CSRD - the future framework for sustainability reporting within the EU
What is SFDR?
The Sustainable Finance Disclosure Regulation (SFDR) is an EU regulation aimed at institutional investors, financial advisors and other actors in the financial services sector and addresses their sustainability reporting. The regulation is part of the EU's Green Deal, with the overall objective of creating a climate-neutral Europe by 2050.
The purpose of the SFDR is to counteract "greenwashing" for financial products, to increase transparency and harmonize sustainability reporting for the financial sector, and to facilitate investment decisions for the end investor.
SFDR does not affect everyone - but is still important
Even if some companies are not directly affected by the SFDR, they can benefit from familiarizing themselves with the rules when it comes to their own sustainability reporting. By understanding the type of information that institutional investors are looking for, companies can adapt their reporting not only to the requirements of the regulations, but also to market demand. Well-structured and thoughtful sustainability reporting builds confidence among funds and other investors, which in turn can facilitate long-term investment and create opportunities, such as private placements.