EU carbon rules / Regulations / Sustainable Finance Disclosure Regulation (SFDR)
Sustainability risk disclosures by financial market participants and financial advisers (‘sustainable investment’ definition amended by Taxonomy Regulation 2020/852; also amended by Regulation 2024/3005)
This regulation applies to:
This Regulation applies from 10 March 2021; Article 11(1) to (3) apply from 1 January 2022, and certain provisions apply from 29 December 2019. Amended by Regulation (EU) 2024/3005 (transparency and integrity of ESG rating activities); in November 2025 the Commission also proposed amendments to simplify SFDR disclosure requirements (not yet adopted).
The following provisions define its scope:
Article 1 — Subject matter
This Regulation lays down harmonised rules for financial market participants and financial advisers on transparency with regard to the integration of sustainability risks and the consideration of adverse sustainability impacts in their processes and the provision of sustainability‐related information with respect to financial products.
Article 2(1) — ‘financial market participant’ (definition)
(1) ‘financial market participant’ means: (a) an insurance undertaking which makes available an insurance‐based investment product (IBIP); (b) an investment firm which provides portfolio management; (c) an institution for occupational retirement provision (IORP); (d) a manufacturer of a pension product; (e) an alternative investment fund manager (AIFM); (f) a pan‐European personal pension product (PEPP) provider; (g) a manager of a qualifying venture capital fund registered in accordance with Article 14 of Regulation (EU) No 345/2013; (h) a manager of a qualifying social entrepreneurship fund registered in accordance with Article 15 of Regulation (EU) No 346/2013; (i) a management company of an undertaking for collective investment in transferable securities (UCITS management company); or (j) a credit institution which provides portfolio management;
Article 2(11) — ‘financial adviser’ (definition)
(11) ‘financial adviser’ means: (a) an insurance intermediary which provides insurance advice with regard to IBIPs; (b) an insurance undertaking which provides insurance advice with regard to IBIPs; (c) a credit institution which provides investment advice; (d) an investment firm which provides investment advice; (e) an AIFM which provides investment advice in accordance with point (b)(i) of Article 6(4) of Directive 2011/61/EU; or (f) a UCITS management company which provides investment advice in accordance with point (b)(i) of Article 6(3) of Directive 2009/65/EC;
| Duty | Trigger | Evidence | Timing |
|---|---|---|---|
| Publish a sustainability risk policy Disclose on the website the policy on integrating sustainability risks in investment decisions. | As a financial market participant | Website policy disclosure | Ongoing |
| Pre-contractual and periodic disclosure of sustainability risk integration Explain in pre-contractual documents how risks are integrated and the assessed impact on returns. | Providing financial products or investment advice | Pre-contractual disclosures, periodic reports | Ongoing |
| Disclose the characteristics or objectives of Article 8 / 9 products Products promoting environmental or social characteristics or targeting sustainable investment must make additional disclosures on methods and indicators. | Product falls within the scope of Article 8 or Article 9 | Product disclosure documents, index and indicator descriptions | Ongoing |
Article 3(1) — Transparency of sustainability risk policies
Financial market participants shall publish on their websites information about their policies on the integration of sustainability risks in their investment decision-making process.
Article 6(1) — Transparency of the integration of sustainability risks
Financial market participants shall include descriptions of the following in pre-contractual disclosures: (a) the manner in which sustainability risks are integrated into their investment decisions; and (b) the results of the assessment of the likely impacts of sustainability risks on the returns of the financial products they make available.
Article 8(1) — Products promoting environmental or social characteristics
Where a financial product promotes, among other characteristics, environmental or social characteristics, or a combination of those characteristics, provided that the companies in which the investments are made follow good governance practices, the information to be disclosed pursuant to Article 6(1) and (3) shall include the following: (a) information on how those characteristics are met ...
Article 9(3) — Products with sustainable investment as their objective
Where a financial product has sustainable investment as its objective ... the information to be disclosed pursuant to Article 6(1) and (3) shall include the following: (a) information on how the designated index ... is aligned with that objective; (b) a description of the methodology used ...