WHAT IS THE SUSTAINABLE FINANCE DISCLOSURE REGULATION

The EU’s  Sustainable Finance Disclosure Regulation (SFDR) came into effect on March 10, marking a milestone in the region’s effort to ensure that financial firms, such as fund manager, insurers, and banks that provide financial products and services within the region are comprehensively disclosing just how committed they are to sustainability. The directive aims to push around €1 trillion into green investments over a decade. This will address the lack of consistency in the climate. Related information that is currently being provided by financial market participants and will provide a competitive edge to firms that have a good offering of sustainable products. According to the official wording, the SFDR “lays down harmonized rules for financial market participants and financial advisers on transparency with regards 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”