Sustainable Finance Disclosure Regulation (SFDR): What to Expect

As recently confirmed, the EU Sustainable Finance Disclosure Regulation (SFDR), became effective on March 10, 2021. The SFDR imposes sustainability-related disclosure requirements on financial services institutions such as banks, insurance companies, pension funds, and investment firms. The SFDR determines which financial institutions are covered by its scope under the definitions of "financial market participant" (defined in Article 2(1)) and "financial adviser" (defined in Article 2(11)). However, its implications go beyond the financial sector. This summary discusses how the SFDR will impact the real economy.