Former DWS group sustainability officer Desiree Fixler has slammed the Sustainable Finance Disclosure Regulation (SFDR) labelling it a “waste of taxpayer money”.
Speaking at ETF Stream’s ETF Buyer London event, the DWS greenwashing whistleblower said the regulation may have been “well intentioned” but has “overly burdened asset managers and only benefits politicians, taskforces and consultants”.
“SFDR was very well intentioned but has been an absolute waste of taxpayers money,” Fixler said.
“Whether it is SFDR or CSRD, do we really need a classification system? Why cannot companies just say what they mean when they are investing sustainability?”
She added the European regulator has been overly prescriptive in overseeing ESG investing versus its US and UK counterparts via its Article 8 and Article 9 classification regime.
“Brussels and the financial regulator came out and felt like they could overregulate and burden companies with so much reporting that they have no choice but to invest in green activities,” Fixler said.
“It is a very prescriptive model where Brussels wants to shame asset managers do not offer Article 8 or Article 9 funds, or if a company is not moving into renewables.”
Fixler’s comments come as the European Commission launched a full-scale review of SFDR in September to address its shortcomings and allegations that it has led to increased greenwashing.
The consultation, which is due to run until mid-December, is likely to turn the disclosure regime into a labelling regime in a bid to make it easier for investors to understand and more closely align it with the Financial Conduct Authority’s (FCA) Sustainable Disclosure Regime (SDR).
However, Fixler – who shot to prominence after calling out the greenwashing practices of her former employer DWS – praised the FCA’s “practical” approach to product classification.
“The FCA, like the Securities and Exchange Commission (SEC), has the overriding element of whatever you are doing, do not mislead, do not miss out and do not miss represent,” she said.
Fixler added SDR sits in the middle of the SEC and EU’s attempts to oversee sustainable investing.
“The SEC is not telling investors how to invest. Just make sure you are telling the truth and do what you say you are doing, and if not, we are watching, we will crack down and arrest people,” she said.
In August, Fixler said it was time to “retire the term ESG” after a Bloomberg survey revealed firms are under pressure to stop using the acronym in conversations with clients following a highly charged political debate in the US.
A recent Greenpeace report called out Fixler’s employer DWS for a “new form of greenwashing” claiming its revised sustainability bonus scheme only served to capture “irrelevant corporate metrics” as opposed to concrete climate objectives.
The bonus scheme was restructured to remove conflicts of interest which caused former CEO Asoka Woehrmann to step down in 2022.