But if the European Union ends up tossing out major planks of the existing framework, that "would be a nightmare," he said in an interview.
The European Commission launched a consultation into the Sustainable Finance Disclosure Regulation last month, after longstanding complaints from investors and national regulators that its ESG rulebook was full of holes. Some academic studies even suggest that SFDR has helped feed the very greenwashing it was designed to prevent.
Mairead McGuinness, the EU commissioner for financial markets and services, has said the key question she wants answered is whether SFDR is giving investors the information they need to help steer capital toward more sustainable activities.
For asset managers, a key issue they want resolved centers on the EU's insistence that SFDR be used not as a fund labeling framework, but instead as a disclosure regime. In practice, however, market participants have ignored that requirement.
The EU has given market participants until Dec. 15 to respond to its consultation on SFDR.
During an SFDR workshop hosted by the European Commission on Oct. 10, McGuinness said it's crucial to get a "full picture" of how the regulation is working in practice, in order to assess the scope of the overhaul that may be needed.
The EU Commission said it had registered "exceptionally high interest" in the event, and McGuinness promised to arrange more workshops to address the demand from market participants.
EU officials attending the workshop tentatively supported making SFDR's reporting requirements apply to all fund categories. That would create a level playing field between ESG and non-ESG portfolio managers and help investors compare products for sustainability impacts, both negative and positive, they said.