SFDR: Regulation (EU) 2019/2088 and RTS 2022/1288
Ask the law
Ask a plain question about fund regulation. The answer is built only from the mined legal text, with every point cited to the exact Article — or an honest “not covered”. Not legal advice.
SFDR sets sustainability disclosure duties for financial market participants, including AIFMs and UCITS management companies, and for financial advisers. Participants disclose at three levels: the firm's website, each product's pre-contractual documents and, for Article 8 and Article 9 products, the periodic report. Every product carries the Article 6 risk disclosure. The Level 2 RTS sets the templates. How to complete the periodic templates and the PAI statement is covered in the SFDR periodic reporting guide. This page summarises the law.
Scope and the core mechanism
SFDR binds two groups. A financial market participant under Article 2(1) includes an AIFM, a UCITS management company, registered EuVECA and EuSEF managers, and firms providing portfolio management. A financial adviser under Article 2(11) includes an AIFM or UCITS management company that gives investment advice. For fund managers, the relevant financial products under Article 2(12) are AIFs, UCITS and managed portfolios. Article 17 exempts advice firms with fewer than three staff unless the member state opts them in.
The duties stack in layers. Firm-level duties sit in Articles 3 to 5, on the firm's website. Product duties start with Article 6 for every product. Products that meet the Article 8 or 9 tests add more. They also disclose on the website under Article 10 and in periodic reports under Article 11. Article 6(3) puts the product disclosures inside the documents a fund already issues: the Article 23 AIFMD investor disclosure for an AIF, and the prospectus for a UCITS.
The product categories turn on two tests. Article 8 applies where a product promotes environmental or social characteristics, provided investee companies follow good governance practices. Article 9 applies where a product has sustainable investment as its objective, including a reduction in carbon emissions. Article 2(17) defines a sustainable investment as one that contributes to an environmental or social objective. It must not significantly harm any of those objectives, and investee companies must follow good governance practices.
In practice: Articles 8 and 9 are disclosure duties that apply when their conditions are met. Neither is a label the regulator grants. Separately, Article 13 requires marketing communications not to contradict any SFDR disclosure.
Key provisions
| Provision | What it says | The practical point |
|---|---|---|
| Risk and remuneration policies (Art. 3, Art. 5) | Participants publish on their website how they integrate sustainability risks into investment decisions. Advisers do the same for their investment or insurance advice. Pay policies must state how they fit with that. | Article 12 requires the website text to be kept current, with a clear explanation of each amendment. |
| Entity-level PAI (Art. 4) | A participant either publishes a statement on its due diligence policies for principal adverse impacts (PAI), or explains why it does not consider them. Advisers make a separate disclosure under Art. 4(5). | From 30 June 2021 the statement is mandatory for a participant above an average of 500 employees during the financial year, tested at its balance sheet date. Art. 4(4) applies the same test to the parent of a large group, counted across the group. |
| Sustainability risks (Art. 6) | Each product's pre-contractual disclosure says how sustainability risks are built in and how they may affect returns. | Where the manager deems the risks not relevant, it must say why, clearly and concisely. |
| Product-level PAI (Art. 7) | From 30 December 2022, a firm that considers PAI explains for each product whether and how the product considers them. | A firm that opts out at entity level states, product by product, that it does not consider adverse impacts and why. |
| Article 8 products (Art. 8) | Pre-contractual disclosure of how the characteristics are met and, where an index is designated, whether it is consistent with them. | Good governance at investee companies is part of the test itself. |
| Article 9 products (Art. 9) | With a designated index: how it aligns with the objective and differs from a broad market index. Without one: how the objective is attained. | A carbon-reduction objective must reference the Paris Agreement goals. Where no EU Climate Transition or Paris-aligned Benchmark is available, Art. 9(3) requires a detailed explanation. |
| Website (Art. 10) | For each Article 8 or 9 product: the characteristics or objective, the methodologies and data sources, and the Article 8, 9 and 11 information. | RTS Article 23 puts it in a section titled "Sustainability-related disclosures", next to the product's other information. |
| Periodic reports (Art. 11) | Article 8 products report the extent the characteristics were met. Article 9 products report overall sustainability impact through indicators. | The report rides the AIFMD Article 22 or UCITS annual report. Art. 11(1) to (3) applied from 1 January 2022. |
| Marketing (Art. 13) | Marketing communications must not contradict SFDR disclosures, without prejudice to stricter sectoral rules. | Art. 13(3) adds a website disclosure where a firm issues an ESG rating to third parties in its marketing. |
| ESAP (Art. 18a) | From 10 January 2028, website disclosures under Arts. 3, 4, 5 and 10 are also submitted to a collection body for the European single access point. | Each filing carries the firm's LEI, so a firm that is a legal person must obtain one. |
The RTS follows the same layers. Chapter I sets presentation rules: searchable format, dated updates, version history in file names, and LEIs and ISINs where available. Chapter II covers PAI. Under RTS Article 4, the statement is published by 30 June each year for the preceding calendar year, in the Annex I template. A first statement covers the period from when PAI were first considered to 31 December, published by the following 30 June. Table 1 lists 18 mandatory indicators. Chapter III covers pre-contractual annexes (Annex II for Article 8, Annex III for Article 9). Chapter IV covers website sections, and Chapter V covers periodic annexes (Annexes IV and V). Article 68 applies the RTS from 1 January 2023.
In practice: the RTS fixes the website section titles and their order. RTS Article 24 sets them for Article 8 products and RTS Article 37 sets a different list for Article 9 products. Reordering or renaming them departs from the template.
Amendment history
| Date | Instrument | What changed |
|---|---|---|
| 27 Nov 2019 | Regulation (EU) 2019/2088 | The original regime (OJ 9 December 2019), applying from 10 March 2021. |
| 18 Jun 2020 | Regulation (EU) 2020/852 | The Taxonomy Regulation. Its Article 25 inserted Art. 2a (DNSH), Arts. 8(2a) and 9(4a), and Art. 11(1)(c) and (d). Taxonomy disclosures applied from 1 January 2022 for the two climate objectives and 1 January 2023 for the rest. |
| 6 Apr 2022 | Delegated Regulation (EU) 2022/1288 | The Level 2 RTS (OJ 25 July 2022), applying from 1 January 2023. |
| 31 Oct 2022 | Delegated Regulation (EU) 2023/363 | Replaced Annexes II to V. Taxonomy figures now show fossil gas and nuclear activities separately (OJ 17 February 2023). |
| 13 Dec 2023 | Regulation (EU) 2023/2869 | Inserted Art. 18a on submitting disclosures to the European single access point from 10 January 2028. |
| 27 Nov 2024 | Regulation (EU) 2024/3005 | The ESG ratings regulation. Inserted Art. 13(3) on ESG ratings disclosed in marketing communications. |
What it works with
SFDR is a disclosure layer on top of the fund regimes. The AIFMD investor disclosure and annual report carry it for AIFs, and the UCITS Directive prospectus and annual report carry it for UCITS. The Taxonomy Regulation supplies the alignment figures in Articles 5 and 6. Its Article 7 requires a fixed statement in products outside Articles 8 and 9. The Benchmarks Regulation defines the climate benchmarks named in Article 9(3) in its Article 3(1), points 23a and 23b. The ESMA fund-names Guidelines set investment thresholds and exclusions by the terms in a fund's name (summary). Fund marketing must also meet Article 4 of the cross-border distribution Regulation. Marketing of a PRIIP must not contradict its KID under Article 9 of the PRIIPs Regulation.
For the operational side, the SFDR periodic reporting guide works through the periodic templates and reclassification. The SFDR disclosure deadlines page tracks the 30 June PAI date and the annual-report dates. The UK runs a separate SDR regime with four sustainability labels, summarised in the FCA ESG sourcebook page.
On 20 November 2025 the Commission proposed amending SFDR in COM(2025) 841. It is a proposal, not law. The articles summarised here stand until an amending regulation is adopted and applies.
In practice: the 30 June PAI statement covers the firm, not any one fund. The employee test in Article 4(3) or (4) applies even where no fund is under Article 8 or 9.
To verify
- SFDR review: whether COM(2025) 841 has been adopted and from when it applies, per procedure 2025/0361(COD).
- Later RTS amendments: whether any delegated regulation has amended 2022/1288 since 2023/363, per the EUR-Lex consolidated RTS.
- ESG rating disclosures: whether the RTS mandated by Article 13(3) has been adopted, per the Official Journal.
- ESAP format: the metadata and machine-readable formats for Article 18a submissions, once the implementing technical standards are adopted.
Ask a question about this law
Get an article-cited answer built only from the mined legal text — or an honest “not covered”.
Ask the law →