Sustainable finance

Sustainable Finance Disclosures Regulation (SFDR)

The Regulation on sustainability-related disclosures in the financial services sector (Sustainable Finance Disclosures Regulation or SFDR) became applicable on 10 March 2021. It introduces new disclosure obligations for insurance intermediaries providing advice with regard to insurance-based investment products (IBIPs) and for investment firms in order to integrate sustainability factors in their investment decisions and advice processes, as part of their duty to act in the best interest of clients. SFDR provides for an exemption from its scope for self-employed and entities with less than three employees. Member States may decide to opt-out from this exemption.

These sustainability-related obligations apply to all financial products as defined in SFDR, including IBIPs, portfolio management, pension products and PEPPs, regardless of whether or not they are designed as “green” products with an ESG profile (Environmental, Social and Governance).

There are disclosure obligations at entity- and at product level.


Insurance and financial intermediaries must:

  • publish information on their websites about their policies on the integration of sustainability risks in their investment advice or insurance advice,
  • publish on their websites and include information on how their remuneration policies are consistent with the integration of sustainability risks,
  • publish on their websites information as to whether they consider in their investment advice or insurance advice the principal adverse impacts on sustainability factors or information as to why they do not do so.
  • disclose, as pre-contractual disclosures in relation to each financial product, (i) the manner in which sustainability risks are integrated in their investment/insurance advice, and (ii) the result of the assessment of the likely impacts of sustainability risks on the returns of the financial products they advise on,
  • ensure that any information published is up to date.
  • ensure that their marketing communications do not contradict the information disclosed pursuant to SFDR.


When acting as product manufacturers, insurance and financial intermediaries will be required to make additional disclosures at entity level, at pre-contractual level and at periodic level about the green financial products they make available. Under the SFDR, green products can either:

  1. have only sustainable investment as their objective (“dark green”, Article 9 of SFDR), or
  2. promote environmental or social characteristics (“light green”, Article 8 of SFDR).