BRUSSELS, 20 November 2025

EDFI strongly supports the creation of a harmonised, fit-for-purpose, and globally interoperable EU sustainable finance framework. Such a framework should serve the ambition of ‘Global Europe’, as formulated through the Global Gateway (GG) strategy, and in the draft proposals for the next Multiannual Financial Framework (MFF). This approach would enhance transparency, unlock capital, strengthen the EU’s global leadership and competitiveness while unleashing sustainable development and investment opportunities in developing countries, ultimately advancing the EU’s geostrategic and sustainability agenda.  

This position is grounded in a clear rationale that can be grouped into three core dimensions: (i) fundamental principles guiding our EDFI commitment, (ii) practical benefits to financial systems and investors, and (iii) the strategic advantages that reinforce Europe’s global leadership.

Sustainability as a fundamental strategic principle.

The priority remains on people and planet with financial returns as a condition for long-term sustainability – this is essential in addressing climate risks and building resilient economies and societies where people live and work. Sustainability is best embraced as a strategic imperative, beyond political battles. This is not a shift in direction for European DFIs: sustainability has always defined our mandate, guiding our alignment with the SDGs and Paris Agreement and our commitment to the highest environmental, social, and human-rights standards.

Practical benefits to the financial system, including to investors.

Fit-for purpose sustainable finance framework will contribute to closing the SDG financing gap through mobilizing public and private financeto achieve the goals of the Paris Agreement, as well as green and social finance goals. Such a system will thus aim for global interoperability of frameworks defining “sustainable investments” through e.g. taxonomies, thereby avoiding market fragmentation and spurring private financial sector mobilization.

It will, moreover, improve transparency and accountability through proportionate, standardised sustainability reporting, not as a compliance and mere reporting exercise, but as a tool to track commitments, assess delivery, and inform strategic decision-making of DFIs and the broader Global Gateway agenda. Reporting should   enable institutions to rethink, measure, and adjust business models and strategies and to redirect capital toward sustainable economic activities.

Finally, fit-for-purpose and predictable rules enhance operational efficiency and investor confidence by reducing fragmentation , harmonising disclosure requirements lowering compliance costs and providing the clarity needed to attract long-term sustainable investment.
Strategic advantages under Global Gateway and the next MFF

Beyond the Sustainable Finance regulatory agenda, DFIs are main delivery agents within the broader EU external investment framework – namely the Global Gateway (GG) and the European Financial Architecture for Development (EFAD). The GG sets the EU strategic direction for external investments in key DFI investment sectors. The Multiannual Financial Framework (MFF), the EU long-term budget, is the GG financial backbone, providing grants, guarantees, blended finance, and investment instruments like the European Fund for Sustainable Development+ (EFSD+). To maximise impact including through DFI’s mobilisation of private financial actors regulated under EU Sustainable Finance legislation, these three pillars – strategy (GG), budget (MFF), and regulation (EU SF legislation) – must be coherent and mutually reinforcing.

DFIs play a key role in supporting partner countries’ sustainable transitions and in particular of their private sector – mobilising finance, sharing expertise, and fostering innovation. By aligning operations with global standards and local priorities, they help inspire and guide pathways toward inclusive, climate-resilient, and coherent development. At the same time, DFIs contribute to enhancing EU competitiveness and its sustainable footprint by strengthening European supply chains and helping European suppliers meet the highest environmental and social standards, promoting a level playing field for European businesses and positioning the EU as a leading partner in sustainable investment globally. A fit for purpose sustainable finance framework will strengthen EU global leadership and competitiveness by aligning its regulatory, financial, and strategic financial instruments behind a common external investment agenda.

European DFI are well positioned to support this transformation. With strong national government backing, active presence in Emerging Markets and Developing Economies (EMDEs), and vast global networks, EDFI bridges public policy goals and private capital. Together with European and global partners, the EDFI stand ready to help develop a sustainable finance framework that delivers on many fronts: globally interoperable, ambitious, and practical. The EDFI play a three-fold role to catalyse finance at scale, support market development, and direct resources where they are most needed.

Policy Recommendations

1. Ensure strategic coherence across the EU’s external investment toolkit

Align the EU sustainable finance rules with the EU’s main external investment agenda (i.e. Global Gateway strategy) and budgetary framework (MFF) to ensure a unified and effective policy framework. Only through this coherence can the European Union deliver on its external action objectives, mobilise capital at scale, and drive sustainable, resilient development in emerging and developing economies. Please see Annex I for more information.

2. Adapt Sustainable Finance regulation to emerging markets and developing economies’ contexts

Ensure that EU Sustainable Finance legislation, such as SFDR, EU Taxonomy, CSRD and others, are adapted to reflect the mandates and operating models of DFIs, and the specific challenges of investing in EMDE and of the private sector operating in these countries. These include divergent transition pathways, limited data availability, and local legal frameworks that differ from EU legislation frequently referenced as a baseline in the EU Taxonomy. Current requirements often presume a developed market context, creating barriers to implementation and limiting the true impact of development finance. A more proportionate and context-sensitive approach – including clearer provisions for interoperability and transition finance – is essential to ensure that the regulatory framework helps, not hinders, sustainable investment and transformation in EMDE. Please see Annex II and Annex III for more information. 

3. Build in DFI dialogue within EU sustainable finance policy crafting process
Create a formal and regular mechanism for engaging EDFI and other key actors investing in emerging markets to ensure that EU sustainable finance rules reflect operational realities on the ground. We stand ready to work with like-minded practitioners and policymakers – across the European Commission and beyond – to promote greater join-up in three areas: sustainable finance regulation, the EU external investment agenda, and its broader climate and development goals. Such an approach ensures that sustainable finance policy supports, rather than constrains, impact-driven investment in developing economies.

4. Support SF implementation through MFF-backed capacity building

Leverage the EU Multiannual Financial Framework (MFF) to strengthen the capacity of European DFI and their investees – particularly in EMDE – to meet sustainability reporting and impact measurement requirements. Technical assistance (TA), advisory support, and grant-based resources should be mobilised to build local capabilities, improve data quality, and support alignment with evolving EU rules. This includes supporting the development of local sustainable finance taxonomies and disclosure systems, where relevant, to promote interoperability with EU standards. In parallel, MFF-backed TA should reinforce local financial ecosystems – including support for local banks, SMEs, and capital-market institutions – to build pipelines of bankable projects and enable sustainable finance to scale in EMDEs. Targeted MFF-backed support will be essential to make compliance feasible, scalable, and impactful in challenging markets.

>> See the entire Joint Statement document with Annex

>> Learn more: EDFI Policy Positions page

Notes to editor:

About EDFI 

EDFI – the Association of European Development Finance Institutions – supports and promotes the work of bilateral European Development Finance Institutions (DFIs). With a combined portfolio of €60 billion in 2024, EDFI comprises 15 member institutions. Established in 1992, their vision is a world where the private sector offers people in low- and middle-income countries opportunities for decent work and improved lives. They also foresee private investment flows which align with the Sustainable Development Goals and the Paris Climate Agreement. EDFI promotes the joint interests of its members, informs policy, and drives innovation in industry standards. 

 EDFI membership comprises: BIO (Belgium), BII (UK), Cofides (Spain), DEG (Germany), Finnfund (Finland), FMO (The Netherlands), Impact Fund Denmark (Denmark), Norfund (Norway), OeEB (Austria), Proparco (France), SIFEM (Switzerland), Simest and CDP Development Finance (Italy), SOFID (Portugal), Swedfund (Sweden).  

ends / all