The Sustainable Finance Disclosure Regulation (SFDR) adopted in 2019 triggered a vast movement of self-labelling by asset managers. Intended as a classification that would put some order in the European Union sustainable funds market, SFDR\u2019s articles 8 and 9 quickly became a source of confusion. Both the complexity of the SFDR framework and its lack of clear minimum safeguards meant there was little added value for retail investors. On the contrary, article 8 and 9 classifications could even lead them to presume funds meet basic green credentials when this is not the case, leading to several scandals over the past years.<\/p>\n<\/div>
It is in this context that the European Commission publishes its proposal to review the SFDR. The review provides a unique opportunity to address existing gaps and loopholes through a robust SFDR 2. Such a text is essential to combat greenwashing in the financial market, but also to make European finance more attractive. Indeed, driven away by anti-climate initiatives in the U.S, asset owners are increasingly seeking asset managers and funds aligned with their priorities and values. At the same time, individual investors continue to massively seek sustainable investment options, with younger generations making it an essential priority.<\/p>\n<\/div>