The Sustainable Finance Disclosure Regulation (SFDR), a cornerstone of the European Commission’s Action Plan on Sustainable Finance, came into effect on 10 March 2021. The Regulation aims to trigger changes in behavioral patterns in the financial sector and promoting responsible and sustainable investments. This enhanced transparency will increase awareness of financial products’ sustainability credentials.

The SFDR will set rules in the EU about on:

  • how financial product manufacturers and financial advisers should inform end-investors about sustainability risks,
  • how the impact of investments on the environment and society should be disclosed, and
  • how financial products that are marketed as sustainability-related actually meet that ambition.

The Regulation will be accompanied by Regulatory Technical Standards (RTS), which is still being developed by the European Supervisory Authorities. The Standards will be published at a later stage.

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