EU delays SFDR product disclosure rules to 2023


December 3, 2021

EU rules requiring greater disclosure of investment products’ green credentials are to be delayed until 2023, it has emerged.

The European Commission has postponed the implementation of disclosure requirements under the Sustainable Finance Disclosure Regulation (SFDR) until January 2023 – the second time it has pushed back the deadline.

The rules will require asset managers and other investment product providers to clearly label their sustainable offerings.

The delayed rules include the implementation of the SFDR’s regulatory technical standards (RTS), and those relating to the classification of funds as Article 8 or Article 9 labelled products.

Article 8 refers to funds that promote “environmental or social characteristics”, while Article 9 funds explicitly target sustainable investments and are measured against a relevant benchmark.

John Berrigan, the European Commission’s deputy director-general for financial stability, financial services and the Capital Markets Union, wrote to the EU Council and Economic and Monetary Affairs Committee to inform them of the delay.

He said the extra time was needed to “facilitate the smooth implementation of the delegated act by product manufacturers, financial advisers and supervisors”.

The SFDR is part of the EU’s action plan on financing sustainable growth. The rulebook establishes a framework for financial market participants – including investors and their advisers – on transparency regarding the integration of sustainability risks. It also covers the consideration of adverse sustainability impacts in their processes, and the provision of sustainability-related information.

The regulations also require providers and asset owners to disclose how sustainability risks are integrated into investment decisions and assessments of the impact of sustainability risks on the returns of financial products.

The initial SFDR rules came into effect in March 2021, with the application of the RTS drafted by Europe’s primary financial regulatory agencies. The rules were initially set to come into force in January 2022.

Last Updated: 3 December 2021