The European Commission’s proposed SFDR 2.0 framework represents the most significant update to the EU’s sustainable finance rules since the regulation came into force. The review aims to bring clearer product categories, stricter exclusions, and more consistent disclosures, addressing long-standing concerns around complexity, uneven interpretation, and greenwashing risks.
With new labels for Transition, ESG Basics, and Sustainable products, formal recognition ofimpact strategies, and streamlined PAI reporting, the revised regime is set to reshape howinvestment firms design, position, and evidence sustainability claims. As the proposalprogresses through the EU legislative process, firms should start assessing likely impacts ontheir product line-up, data requirements, and governance structures.
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