Sustainable Finance Disclosure Regulation (SFDR)
Measure the ESG performance of investments and ensure compliance with mandatory SFDR disclosure requirements.
Implement our full-cycle SFDR Solution
Streamline your reporting in line with the Sustainable Finance Disclosure Regulation (SFDR) and effectively monitor the related sustainability performance of your investments. Position Green’s end-to-end SFDR Solution makes it easy for you to take control of the SFDR – collect and calculate the relevant ESG data from your portfolio companies to ensure SFDR compliance and equip your entire team to integrate SFDR into your investment strategy.
Utilise ESG software with pre-built frameworks
Get expert support from experienced advisors
Train your team to maximise ESG insights
Position Green works with companies worldwide to help navigate an evolving regulatory landscape, accelerate sustainability performance and sharpen your competitive edge. Find out how Position Green can help fuel your sustainability transformation.
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What is the SFDR?
The Sustainable Finance Disclosure Regulation (SFDR) requires financial market participants and financial advisors within the EU to disclose how they integrate sustainability risks into their investment decisions, as well as the impacts of their investments on sustainability factors.
The SFDR was introduced by the European Commission as part of a legislative package aimed at supporting the European Green Deal, fostering a sustainable economy and encouraging the financial sector to shift focus to sustainable activities, thus reducing the negative impact of fossil fuels and carbon emissions. The SFDR entered into effect in March 2021 and national regulators across the EU are now responsible for enforcing the regulation.
The SFDR aims to increase the transparency and standardisation of sustainable finance products and services, thus removing the obstacles that prevent investors from accessing sustainability data required for informed decision making. It also seeks to prevent greenwashing and level the playing field within the EU so that European companies are not exposed to unfair competition from enterprises outside the EU.
What is the scope of the SFDR requirements?
The SFDR impacts a wide range of financial market participants (FMPs) such as asset managers, investment funds, pension funds, insurance companies, banks and credit institutions.
The regulation imposes mandatory ESG disclosure obligations that compel these FMTs to report on the principal adverse impacts (PAIs) of their portfolios. The PAI indicators are a set of mandatory indicators and metrics which aim to show investors the potentially negative impacts certain investments may have on sustainability factors. Under these new requirements, fund managers, financial advisors and other financial institutions will need to collect ESG data and disclose any sustainability risks relating to their investments and financial products – on websites, in prospectuses and in periodic reports.