EU: sustainability aspects of ESMA final report on the retail investor journey - understanding retail participation in capital markets

ESMA published a Call for Evidence (CfE) in May 2025 with the purpose of gathering input from stakeholders on key aspects of the investor journey, particularly the MiFID II regulatory requirements that impact retail investors when engaging with capital markets.  ESMA has now published its final report, summarising the feedback received and its planned follow-up actions to improve the retail investor journey.

On sustainability, ESMA has confirmed that it will support the Commission in simplifying and improving the MiFID II requirements on sustainability, largely reflecting feedback indicating that integration of sustainability preferences into the suitability assessment has introduced significant complexity for both clients and advisers, with clients struggling to express their sustainability preferences meaningfully.  Expected work includes: 

i. Significant simplification of the definition of “sustainability preferences”, aiming to link them (where possible) to any new product categories developed under the SFDR review. 
ii. Reducing operational complexity in the entire cycle of collection, adaptation and update of client sustainability preferences; and
iii. Supporting financial education efforts on relevant sustainability topics. 
 
ESMA's report can be found here