SFDR
SFDRAlso called sustainable Finance Disclosure Regulation, disclosure Regulation
SFDR is the EU regulation that requires asset managers, insurers selling investment products, pension providers and advisers to disclose how they handle sustainability risks and adverse impacts. Products that promote environmental or social characteristics (Article 8) or target sustainable investment (Article 9) carry extra disclosures. It has applied since 10 March 2021.
How it works
Firms publish entity-level statements on sustainability risk policies and, above 500 employees or by choice, a yearly statement on principal adverse impacts. At product level, Article 8 and Article 9 funds use the templates set by Delegated Regulation 2022/1288 in pre-contractual documents, on websites and in periodic reports. Data on investee companies feeds indicators such as emissions and board diversity.
SFDR labels drive fund distribution in the EU, so classification errors carry greenwashing and mis-selling risk. On 20 November 2025 the Commission proposed a revision that would remove entity-level duties and replace Articles 8 and 9 with product categories. The current rules apply until an amendment takes effect.
The rules
Requires disclosure of sustainability risk policies, principal adverse impacts and product-level sustainability information.
Financial market participants and financial advisers in the EUSets the mandatory templates and adverse impact indicators for SFDR entity and product disclosures.
Financial market participants with Article 8 and 9 products or adverse impact statementsProposes product categories in place of Articles 8 and 9, drops entity-level disclosures and takes advisers out of scope. Still under negotiation.
Financial market participants and financial productsCommon questions
What is the difference between Article 8 and Article 9 funds?
Article 8 products promote environmental or social characteristics and follow good governance. Article 9 products have sustainable investment as their objective. Article 9 carries stricter disclosure and investment requirements.
Who has to comply with SFDR?
Financial market participants such as asset managers, insurers offering investment-based products, pension providers and investment firms providing portfolio management, plus financial advisers. Non-EU managers marketing funds into the EU also fall in scope.
Is SFDR being replaced?
The Commission proposed a revision in November 2025, often called SFDR 2.0. It would introduce product categories and remove entity-level disclosures. The proposal is still being negotiated, so the existing regulation continues to apply.
