Insight into possible SFDR changes
19.07.2024 – Contributors
SFDR is on course for significant change and the recent opinion from the ESAs (the European regulators) gives us a first glimpse into what these changes may look like.
Below are three of the most significant suggestions proposed by the ESAs and their likely impacts.
Read the original article from Ropes & Gray here.
Article 8 and 9 funds replaced with two new product categories
The ESAs suggest that Article 8 and 9 funds should be replaced by two new product categories: the sustainable product category and the transition product category.
To qualify for the environmentally sustainable label in particular, products will need to meet a minimum sustainability threshold based on investments in taxonomy-aligned economic activities – this will increase the bar considerably for funds which currently make sustainable investments, which do not need to be Taxonomy aligned.