Letter to the EU Commission: no companies developing new fossil fuel projects in any sustainable funds

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Shareholders for Change (SfC) has joined a coalition of civil society organisations, financial institutions, and experts in urging the European Commission to strengthen the Sustainable Finance Disclosure Regulation (SFDR).

In an open letter published on September 30, coordinated by Reclaim Finance, over 120 signatories—including EU and non-EU NGOs, financial institutions, corporate actors, academics, and climate experts—called on the Commission to exclude companies developing new fossil fuel projects from all future SFDR fund categories.
The signatories stress that this measure is essential to prevent greenwashing and to align the EU’s sustainable finance framework with its climate commitments. They call for the exclusion of fossil fuel developers to become a minimum safeguard across all SFDR product categories.

“A unique set of baseline exclusions is particularly necessary for the fossil fuel sector”, the letter states, noting that scientific consensus clearly affirms the need to halt the development of new fossil fuel projects to meet the Paris Agreement goals. “Developing new fossil fuel projects—a long-term investment incompatible with global climate goals—is a clear indication that a company is not planning to transition”.

The letter also emphasizes that such exclusions would align with citizens’ and retail investors’ expectations, offering a simple, transparent criterion that would restore trust in sustainable finance. Feedback gathered during the European Commission’s 2023 Targeted Consultations on the SFDR Assessment indicated strong public demand for clearer sustainability standards.
Finally, the coalition warns that merely aligning the SFDR’s minimum criteria with the recent ESMA Guidelines on fund names or with the EU Climate Benchmark Regulation would be insufficient to ensure credibility and prevent misleading claims about sustainability.

By signing the letter, Shareholders for Change reaffirms its commitment to credible, science-based responsible investment standards and to advancing policies that align financial markets with global climate objectives.

 

Photo: Marco, Pexels