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Consultation on Amending EU SFDR

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On April 12, 2033, the three European Supervisory Authorities (EBA, EIOPA, and ESMA – ESAs) published a Consultation Paper with amendments to the Delegated Regulation of the Sustainable Finance Disclosure Regulation (SFDR).


The purpose of the review is to broaden the disclosure framework and address some technical issues that have emerged since the SFDR was originally agreed, which concern sustainability indicators in relation to principal adverse impacts, and to propose amendments to RTS on pre-contractual and periodic documents or and on website product disclosures3 for financial products, in order to include greenhouse gas (GHG) emissions reduction targets, including intermediary targets and milestones and actions pursued.


The ESAs are proposing changes to the disclosure framework to address issues that have emerged since the introduction of SFDR. The authorities seek feedback on the amendments that envisage:

  • extending the list of universal social indicators for the disclosure of the principal adverse impacts of investment decisions on the environment and society, such as earnings from non-cooperative tax jurisdictions or interference in the formation of trade unions;

  • refining the content of other indicators for adverse impacts and their respective definitions, applicable methodologies, formulae for calculation as well as the presentation of the share of information derived directly from investee companies, sovereigns, supranational or real estate assets; and

  • adding product disclosures regarding decarbonization targets, including intermediate targets, the level of ambition, and how the target will be achieved.


Moreover, the ESAs propose further technical revisions to the SFDR Delegated Regulation by:

  • improving the disclosures on how sustainable investments “do not significantly harm” the environment and society;

  • simplifying pre-contractual and periodic disclosure templates for financial products; and

  • making other technical adjustments concerning, among others, the treatment of derivatives, the definition of equivalent information, and provisions for financial products with underlying investment options.


Overview of newly introduced mandatory social indicators:

* The EU list of non-cooperative jurisdictions for tax purposes is part of the EU’s work to fight tax evasion and avoidance. It is composed of countries which have failed to fulfil their commitments to comply with tax good governance criteria within a specific timeframe, and countries which have refused to do so. Link




This is one of the regular updates on the SFDR delegation, Asset managers shall review the proposed changes and assess how they will impact their current practices and reporting requirements. Financial institutions should ensure that they have systems and processes in place to collect and report data on ESG risks and PAIs. This amendment and other proposed changes will keep coming in the future as more practices proceeds, asset managers should communicate effectively with stakeholders, including investors, on their approach to complying with the SFDR and their adaptation to the new progress.

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