Sustainable Finance Disclosure Regulation
The Sustainable Finance Disclosure Regulation (SFDR) was introduced in March 2021 and established sustainability-related disclosure obligations for the financial services sector.
SFDR was introduced under the European Union (EU) Action Plan for Sustainable Finance and it is a regulation developed with two core aims in mind:
- To prevent greenwashing through greater transparency of environmental and social reporting amongst financial market products
- To support the EU’s sustainable finance goals of reorienting capital flows towards sustainable investment.
Who has to comply?
SFDR applies to all financial market participants and financial advisers based in the EU, as well as investment managers or advisers based outside of the EU, who market (or intend to market) their products to clients in the EU.
There are three main fund level disclosure designations relating to SFDR. Obligated funds must be positioned as either Article 6, Article 8 or Article 9 and ensure they are ready to meet the disclosure requirements associated with the position.
Article 6 – transparency of the integration of sustainability risks (all Funds)
Article 8 – promotion of environmental and/or social characteristics
Article 9 – sustainable investment objective
What you need to do
Obligated financial market participants and advisers must be ready for the disclosure requirements from 1 January 2023.
At the fund level, those obligated should ensure regulatory fund documentation is prepared and where relevant is filed with the appropriate stakeholders.
In addition to Regulatory documentation, a delivery strategy is essential to ensure the ongoing disclosure requirements and fund positioning requirements are met over time.
How EVORA can help
EVORA can support our clients to evaluate and interpret SFDR technical and regulatory guidance and develop practical alignment strategies and compliance plans.
We offer SFDR screening of funds required to comply with the legislation and we support our clients with formalising their strategy in order to align with Articles 8 or 9 of the regulation.
We specialise in developing required SFDR formal documentation and assisting our clients with filling out mandatory SFDR templates. We also develop monitoring and reporting systems for funds allowing them to disclose in line with regulatory requirements.
We offer SFDR support to equity and debt real estate funds, as well as mixed strategy funds and our expertise also covers EU Taxonomy alignment for funds and entities required to disclose in line with the regulation.
EVORA helps Arsenale SGR go beyond US regulatory requirements
EVORA provide Edmond De Rothschild with the tools to understand SFDR
We are proud to have supported some of the largest organisations make principles-based disclosures on ESG-related activity
“EVORA kept us informed on developments on SFDR and best practice on ESG strategy for debt funds. They successfully helped one of our debt funds align to SFDR Article 8”
Richard Craddock, Managing Director | Debt Investments, LaSalle Investment Management
“To make a European regulation relevant to a primarily American business, it was absolutely necessary to avoid a “cookie-cutter” approach. EVORA had a completely design-driven style, and carefully designed each document so that it formed strong, reliable relationships with the procedural architecture of the Management Company as a whole”
Edoardo Torrenti, Investment Team Member
Introducing some of our SFDR Team
Executive Director and co-Founder
Paul Sutcliffe, Executive Director and co-Founder at EVORA Global, leads our SFDR team.
Paul is a Chartered Environmentalist, a Chartered Energy Manager and a full member of the Institute of Environmental Management and Assessment. He has over 20 years of experience in delivering strategic sustainability solutions to the real asset industry.
Paul is a member of EVORA’s board and also leads its Sustainable Finance service line. Over the last 2 years, Paul has focused on helping clients navigate the EU’s Sustainable Finance Disclosure and Taxonomy Regulations.
Paul has also provided strategic net zero carbon expertise to clients with global portfolios, with a focus on real asset investment decision-making.
Karolina Krzystek-De Ranter
Speak to the SFDR Team
Our experts are on hand to discuss your sustainability challenges and objectives
+44 (0)20 3326 7333