On Tuesday 10 March 2026, PwC Luxembourg hosted an EMEA Environmental, Social and Governance (ESG) webinar focusing on recent developments shaping sustainable finance across Europe, the Middle East and Africa (EMEA).
The session explored how the EU sustainability framework applies to the defence sector, discussed the key outcomes of the European Commission’s market consultation on the proposed SFDR 2.0 legislation and examined the latest guidance from the European Securities and Markets Authority (ESMA) on sustainability-related claims.
During the first part of the webinar, Geoffroy Marcassoli, AWM EMEA ESG Leader at PwC, together with Kenny Panjanaden, Partner at PwC Luxembourg, and Mathilde Albin, Manager in Sustainable Finance Services at PwC Luxembourg, presented the findings of the PwC European SFDR Survey 2025.
The survey examines how asset managers across Europe are responding to evolving sustainability regulations under the Sustainable Finance Disclosure Regulation (SFDR).
Kenny Panjanaden explained that the survey builds on work conducted over the past two years and aims to provide both a snapshot of current market practices and insights into emerging regulatory trends: “We started this exercise two years ago to understand where the market was and to provide a snapshot of asset managers’ preferences.” He added: “This year we wanted to go a step further and analyse the market from a forward-looking perspective, particularly in light of SFDR 2.0.”
The survey gathered responses from 53 management companies representing more than €3.6 trillion in assets under management across Europe. Participants included firms of different sizes and regulatory structures, such as UCITS management companies (Undertakings for Collective Investment in Transferable Securities), alternative investment fund managers (AIFMs) and so-called “Super ManCos”, which combine UCITS and AIFM management licences.
One of the key findings concerns the future structure of the SFDR framework. According to the survey, more than two-thirds of respondents favour a product categorisation regime rather than the current disclosure-based approach, suggesting broad support within the industry for clearer classifications of sustainable investment products.
Geoffroy Marcassoli noted that the interaction between SFDR reforms and ESMA guidance is becoming increasingly important for the market: “When we conducted the survey, SFDR and the ESMA guidelines were often discussed as separate topics.” He added: “However, with SFDR 2.0 under discussion, the market increasingly expects these frameworks to converge.”
Another notable trend identified in the survey concerns ESG data usage. Nearly half of respondents reported using four or more ESG data providers, reflecting the growing complexity of sustainability reporting and analysis.
Kenny Panjanaden emphasised that asset managers are increasingly combining different information sources: “It is not only about purchasing data from external vendors.” He added: “Many asset managers also engage directly with invest companies to obtain additional sustainability information.”
The survey further found that 83% of ESG products promote both environmental and social characteristics, indicating a convergence between different asset classes and investment strategies as market participants adapt to regulatory requirements.
Mathilde Albin also outlined the expected timeline for the revision of the Sustainable Finance Disclosure Regulation: “The European Commission published its proposal for the revision of SFDR in November and subsequently launched a market consultation.” She added: “Following the consultation, discussions in the European Parliament are expected to last around six months, with a final vote potentially taking place later in 2026.”
According to Mathilde Albin, based on current discussions within industry working groups, the revised framework could be published in the EU’s Official Journal in early 2027, with application expected between mid-2027 and 2028, allowing time for market participants to adapt to the new requirements.
Deirdre Timmons, Sustainable Finance Lead and Director at PwC Ireland, then discussed guidance on sustainability-related claims and how ESG strategies are communicated to investors. She highlighted four core principles that should guide such claims: accuracy, accessibility, substantiation and ensuring information remains up to date.
According to Deirdre Timmons, sustainability claims should fairly reflect a company’s actual sustainability profile and be supported by clear methodologies and data: “Claims should accurately represent the entity’s sustainability profile, with no exaggeration, cherry-picking or omissions.”
The analysis focused particularly on ESG integration and exclusion strategies, which are widely used but often communicated inconsistently. While ESG integration aims to incorporate environmental, social and governance factors into investment analysis, exclusion strategies are typically used to avoid or minimise exposure to certain sectors or activities. The review found that ESG factors may be applied as binding elements of portfolio construction in some cases, but remain optional considerations in others, sometimes resulting in minimal differences between ESG-labelled funds and traditional portfolios.
In the final part of the webinar, Guillaume Levannier, Director for Sustainable Finance at PwC France, addressed the evolving debate on defence investments within the European sustainable finance framework.
He noted that the renewed attention to the sector is largely driven by geopolitical developments and structural changes in Europe’s security environment. The 2022 invasion of Ukraine exposed significant gaps in Europe’s defence capabilities and triggered a sharp increase in military spending. Between 2022 and 2024, average defence budgets across EU Member States rose by about 26%, reflecting what he described as a long-term structural adjustment rather than a temporary reaction.
Guillaume Levannier also explained that defence companies rely heavily on private capital markets, as many of the sector’s largest firms are publicly listed and finance research, production capacity and technological development through equity and debt markets. At the same time, ESG frameworks have historically treated the defence industry as incompatible with sustainable investment due to concerns related to controversial weapons, human rights risks and environmental impact.
However, a recent European Commission notice clarified that the EU sustainable finance framework does not prohibit financing the sector. “The EU sustainable finance framework does not prohibit investment in defence. These regulations are horizontal frameworks that apply to all sectors, and defence is not defined as non-sustainable by default,” he said.
The speakers concluded that the debate on defence investment reflects a wider question facing Europe: how to finance critical sectors that underpin security, resilience and sovereignty.
