Here comes level 2 SFDR

The SFDR has been around for a long time. The debates and discussions of what this would mean for the European fund industry, and in particular the directors who are responsible for implementing it, took place years ago. One could be forgiven for forgetting that the stressful and difficult part of the SFDR hasn’t yet come into operation. That is its much postponed level 2 which comes into effect this January. (Level 1 has been in operation since March 2021.)

First, some background: the EU’s Sustainable Finance Disclosure Regulation (SFDR) requires financial services providers and owners of financial products to analyse  and disclose environmental, social and governance factors in public. It was introduced to bring transparency to investment products with sustainability-related claims, improve the ability to compare products, and to help investors better understand the impact of their investment decisions. The EU hopes it will channel capital towards more sustainable companies and activities.

To read more on this story, see the December issue of The NED.