Sustainability Flash Note: SFDR 2.0: Look Before You Leap. Key Debate Points and Investor Concerns ahead of Trilogue Negotiations - Takeaways from our Roadshow & Latest Developments

Research evidence excerpt

Sustainability Flash Note: SFDR 2.0: Look Before You Leap. Key Debate Points and Investor Concerns ahead of Trilogue Negotiations - Takeaways from our Roadshow & Latest Developments

Jean-Xavier Hecker AC Europe Equity Research

(33-1) 4015 4472 19 June 2026 J P M O R G A N

jean-xavier.hecker@jpmorgan.com

category and it becomes a niche market. Conversely, the European Commission's head of

asset management Hélène Bussières pushed back against wholesale Article 8 relabelling

under ESG Basics, noting that some Article 8 funds had simply replicated famous global

indexes; she stressed that ESG Basics would be narrower than Article 8, capturing only those

products that make legitimate and justified ESG claims.

Sovereign Debt Treatment: Summarizing Investors’ Views

Sovereign debt treatment is seen as a potential hurdle to widespread adoption of Art 7

and Art 9 : Sovereign bond treatment has been widely flagged by investors as an important

hurdle to the potential widespread adoption of Art 9 and Art 7 funds. As a reminder, under

the initial EC proposal, investors would not be allowed to count any general-purpose public

sector bonds toward the 70% threshold to qualify for the Sustainable (Art 9) or Transition (Art

7) categories, a constraint that is particularly problematic for large asset owners such as

insurers and pension funds, which hold high allocations to sovereigns for risk and solvency

purposes. This point was indeed mentioned in several meetings. As a reminder, the

rapporteur’s draft addressed investments for general purpose public sector debt issuances

held outside the 70% threshold, adding a qualitative consistency requirement for them to be

consistent with the stated sustainability-related objectives or strategy of the financial product