The EU’s SFDR Rulebook Is Getting an Overhaul: What You Need to Know
Overview
The European Commission is reviewing the Sustainable Finance Disclosure Regulation (SFDR) to make it simpler, more effective, and less burdensome. A public consultation is now open to gather views on how to reshape the rules.
Photo by Carl Gruner on Unsplash
Why the SFDR is Under Review
The SFDR aims to improve transparency in how financial products consider sustainability. Since its rollout in 2021, firms and regulators have raised concerns:
Unclear definitions
Complex classification requirements (e.g., Article 8 and Article 9 funds)
Inconsistent data and reporting obligations
What the European Commission is Doing
Launched a Call for Evidence and Consultation on the SFDR revision. The review focuses on:
Simplifying the rules
Reducing legal uncertainty
Making the framework more aligned with investor needs
3 Key Questions
Should there be a product categorization system based on sustainability goals?
How should the current Articles 6, 8, and 9 be revised or replaced?
Should disclosures be mandatory for all financial products?
Timeline and Participation
The consultation runs until December 15, 2023. Stakeholders can submit feedback through the “Have Your Say” platform.
Participants include:
Financial institutions
NGOs
Academics
Individual investors
What’s at Stake
The revision could reshape how funds market themselves as sustainable.
It may lead to clearer, more objective labels for green products.
Better data requirements could improve comparability and reduce greenwashing risk.
Why This Matters for Companies and Investors
If you’re an asset manager: Review your SFDR classifications and be ready to adjust.
If you’re an investor: Expect changes in how sustainable funds are described.
If you’re a regulator or NGO: Now is the time to shape the future framework.