result of an informal consultation with French financial actors and associations. Incidentally, they do not differ much from our recommendations to our clients.

Below is a brief summary of the 8 proposals:

1. Impose standardised minimum criteria for Art. 8 and 9 funds, with a higher level of requirement for Art. 9 funds;

2. Review the definition of sustainable investment from art. 2(17) of Regulation 2019/2088, considered "approximate" by the AMF ;

3. Define a minimum proportion of investments aligned with the Green Taxonomy for art. 9 funds:

• Which must be greater than 1%
• Which must increase from year to year
• A grandfather clause will be provided for closed-end funds;

4. Art. 8 and 9 funds will have to demonstrate that they have implemented a binding ESG approach:

• In terms of reducing the universe for listed funds
• Other approaches to be developed for non-listed funds and for real estate funds

5. Art. 9 funds will have to exclude fossil fuels from the portfolio. The same rule could apply to Art. 8 funds but with more flexible rules;

In addition to these 5 main proposals, the AMF has added three more "creative" proposals:

6. Define a commitment policy for all art. 8 and 9 funds;

7. Make PAI reporting mandatory for all funds art. 8 and 9;

8. Impose a minimum portion for art. 8 and 9 funds in "transition assets'', a term that does not have a precise definition but could be described within :

• CSRD
• The Green Taxonomy.