Sustainable Finance Disclosure Regulation

The Sustainable Finance Disclosure Regulation (SFDR) is an EU regulation aimed at improving transparency in the financial services sector regarding sustainability risks and impacts. It applies to financial market participants and financial advisers, promoting sustainable investment across the EU.

Key Objectives: 1/ Transparency on Sustainability Risks -> Requires financial entities to disclose how they integrate sustainability risks into their investment decision-making or advice processes 2/ Product Categorization -> Article 6: Products that do not actively promote sustainability -> Article 8: Products promoting environmental or social characteristics -> Article 9: Products with sustainable investment as their objective 3/ Standardized Reporting -> Entities must report sustainability-related disclosures on their websites, in pre-contractual documents, and in periodic reports, using templates and data points specified by regulatory technical standards (RTS) 4/ Greenwashing Prevention -> Ensures financial products are marketed transparently to prevent misleading claims about their sustainability

Alignment with EU Taxonomy: SFDR aligns with the EU Taxonomy Regulation by requiring additional disclosures about whether and to what extent investments contribute to EU-defined environmental objectives.

🔗 EC, ESMA, ESA