SFDR: New Product Categories on the Horizon

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Written

17.12. 2024

Author

Directorate-General for Financial Stability, Financial Services and Capital Markets Union

Source

EU Commission

Social

The Platform on Sustainable Finance, an advisory group to the European Commission, released on December 17, 2024 a briefing note suggesting a revised classification system for sustainable finance products based on feedback from a public consultation. The proposed system includes three primary categories: "Sustainable" for investments aligned with the European Union Taxonomy and free from significant harmful activities, "Transition" for portfolios aiding the move toward a sustainable economy and "ESG collection" for investments adhering to environmental and social standards, with other products labeled as "unclassified."

This framework aims to enhance existing SFDR components, taking into account investor preferences. An annex in the note provides detailed guidance on thresholds and market impact data. The proposal will be discussed in a webinar scheduled for January 21, 2025.