The Sustainable Finance Disclosure Regulation
In order for Europe to reach its international environmental commitments and targets, the EU regulatory landscape is undergoing considerable changes. One such change is the entry into force of the Sustainable Finance Disclosure Regulation (SFDR), for which businesses need to start preparing for now.
What is the SFDR?
As a key component of the EU’s sustainable development agenda, the SFDR aims to enhance transparency on sustainability practices among financial institutions and market participants. The regulation introduces disclosure requirements at the organisational, service and product levels, ensuring standardisation in sustainability reporting. This helps prevent “greenwashing” and enables comparisons for investors to make sustainable investment decisions.
Who does the SFDR apply to?
The SFDR primarily applies to financial institutions (banks, insurers, asset managers and investment firms) operating within the EU. However, non-EU entities will also be affected – either indirectly through their EU subsidiaries or via the provision of services in the EU and market pressure.
The disclosure requirements are considered at both the entity level and the product level.
The time to prepare for the SFDR is now: PwC can help
With deadlines fast approaching, financial organisations need to prepare now. Our Financial Services specialists can assist you by performing SFDR impact assessments and regulatory gap analyses, helping you develop and implement the SFDR strategy best suited to your company’s needs.
