SFDR Reporting
For Businesses

The Sustainable Finance Disclosure Regulation (SFDR) sets concrete disclosure requirements for financial market participants and financial advisors and allows investors to compare the ESG performance of financial products and evaluate risks.

SFDR Reporting

What is SFDR Reporting?

An ESG reporting
framework

The SFDR outlines what financial entities have to disclose 
to their clients, including how they integrate sustainability factors into their decision-making regarding financial products and what adverse impacts those products have.

Regulating ESG
investments

SFDR includes precise requirements for financial products that market with ESG characteristics or label themselves as a sustainable investment.

Increasing transparency & 
preventing greenwashing

The aim of the SFDR is to increase the transparency of sustainable investment products and sustainable claims in the financial market.

SFDR & ESG

SFDR as Part of ESG

The Sustainable Finance Disclosure Regulation is part of the wider ESG regulation in the EU, increasing 
ESG transparency and helping investors navigate sustainable investment choices. The SFDR labels products under three categories, depending on their ESG impacts, which are defined in articles 6, 8 and 9:

SFDR Article 6

Analyse your scope 1 and 2 emissions, including energy consumption and mobile combustion, as well as administrative emissions in scope 3 such as purchased goods and services, water and waste from your office buildings and business travel.

SFDR Article 8

Products promoting environmental or social 
(or a combination of both) characteristics and 
the companies in which the investments are made have good governance practices in place (sound management structures, employee relations, staff remuneration, tax compliance).

SFDR Article 9

Products with a sustainable investment objective that is non-financial, such as:

  • Economic activities that contribute to an environmental objective.
  • (or) Economic activities that contribute to 
a social objective.
  • DNSH principle (OECD, UNGPBHR, ILO, IBHR) AND principal adverse impact indicators (14+).
  • Additionally, it needs to follow good governance practices.
SECR Reporting

Who Needs to Report on SFDR?

EU sustainable finance disclosure regulation applies to financial market participants and financial advisors in the EU (banks, insurers, asset managers and investment firms), including financial market participants with EU shareholders as well as those that promote themselves in the EU.

SFDR Reporting Requirements

What are the SFDR
Reporting Requirements?

The reporting requirements for SFDR follow precise formats and differentiate between companies and products. The SFDR obligates participants to publish the data on their websites in an allocated section as well as in pre-contractual information and covers three reporting categories:

For Financial
Solutions

How are sustainability factors integrated into investment decisions?
What are adverse impacts on sustainability of investments?

For Standard
Financial Products

How are the most important impacts on sustainability and sustainability risk considered?
What are the most relevant adverse impacts of the financial product on sustainability?
Pre-contractual information about the financial product and periodic reports on the development of the financial product

For ESG
Financial Products

What are the ESG characteristics of the financial product?
How are the ESG characteristics achieved?
How are the ESG characteristics and their achievements assessed and evaluated?
Pre-contractual information about the financial product and periodic reports on the development of the financial product
SFDR Reporting Requirements

Is SFDR Reporting Mandatory?

From 1 January 2022 financial investors must report PAIs (Principal Adverse Impacts) on mandatory sustainability 
factors as well as:

  • At least one additional indicator related to principal adverse impacts on a climate or other environment.
  • One additional indicator related to principal adverse impacts on a social, employee, human rights, anti-corruption or anti-bribery sustainability factor under SFDR.

From 1 January 2022 financial investors must report 5 PAIs related to GHG emissions of their investees:

  • Scope 1 GHG emissions
  • Scope 2 GHG emissions
  • Scope 3 GHG emissions (from 1 January 2023)
  • Carbon footprint
  • GHG intensity of investee companies
SFDR Timeline

When Does SFDR Come Into Effect?

The EU sustainable finance disclosure regulation came into effect in March 2021, however,  some requirements will start gradually, such as the reporting on Scope 3 GHG emissions from 1 January 2023.

From 30th March, 2021
Until 30th December, 2021
From 1st January, 2022
From 30th December, 2022
From 1st January, 2023

Disclosure on the websites and 
in pre-contractual information becomes mandatory.

Disclosure about standard financial products becomes mandatory.

Delegated Act with disclosure details (e.g. sustainability indicators to measure) becomes mandatory.

All suggestions for the Delegated Acts including the disclosure details published.

Disclosure about standard financial products becomes mandatory.

SFDR Disclosure

How to Disclose in line with SFDR

The European Supervisory Authorities provide methodologies and templates for the disclosure in their Final Report on draft Regulatory Technical Standards. In total, the SFDR includes 64 indicators, 18 are mandatory. In addition, participants have to report on at least 2 optional indicators. For the reports and calculations, financial entities need to thoroughly collect internal data and measure their ESG impact.