Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (SFDR), Regulation (EU) No 1286/2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs) and repealing Commission Delegated Regulation (EU) 2022/1288
Date: 2025-11-20
Institutions: Directorate-General for Financial Stability, Financial Services and Capital Markets Union, European Commission
Subjects: consumer information, disclosure of information, financial legislation, financial occupation, financial risk, financial services, insurance, regulation of investments, risk management, sustainable finance

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   EUROPEAN COMMISSION  Brussels, 20.11.2025  COM(2025) 841 final 2025/0361 (COD)  Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (SFDR), Regulation (EU) No 1286/2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs) and repealing Commission Delegated Regulation (EU) 2022/1288   (Text with EEA relevance) {SEC(2025) 841 final} - {SWD(2025) 838 final} - {SWD(2025) 839 final}  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

This  legislative  proposal  puts  forward  amendments  to  the  Sustainable  Finance  Disclosure 
Regulation (SFDR – Regulation (EU) 2019/2088)1. The SFDR was adopted on 27 November 
2019 and has been in application since March 2021. It represents one of the first pieces of the 
EU  Sustainable  Finance  framework  and  is  part  of  a  broader  package  of  sustainability 
disclosure  rules,  tools  and  standards  for  non-financial  and  financial  companies  adopted 
pursuant to the Commission’s 2018 Action Plan on Financing Sustainable Growth2.  

The  SFDR  is  a  disclosure  framework  which  sets  detailed  sustainability  disclosures  for 
financial  intermediaries  and  financial  products  regarding  how  they  consider  various 
environmental, social and governance (ESG) factors. Its objective is to increase transparency, 
combat  greenwashing  and  protect  investors  by  ensuring  that  information  in  this  respect  is 
disclosed  to  investors  by  financial  market  participants  such  as  asset  managers  and  pension 
providers, and by financial advisers. More broadly, the SFDR thus contributes to the aims of: 
(i) helping to attract private funding to facilitate the transition towards greater sustainability; 
and (ii) helping European companies to seize competitive opportunities in this area. 

The  SFDR  is  complemented  by  a  Commission  Delegated  Regulation3  which  lays  down 
detailed  disclosure  rules  for  how  financial  market  participants  and  financial  advisers  should 
disclose  sustainability  information  towards  investors  about  their  investment  activities  and 
their  financial  products  in  order  to  help  the  latter  make  informed  choices.  The  Delegated 
Regulation specifies notably the details of the information to be disclosed to investors in pre-
contractual  documents,  on  websites  and  in  periodic  reports  both  for  financial  market 
participants as entities and for the financial products which they make available. 

For entity-level  disclosures, financial market  participants  and financial advisers are required 
to  explain  how  they  integrate  ESG  considerations  into  their  internal  procedures,  including 
their due diligence processes and consideration of responsible business practices. For product-
level  disclosures,  including  for  investment  funds,  insurance-based  investment  products  and 
pension  products,  they  are  required  to  disclose  sustainability  characteristics  and  objectives. 
Article  8  of  the  SFDR  establishes  that,  for  products  that  promote  environmental  or  social 
characteristics, 
they  promote  such 
environmental and social characteristics. Article 9 of the SFDR establishes that, for products 
that  have  a  sustainable  investment  as  their  objective,  financial  market  participants  must 
explain  the  sustainability  objective  and  show  how  the  objective  is  attained.  Finally,  all 
products in the scope of the SFDR are subject to the disclosures under Article 6 of the SFDR, 
according  to  which  financial  market  participants  must  disclose  how  sustainability  risks  are 
integrated  in  the  investment  decision  process  when  relevant,  as  well  as  the  results  of  the 
assessment of the likely impacts of sustainability risks on the returns of the products. 

financial  market  participants  must  show  how 

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Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on 
sustainability‐related disclosures in the financial services sector (OJ L 317, 9.12.2019, pp. 1–16). 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic  and  Social  Committee  and  the  Committee  of  the  Regions:  Action  Plan  on  Financing 
Sustainable Growth (COM (2018) 97 final).  
Commission Delegated Regulation (EU) 2022/1288 (OJ L 196, 25.7.2022, pp. 1–72). 

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Since its inception, the SFDR has had broad-reaching effects on the market, accompanying a 
steadily  increasing  demand  for  financial  products  with  ESG  characteristics.  Products 
disclosing under Articles 8 and 9 of the SFDR account for almost 50% of EU Assets under 
Management (AuM), representing more than 60% of EU funds4. Europe is by far the largest 
market for such funds, accounting for up to 84% of global sustainable fund assets5. 

The comprehensive assessment of the SFDR undertaken by the Commission under Article 19 
of the Regulation since 2023 has however identified several shortcomings that have emerged 
since its entry into application. The evidence gathered showed that while the objectives of the 
SFDR remain broadly supported, several aspects of the rules are considered complex, difficult 
to implement, and ineffective. Problems of misalignment between concepts and definitions in 
the  SFDR  and  in  other  EU  sustainable  finance  legislation,  coupled  with  challenges  for 
financial market participants to access reliable and comprehensive ESG data, have contributed 
to the complexity of the framework. Evidence shows that the objective of investor protection 
has not been sufficiently well served, compounded by the misuse of Articles 8 and 9 as quasi-
labels and the lack of clarity regarding certain concepts and obligations. 

The  review  of  the  SFDR  is  included  among  the  simplification  initiatives  in  the  2025 
Commission  Work  Programme6.  In  line  with  the  Political  Guidelines  for  2024-20297,  the 
objective  is  to  stay  the  course  on  the  goals  set  out  in  the  European  Green  Deal,  but  with 
simpler  rules, 
lower  administrative  burden  and  better  enforcement.  The  need  for 
simplification of the sustainable finance framework to lower compliance costs for companies 
in the EU was also highlighted in the Report on ‘The future of European competitiveness8’ by 
Mario Draghi.  

Against  this  background,  the  Commission  proposes  to  review  the  SFDR  to  make  it  more 
efficient, simple and proportionate. Key in this effort is ensuring the integrity of the EU single 
market  for  sustainable  finance  by  focusing  on  requirements  which  mitigate  risks  of 
greenwashing  and  better  help  investors  seize  and  compare  opportunities  in  sustainability-
linked financial products. At the same time, the review aims at boosting the competitiveness 
of  Europe’s  financial  sector  by  ensuring  conditions  which  make  business  easier  and 
deepening  the  single  market  for  sustainability-linked  financial  products,  thus  helping  to 
allocate capital for Europe’s sustainable prosperity.  

The  proposed  changes  pursue  two  objectives.  The  first  is  to  simplify  and  reduce  the 
sustainability-related  administrative  and  disclosure  requirements  for  financial  market 
participants and financial advisers, as well as to enhance the coherence of the framework for 
the  operational  needs  of  financial  market  participants.  The  second  is  to  improve  end-
investors’  ability  to  understand  and  compare  sustainability-linked  financial  products,  and  to 
protect them against potential misleading ESG claims. 

The  present  proposal  therefore  puts  forward  a  considerable  simplification  of  reporting 
requirements,  and  a  three-way  categorisation  of  financial  products  with  ESG  features, 

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 Commission calculations based on data from global data providers.  
 See  data  from  the  Platform  on  Sustainable  Finance  (PSF):  https://finance.ec.europa.eu/sustainable-
finance/overview-sustainable-finance/platform-sustainable-finance_en 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic  and  Social  Committee  and  the  Committee  of  the  Regions:  Commission  work  programme 
2025. Moving forward together: a Bolder, Simpler and Faster Union (COM (2025) 45 final).  
Priorities 2024-2029 - European Commission 
The Draghi report on EU competitiveness 

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incorporating  wide  stakeholder  feedback  and  building  on  current  market  practices.  The 
proposal also makes targeted consequential amendments to Regulation (EU) No 1286/2014 on 
packaged retail and insurance-based investment products (PRIIPS)9 and repeals Commission 
Delegated  Regulation  (EU)  2022/128810,  implementing  the  current  SFDR,  as  of  the  date  of 
application of the new framework. 

• 

Consistency with existing policy provisions in the policy area 

The SFDR is closely linked with other pieces of the sustainable finance framework, including 
the  EU  Taxonomy11,  the  EU  Benchmarks  Regulation12,  the  Corporate  Sustainability 
Reporting  Directive  (CSRD)13,  the  Corporate  Sustainability  Due  Diligence  Directive 
(CSDDD)14,  as  well  as  relevant  parts  of  the  Markets  in  Financial  Instruments  Directive 
(MiFID  II)15,,  the  Insurance  Distribution  Directive  (IDD)16  and  the  Shareholder  Rights 
Directive  (SRD)17.  Together,  they  support  companies  and  the  financial  sector  in  mobilising 
private funding into sustainable projects and technologies. In particular, reporting obligations 
for  financial  market  participants  under  the  SFDR  build  on  the  reporting  obligations  for 
companies under the CSRD and the Taxonomy Regulation. The review of the SFDR is thus 
necessary  to  reflect  the  changes  introduced  by  the  proposed  ‘Omnibus’18  simplifications 
regarding  sustainability  information  from  companies,  in  particular  the  future  scope  of  the 
corporate disclosures from companies under the CSRD. 

The review  also  builds on the guidelines by the European Securities and Markets  Authority 
(ESMA)  on  funds’  names  using  ESG  or  sustainability-related  terms19.  For  the  purposes  of 
ensuring that ESG claims under the revised SFDR are clear, fair and not misleading, financial 

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Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 
on key information documents for packaged retail and insurance-based investment products (PRIIPs) 
Commission  Delegated  Regulation  (EU)  2022/1288  of  6  April  2022  supplementing  Regulation  (EU) 
2019/2088 of the European Parliament and of the Council  
Regulation  (EU)  2020/852  of  the  European  Parliament  and  of  the  Council  of  18  June  2020  on  the 
establishment  of  a  framework  to  facilitate  sustainable  investment  and  amending  Regulation  (EU) 
2019/2088.  
Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices 
used as benchmarks in financial instruments and financial contracts or to  measure the performance of 
investment  funds  and  amending  Directives  2008/48/EC  and  2014/17/EU  and  Regulation  (EU)  No 
596/2014. 
Directive  (EU)  2022/2464  of  the  European  Parliament  and  of  the  Council  of  14  December  2022 
amending Regulation (EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive 
2013/34/EU, as regards corporate sustainability reporting. 
Directive (EU) 2024/1760 of the European Parliament and of the Council of 13 June 2024 on corporate 
sustainability due diligence and amending Directive (EU) 2019/1937 and Regulation (EU) 2023/2859 
(to apply from July 2028). 
Commission Delegated Regulation (EU) 2021/1253 of 21 April 2021 amending Delegated Regulation 
(EU)  2017/565  as  regards  the  integration  of  sustainability  factors,  risks  and  preferences  into  certain 
organisational requirements and operating conditions for investment firms. 
Commission Delegated Regulation (EU) 2021/1257 of 21 April 2021 amending Delegated Regulations 
(EU)  2017/2358  and  (EU)  2017/2359  as  regards  the  integration  of  sustainability  factors,  risks  and 
preferences  into  the  product  oversight  and  governance  requirements  for  insurance  undertakings  and 
insurance  distributors  and  into  the  rules  on  conduct  of  business  and  investment  advice  for  insurance-
based investment products. 
Directive 2007/36/EC of the European Parliament and of the Council of 11 July 2007 on the exercise of 
certain rights of shareholders in listed companies, as amended in 2017, notably Chapter Ib. 
Omnibus I - European Commission.  
ESMA Guidelines on funds’ names using ESG or sustainability-related terms (ESMA34-1592494965-
657), August 2024.   

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market  participants  should  also  consult  supervisory  guidance  prepared  by  the  European 
Supervisory  Authorities20.  Moreover,  the  notion  of  ESG-related  claims  made  by  financial 
products regarding how and the extent to which categorised products invest in or contribute to 
either  transition  or  sustainability  objectives,  or  integrate  sustainability  factors  in  their 
investment strategy beyond sustainability risk management considerations, is consistent with 
the  notion  of  ‘environmental  claims’  under  Article  2(1)(o)  of  Directive  2005/29/EC  (Unfair 
Commercial  Practices  Directive,  as  amended  by  Directive  (EU)  2024/825  as  regards 
empowering  consumers  for the green transition21). Consistent  with  Article  3(4) of Directive 
2005/29/EC,  requirements  under  that  Directive  would  be  met  by  proper  application  of  the 
requirements of this Regulation.  

Finally, given that this Regulation adapts the information requirements related to the degree to 
which  financial  products  invest  in  sustainability-related  activities,  including  activities  that 
contribute to an environmental objective as set out in Article 9 of the Taxonomy Regulation, 
the requirement for financial market participants to disclose the information under Articles 5 
to 7 of the Taxonomy Regulation is henceforth no longer a blanket obligation but flows from 
whether and the extent to which they choose to use the Taxonomy Regulation in this respect. 
Further, the references in those Articles of the Taxonomy Regulation would no longer refer to 
paragraphs  involving  disclosures  under  Article  8  and  9  of  the  SFDR,  but  to  criteria  for 
sustainability-related product categories, and are thus also moot. Likewise, there is no longer 
an obligation for these disclosures to mention the statements referred to in Articles 6 and 7 of 
the Taxonomy Regulation regarding the shares of financial products that take and do not take 
into  account  EU  criteria  for  environmentally  sustainable  economic  activities  under  that 
Regulation. 

• 

Consistency with other Union policies 

As mentioned above, the SFDR review is a simplification initiative in the 2025 Commission 
Work Programme and part of the follow-up to the Draghi report. The proposed changes aim 
to  facilitate  the  implementation  of  the  sustainable  finance  framework.  Consistent  with  the 
broader  simplification  agenda  and  the  objective  of  delivering  simpler  rules  through  better 
implementation  under the Savings and  Investments  Union, the Commission  has published  a 
list  of  non-essential  level  2  measures  which  includes  the  repeal  of  several  level  2  measures 
stemming from the SFDR.22  

The  updated  rules  will  also  address  current  barriers  to  the  cross-border  distribution  of 
financial products with sustainability features which impede the potential of the single market 
in  sustainable  finance  from  effectively  mobilising  savings  towards  Europe’s  sustainable 
prosperity. The new rules should therefore promote a more effective functioning of the single 
market  for  sustainable  finance,  including  by  improving  transparency  and  empowering 

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ESMA36-429234738 -154 Thematic notes on clear, fair & not misleading sustainability-related claims; 
EIOPA-BoS-24-160- Opinion on sustainability claims and greenwashing 
Directive (EU) 2024/825 of the European Parliament and of the Council of 28 February 2024 amending 
Directives  2005/29/EC  and  2011/83/EU  as  regards  empowering  consumers  for  the  green  transition 
through better protection against unfair practices and through better information 
De-prioritisation of Level 2 acts in financial services legislation - Finance  

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investors across the Union to participate in EU capital markets in line with the objectives of 
the Savings and Investments Union23. 

In the same spirit of the recently published initiatives to advance the Savings and Investments 
Union,  such as  the recommendations on the Savings and Investment  Accounts (SIAs)24,  the 
SFDR  is  also  aimed  at  supporting  measures  to  create  better  financial  opportunities  and 
financial outcomes for citizens who wish to invest. It is specifically designed for individuals 
looking  to  grow  their  savings  by  investing  in  financial  markets  in  alignment  with  their 
sustainability preferences. In addition, the Commission’s strategy on financial literacy, aimed 
at  helping  citizens  better  understand  investment  principles,  opportunities  and  risks25,  will 
allow citizens and investors to get a greater understanding of the economic effects of choosing 
to  finance  certain  activities,  as  well  as  their  impacts  and  implications  for  employment, 
sustainability, social outcomes and resilience.  

The review will contribute to the objectives of the European Green Deal in a more efficient 
way,  including  climate  neutrality  under  the  Climate  Law26,  the  environmental  transition 
supported by an innovative and circular economy, and the achievement of the UN Sustainable 
Development Goals (SDGs).  

Finally, the SFDR review builds on the guidance from the Commission on the application of 
the  EU  sustainable  finance  framework  regarding  the  defence  sector,  presented  in  the 
Communication on a European Defence Industrial Strategy27 and delivered through the June 
2025  Defence  Readiness  Omnibus28,  which  was  announced  in  the  March  2025  Joint  White 
Paper  for  European  Defence  Readiness  203029.  It  is  therefore  fully  consistent  with  the 
objectives  of  the  Joint  White  Paper  and  the  Defence  Readiness  Roadmap  203030  to  further 
bolster access to finance for the defence and space sector.  

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

The legal basis of the review is the same as the existing Regulation (EU) 2019/2088, meaning 
Article 114 of the Treaty on the functioning of the European Union (TFEU), which allows the 
adoption of measures for the approximation of national provisions having as their object the 
establishment  and  functioning  of  the  internal  market.  The  revised  rules  help  underpin  the 
effective  and  efficient  functioning  of  the  internal  market  for  sustainable  finance,  safeguard 

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Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic and Social Committee and the Committee of the Regions: Savings and Investments Union: A 
Strategy to Foster Citizens’ Wealth and Economic Competitiveness in the EU (COM (2025) 124 final).  
Commission Recommendation on Increasing the availability of Savings and Investments Accounts with 
simplified and advantageous tax treatment (C(2025)6800 final). 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic and Social Committee and the Committee of the Regions on a Financial Literacy Strategy for 
the EU (COM (2025) 681 final).  
Regulation  (EU)  2021/1119  of  30  June  2021  establishing  the  framework  for  achieving  climate 
neutrality (European Climate Law).  
Joint  Communication  to  the  European  Parliament,  the  Council,  the  European  Economic  and  Social 
Committee and the Committee of the Regions: A new European Defence Industrial Strategy: Achieving 
EU readiness through a responsive and resilient European Defence Industry (JOIN (2024) 10 final).  
Defence Readiness Omnibus - European Commission 
Joint White Paper for European Defence Readiness 2030 JOIN (2025) 12 final).  
Readiness Roadmap 2030 - European Commission 

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competition  between  different  financial  market  participants  and  incentivise  behavioural 
changes toward greater innovation.  

• 

Subsidiarity (for non-exclusive competence)  

This proposal complies with the principle of subsidiarity as set out in Article 5 of the Treaty 
on  European  Union  (TEU).  The  need  for  a  coherent  common  framework  for  sustainability-
related disclosures for financial products across the EU was established as part of the original 
SFDR.  The  objectives  remain  fully  valid  and  enjoy  broad  stakeholder  support.  Without 
effective  Union-level  action,  the  problems  identified  since  the  entry  into  force  of  the 
Regulation would persist and would not be tackled in an effective, efficient and coherent way. 
Financial market  participants  and investors would continue to face undue complexity in the 
application  of  the  rules.  Excessively  lengthy  disclosure  rules  and  templates  involving 
sustainability characteristics in the business practices of financial market participants, as well 
as  in  the  financial  products  they  offer  to  investors,  would  remain  in  place.  Uncertainty  and 
insufficient comparability would continue to mark the availability of ESG financial products, 
negatively impacting their credibility and uptake. 

Given  the  problems  outlined  above,  the  necessary  simplification  and  adjustment  of  the 
existing  SFDR  framework  can  only  be  implemented  in  a  coherent  and  effective  way  at  EU 
level.  This  effective  EU-level  action  would  also  help  scale  up  private  sustainable  finance 
across the Union, boost the proper functioning of the single market for sustainable finance and 
ultimately contribute to  improving transparency for investors to  enable their participation  in 
EU capital markets, in line with the objectives of the Savings and Investments Union.  

• 

Proportionality 

The proposed amendments respect the principle of proportionality, as set out in Article 5 of 
the Treaty  on European Union (TEU). They do not  go beyond what is  necessary to  achieve 
the  objectives  of  simplification,  transparency  and  investor  protection,  while  achieving  the 
scaling  up  of  private  sustainable  finance  in  support  of  Europe’s  sustainability  and 
competitiveness goals. In addition, based on the proportionality principle, the present proposal 
builds on market practices.   

• 

Choice of the instrument 

This  proposal  amends  Regulation  (EU)  2019/2088  via  an  amending  Regulation.  A  directly 
applicable  regulation,  providing  full  harmonisation, 
to  address  market 
fragmentation  and  reduce  the  scope  for  additional  national  rules  to  tackle  perceived 
shortcomings  and  ensure  the  desired  simplification  of  requirements  and  disclosures,  for  the 
benefit  of both  financial  market  participants and investors, in  a harmonised way throughout 
the Union. 

is  needed 

3. 

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RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EX-POST 

EVALUATIONS, 

OF 

STAKEHOLDER 

Ex-post evaluations/fitness checks of existing legislation 

In  December  2022,  the  Commission  announced  a  comprehensive  assessment  of  the  SFDR 
framework.  Two  consultations  were  issued  (one  public  and  one  targeted)  running  from 
September until December 2023. 

The assessment served to gather feedback on the functioning of the framework and assessing 
any shortcomings with regard to how well it is achieving its ultimate objectives. In particular, 

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this concerned how the  rules were working  in terms of helping to  attract private funding to 
facilitate the transition of the European economy towards greater sustainability and, as part of 
this, empowering investors to better understand and compare the products on offer. 

The  assessment  and  its  various  steps,  outlined  in  the  next  section,  were  recapped  in  an 
evaluation  of  the  SFDR,  carried  out  as  part  of  the  impact  assessment  accompanying  this 
proposal  (see  under  ‘Impact  assessment’  below).  The  evaluation  results  help  identify  and 
confirm the key problem drivers, and inform the lessons learned for the review. 

• 

Stakeholder consultations 

The following  section provides  an overview of the stakeholder  consultations carried out for 
the review:  

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– 

– 

– 

Targeted and open public consultations 

Technical workshops and roundtables 

Commission expert group opinions (Platform for Sustainable Finance – PSF) 

Input from the European Supervisory Authorities (ESAs) 

Engagement with Member States  

Continuous engagement with experts  

Call for Evidence 

Targeted and open public consultations 

Two public consultations  ran from September to December 2023 (targeted31 and open32). A 
summary report33 was published in May 2024.  

324 organisations and individuals  participated in  the targeted  consultation.  Financial market 
participants  and  financial  advisers  made  up  the  largest  group  of  respondents,  followed  by 
NGOs.  Respondents  were  predominantly  from  EU  countries.  Respondents  from  non-EU 
countries were mostly from the UK and the US.  

The responses showed significant support for the SFDR policy goals but mixed views on how 
the implementation of the regulation delivered against its specific objectives. The majority of 
respondents  agreed  that  the  SFDR  was  currently  not  being  used  solely  as  a  disclosure 
framework as intended, but also as a labelling and marketing tool (in particular the disclosures 
under Article 8 and 9). Many also highlighted that inconsistencies between different parts of 
the sustainable finance framework pose challenges for both financial market participants and 
end  investors  and  queried  whether  the  SFDR  is  the  right  place  to  set  entity-level  disclosure 
requirements  to  inform  investors.  Most  respondents  called  for  the  disclosures  and 
sustainability-related concepts to be simplified and made more meaningful for investors. 

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Targeted  consultation  document:  Implementation  of  the  Sustainable  Finance  Disclosures  Regulation 
(SFDR).  
Sustainable Finance Disclosure Regulation - assessment 
Summary  report  of  the  open  and  targeted  consultations  on  the  implementation  of  the  Sustainable 
Finance Disclosures Regulation (SFDR) 

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The  majority  of  respondents  supported  setting  up  an  EU  categorisation  system  for  ESG 
financial products, focused on retail investors, accounting for the international investments of 
EU financial products, and leveraging existing market practices. 

Technical workshops and roundtables  

To complement the replies to the targeted and open consultations, the Commission held four 
technical  workshops  to  gather  further  technical  comments.  The  workshops  took  place  in 
October  and  December  2023,  and  in  January  2024.  An  additional  technical  roundtable  was 
conducted  with  consumers’  associations  in  December  2024  to  analyse  the  existing  EU 
consumer testing studies on retail investors’ sustainability preferences and understanding.  

PSF opinions 

The Platform for Sustainable Finance (PSF), a Commission expert group, submitted input in 
two  opinions.  The  first,  from  December  202334  addresses  the  main  questions  raised  by  the 
Commission  in  the  targeted  consultation.  In  December  2024,  the  PSF  published  a  second 
opinion35, outlining how a categorisation system for sustainable finance products could be set 
up and calibrated, with a proposal to set up three categories (called ‘sustainable’, ‘transition’ 
and ‘ESG collection’). The opinion covered the current state of ESG financial markets and the 
potential  impact  that  setting  certain  thresholds  could  have  on  current  products  falling  under 
Articles 8 and 9 of the SFDR. 

Input from the ESAs  

The  European  Supervisory  Authorities  delivered  in  June  2024  a  joint  opinion  on  the 
assessment  of  the  SFDR36  where  they  suggested  to  set  up  new  categories,  a  ‘sustainable 
product’  category  and  a  ‘transition  product’  category.  ESMA  published  its  own  further 
opinion “Sustainable investments: facilitating the investor journey” in July 2024 where among 
other things it strongly encouraged the establishment of a categorisation system37.  

Engagement with Member States  

The European Commission engaged with Member States in the context of the Member States 
Expert  Group38  in  two  meetings  (December  202439  and  June  202540),  requesting  their 
feedback and comments. The Commission also received numerous letters and position papers 
from Member State authorities and National Competent Authorities (NCAs) presenting their 
views on the review of the SFDR. 

34 
35 

36 
37 

38 
39 
40 

Platform Briefing on EC targeted consultation regarding SFDR Implementation, December 2023. 
Categorisation  of  Products  under  the  SFDR:  Proposal  of  the  Platform  on  Sustainable  Finance, 
December 2024.  
Joint ESAs Opinion on the assessment of the SFDR (JC 2024 06), June 2024.  
ESMA  Opinion  on  sustainable  investments:  Facilitating  the  investor  journey  (ESMA36-1079078717-
2587), July 2024.  
Member States expert group on sustainable finance (E03603) 
34th Meeting of the Member State Expert Group on Sustainable Finance 
39th Meeting of the Member States Expert Group on Sustainable Finance 

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Continuous engagement with experts  

The  European  Commission  engaged  continuously  with  experts  such  as  financial  market 
participants,  investors,  NGOs,  consumers’  associations,  trade  associations,  academics  and 
other interested stakeholders, on key challenges with the current SFDR and on how to set up 
categories. 

Call for Evidence  

Finally,  the  Commission  gathered  feedback  during  the  Call  for  Evidence  which  ran  from  2 
May  to  30  May  202541.  195  stakeholders  submitted  their  views.  The  largest  group  of 
respondents were businesses associations and companies, followed by NGOs, and to a lesser 
extent, national authorities. Respondents were predominantly from EU countries, with France, 
Germany, Belgium, Italy and Netherlands being the most represented.  

• 

Collection and use of expertise 

In  addition  to  the  feedback  collected  above,  the  Commission  reviewed  several  studies  and 
additional  data  sources,  from  both  stakeholder  and  academic  sources,  including  the  study 
requested  by 
the  European  Parliament  on  “the  current 
implementation of the SFDR”42, quoted in the impact assessment accompanying the proposal.  

the  ECON  Committee  of 

Material used to prepare the impact assessment and inform policy choices comes from diverse 
market participants and stakeholders, as well as other reputable and well-recognised sources. 
Findings were cross-checked across different  information sources to  avoid biases  caused by 
outliers or vested interests. 

• 

Impact assessment 

An impact assessment was carried out to prepare this legislative proposal. On 2 July 2025, the 
impact assessment report was examined by the Regulatory Scrutiny Board (RSB). Following 
a first  negative opinion,  the Board issued a positive opinion with  reservations on 8 October 
2025. 

In its comments, the RSB notably requested that the policy options should be better specified 
to allow for an adequate assessment and comparison, that the option of repealing the SFDR 
should be fully assessed alongside other options, that the coherence with the simplifications 
under the Omnibus proposals should be better established, and that the feasibility of creating 
reliable  categories  should  be  better  evidenced  including  given  challenges  with  ESG  data 
availability impacted by the Omnibus. A more detailed description of what the policy options 
would  concretely  look  like  was  thus  added,  mainly  by  providing  illustrative  details  for  the 
future  streamlined  disclosures,  to  be  further  specified  in  implementing  measures,  and  more 
detailed  criteria  for  the  three  proposed  categories.  A  full  analysis  of  the  repeal  option  was 
added,  along  with  further  analysis  to  demonstrate  the  steps  needed  in  the  review  to  ensure 
coherence  with  the  Omnibus.  Further  evidence  was  added  on  the  feasibility  to  set  ESG 
disclosures that would be meaningful and would be based on broadly  available, comparable 
and  credible  sustainability  information  which  responds  to  investors’  demand.  Finally,  the 

41 
42 

Revision of EU rules on sustainable finance disclosure 
Study requested by the ECON Committee: The current implementation of the Sustainability – related 
Financial Disclosure Regulation (SFDR); with an assessment of how the current framework is working 
for retail investors, July 2024.  

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analysis of costs, benefits and savings was further substantiated to support the above, based 
on  data  which  was  available  and  reliable.  The  policy  options  explored  in  the  impact 
assessment  aim  at  defining  the  essential  features  of  the  disclosures  and  categories  for  the 
revised Regulation, clearly framing the limited areas for supplementary rules needed in future 
implementing measures. Besides coherence between the SFDR and the rest of the sustainable 
finance framework, including the changes entailed by the Omnibus in terms of sustainability 
disclosures applicable to corporates, an important consideration was recognising and building 
upon  current  market  practices,  to  ensure  a  sufficient  degree  of  continuity  with  appropriate 
criteria  in  the  categorisation  of  products  that  are  already  being  applied  by  markets,  namely 
building on the ESMA fund name guidelines43.  

To achieve the objectives set for the review, the preferred options were assessed to be:  

(i) deleting disclosures at entity level regarding principal adverse impacts, largely cancelling 
out  the costs associated  with  entity-level  disclosures (25% of the overall costs linked to  the 
disclosures, saving an annual total of EUR 56 million in recurring costs), and removing any 
duplication between the SFDR and CSRD;  

(ii)  significantly reducing product-level disclosures, refocusing on templates for categorised 
products  with  fewer  sustainability  indicators,  facilitating  comparability  and  investors’ 
decisions, and considerably cutting the recurring costs linked to product disclosures; 

(iii)  setting  up  3  categories  for  ‘sustainable’,  ‘transition’,  and  ‘ESG  basics’  products44, 
covering a significant share of today’s ESG financial products, ensuring a coherent set of EU 
rules  for  all  ESG-focused  products  toward  which  end-investors  interested  in  sustainability 
could  be  directed  by  distributors  (under  subsequent  changes  to  the  delegated  acts  under 
MiFID and IDD). While some initial one-off costs from the creation of product categories are 
anticipated,  recurring  costs  are  expected  to  be  lower  than  those  of  the  current  SFDR  in  the 
longer  term  and,  overall,  are  offset  by  the  savings  achieved  by  the  other  elements  of  the 
review. 

• 

Regulatory fitness and simplification 

The  combination  of  the  preferred  options  has  the  potential  to  considerably  simplify  and 
improve  the  efficiency  of  the  legislation.  The  proposal  is  directly  relevant  for  SMEs  who 
represent  the  majority  of  financial  market  participants  in  scope.  Well  over  25%  of  the 
estimated costs for SMEs with the current rules (about EUR 163 million of annual recurring 
costs, of which about EUR 43 million are for entity-level disclosures and EUR 120 million for 
product  level  disclosures)  are  expected  to  be  reduced.  The  reduction  of  entity-level  costs  in 
the  present  proposal  is  certain  with  only  minimal  one-off  costs,  and  while  sufficient  data 
could  not  be  gathered  on  costs  associated  with  the  creation  of  product  categories,  it  can  be 
expected  that  more  than  50%  of  product-level  costs  can  be  saved  thanks  to  the  significant 
reduction  of  product-level  disclosures.  In  addition,  SMEs  would  benefit  more  than 
proportionally from simplification as pronounced cost digression effects are observed, i.e. in 

43 

44 

ESMA  guidelines  introduced  minimum  criteria  for  the  use  of  certain  key  ESG  terms  in  fund  names. 
They constitute the latest regulatory guidance, after notably a prior reclassification of Article 9 funds in 
Q4 2022, having resulted in some relabelling and renaming of EU sustainable finance funds. 
In contrast to the preparatory work carried out in the impact assessment, it was decided to introduce the 
category  names  in  the  Regulation  and  not  leave  this  for  implementing  measures.  Further  consumer 
testing is nonetheless foreseen notably for the interplay with relevant distribution rules.    

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relative terms SMEs incur much higher costs than larger firms due to certain minimum efforts 
that are necessary to build and maintain sustainability-related disclosures. 

SMEs are also indirectly affected as investees, as they can, together with the safeguards of the 
Omnibus (value chain cap), benefit from the flow of funds and be included in products under 
a simple categorisation system.  

In conclusion, the reduced administrative  requirements linked to  the removal  of  entity-level 
disclosures  eliminates  burdens  estimated  to  account  for  25%  of  the  costs  under  the  current 
rules,  largely  incumbent  on  financial  market  participants  which  are  SMEs.  In  addition,  the 
simplification of product-level disclosures and introduction of product categories building on 
market practices, which overall are expected to allow cost savings, are estimated to facilitate 
further overall burden reduction for SMEs toward the 35% target. 

• 

Fundamental rights 

The proposal promotes rights enshrined in the Charter of Fundamental Rights (the ‘Charter’). 
It integrates due consideration for the respect of  human rights, gender equality, fair and just 
working conditions and prohibition of child labour by companies (Articles 5, 23, 31 and 32 of 
the Charter), a high  level  of environmental protection (Article 37 of the  Charter)  as well as 
social cohesion (Article 36 of the Charter) and consumer protection (Article 38 of the Charter) 
since  its  main  objective  is  to  protect  the  integrity  of  the  EU  single  market  for  sustainable 
finance  by  ensuring  requirements  which  mitigate  risks  of  greenwashing,  and  to  better  help 
investors seize opportunities in sustainability-linked financial products. 

4. 

BUDGETARY IMPLICATIONS 

The proposal does not have a budgetary impact for the Commission.  

5. 

• 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

The Commission will monitor the implementation of the changes proposed in the Regulation 
through  established  processes  underway  in  particular  with  the  European  Supervisory 
Authorities and the Platform for Sustainable Finance (PSF).  

Three years after the entry into application of the Regulation, the ESAs and the NCAs would 
be  tasked  to  survey  and  assess  the  implementation  costs  linked  to  the  new  categorisation 
system.  The Commission could  also  work with  the ESAs to  conduct  regular assessments of 
occurrences of greenwashing and supervise sustainability-related claims, and with the PSF to 
conduct a targeted analysis of the regime and assess the degree of uptake of the categorisation 
system  and  the  implementation  of  simplified  disclosures.  Finally,  the  Commission  would 
work with the ESAs and consumer associations to measure consumer satisfaction a few years 
after the implementation of the regime.  

• 

Detailed explanation of the specific provisions of the proposal 

Article 1 introduces the following amendments to Regulation (EU) 2019/2088: 

(1) 

Changes to the subject matter (Article 1 SFDR) to reflect the revised scope focused 
on  financial  market  participants  who  manufacture,  make  available  or  manage 
financial products (i.e. removing financial advisers who do not carry out this activity 

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11 

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(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

(8) 

(9) 

from  the  scope)  and  including  the  creation  of  categories  for  sustainability-related 
financial products. 

Consequential  changes  to  some  definitions,  including  notably  the  deletion  of 
financial  advisers  and  the  addition  of  definitions  for  categorised  ‘sustainability-
related’ products as well as those categorised products claiming to achieve ‘impact’ 
as part of their strategy (Article 2 SFDR). 

Deletion  of  Article  2a  SFDR  on  the  empowerment  for  ESAs  to  develop  regulatory 
technical standards to be adopted by the Commission regarding the principle of do no 
significant  harm,  consistent  with  the  list  published  by  the  Commission  of 
implementing measures considered non-essential (‘de-prioritisation list’)45. 

Amendment of Article 3 to reflect removal of financial advisers from the scope. 

Deletion  of  entity-level  disclosure  requirements  in  Articles  4  and  5  regarding, 
respectively,  principal  adverse  impacts  and  remuneration  policies,  also  consistent 
with the de-prioritisation list. 

Amendment of Article 6 to reflect removal of financial advisers from the scope. 

Addition of new Article 6a on specific transparency restrictions for non-categorised 
products, as a result of the creation of categories for ‘sustainability-related financial 
products’.  Notably,  to  protect  investors,  non-categorised  products,  while  not 
prevented  from 
their  pre-contractual  and  periodic 
disclosures on whether and how they consider sustainability factors, are required to 
ensure  that  such  information  is  not  a  central  element  of  those  disclosures  and  does 
not constitute sustainability-related claims reserved for categorised products.  

information 

including 

in 

Creation of categories for financial products with transition (Article 7), ESG  basics 
(Article  8),  or  sustainable  features  (Article  9),  including  the  main  criteria  for 
financial products to qualify in each category, the exclusions which products in each 
category should not invest in,  and the information to be disclosed to investors. The 
revised Articles also repeal the previous empowerments, in accordance with the de-
prioritisation  list.  The  order  of  the  revised  Articles  reflects  continuity  with  the 
existing usage of, notably, Articles 8 and 9 as shorthand for products with different 
environmental and social features.   

Addition  of  new  Article  9a  on  financial  products  investing  in  or  combining 
categorised products, to clarify when these products are eligible to meet the criteria 
of  a  given  category,  and  to  set  out  transparency  rules  for  how  non-categorised 
financial  products  which  invest  in  categorised  financial  products,  but  not  in  the 
amounts  which  would  qualify  those  products  as  categorised  themselves,  should 
disclose information about those investments. Notably, such products should set out 
what share of their investments are in categorised financial products, relying on the 
information  regarding  the  latter  provided  by  financial  market  participants  in  the 
investment chain.  

(10) 

Amendment  of  Article  10  on  website  disclosures  by  financial  market  participants, 
reflecting  the  revised  scope,  the  creation  of  categories  for  ‘sustainability-related 
financial products’, and consistent with the de-prioritisation list. 

45 

De-prioritisation of Level 2 acts in financial services legislation - Finance 

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12 

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(11) 

(12) 

(13) 

(14) 

(15) 

(16) 

(17) 

(18) 

(19) 

(20) 

(21) 

Amendment of Article 11 on periodic disclosures by financial market participants on 
an  annual  basis,  reflecting  the  revised  scope,  the  creation  of  categories  for 
‘sustainability-related  financial  products’,  and  consistent  with  the  de-prioritisation 
list. 

Change to Article 12, to reflect removal of financial advisers from the scope.  

Addition of a new Article 12a setting out principles for financial market participants 
on the use of data and estimates for the purposes of this Regulation as well as rules 
on the information to be provided to investors upon request on relevant data sources 
and assumptions underpinning estimates. 

the  de-prioritisation 

Amendments to Article 13 on marketing communications and naming rules, notably 
reflecting  the  revised  scope,  the  creation  of  categories  for  ‘sustainability-related 
list.  Namely, 
financial  products’,  and  consistent  with 
sustainability-related claims in names and marketing communications would only be 
allowed  for  categorised  products,  with  the  exception  of  non-categorised  products 
under  Article  9a  that  would  be  able  to  make  such  claims  in  marketing 
communications  but  not  their  names.  In  addition,  amendments  to  Article  13 
incorporate  disclosure  requirements  from  Regulation  (EU)  2024/3005  for  financial 
market  participants  that  include  ESG  ratings  in  their  marketing  documentations, 
ensuring  that  information  on  such  ratings  is  available  as  part  of  the  website 
disclosures.  

Amendment  of  Article  14  to  reflect  the  revised  scope  and  preclude  additional 
national level requirements in order to avoid that these would go beyond information 
requirements and criteria for ‘sustainability-related financial products’ in the revised 
Regulation and cause fragmentation in the internal market.  

Change to Article 15 to reflect the revised scope.  

Addition of optional exemptions in Article 17 for specific types of products, notably 
of  the  closed-ended  type  created  before  the  entry  into  application  of  the  revised 
Regulation as well as a clarification that the creation of categories for ‘sustainability-
related financial products’ is without prejudice to labelling schemes with additional 
features in terms of transparency, governance and other requirements.  

Revision to Article 18 (reporting by ESAs) to reflect the revised subject matter and 
scope of the Regulation. 

Consequential targeted changes to Article 18a (European single access point). 

Changes  to  the  review  clause  (Article  19)  to  reflect  the  revised  subject  matter  and 
scope of the Regulation. 

Addition of new Articles 19a, 19b and 19c (transitional provisions for insurance and 
pension  products  which  are  not  affected  by  the  ESMA  fund  name  guidelines,  and 
Commission  empowerments  to  specify  the  conditions  for  investments  to  contribute 
to  given  transition-related  or  sustainability-related  objectives  or  to  integrate 
sustainability  factors  for  the  categorisation  of  financial  products  as  sustainability-
related  products,  and  the    disclosure  requirements  for  these  categorised  financial 
products via delegated acts).  

Article  2  amends  Regulation  (EU)  No  1286/2014  notably  by  specifying  disclosures  to  be 
included in the key information document for sustainability-related products to indicate which 
category they fall under. 

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13 

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repeals  Commission  Delegated  Regulation 

Article  3 
(EU)  2022/1288,  containing 
implementing measures adopted  under the current  SFDR, as  from  the  date of application of 
the revised Regulation. 

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14 

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2025/0361 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Regulation (EU) 2019/2088 on sustainability-related disclosures in the 
financial services sector (SFDR), Regulation (EU) No 1286/2014 on key information 
documents for packaged retail and insurance-based investment products (PRIIPs) and 
repealing Commission Delegated Regulation (EU) 2022/1288  

(Text with EEA relevance) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 114 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national parliaments, 
Having regard to the opinion of the European Economic and Social Committee46,  

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

The  March  2018  Action  Plan  on  Financing  Sustainable  Growth47  set  out  a  series  of 
steps to help mobilise private capital towards more sustainable economic practices and 
improved  sustainability-related  risk  management  in  the  financial  sector,  in  the  wake 
of,  notably,  the  Paris  Agreement48 on  climate  change  and  the  UN  2030  Agenda  for 
Sustainable  Development49.  Among  the  ensuing  actions,  the  Commission  proposed, 
and co-legislators adopted Regulation (EU) 2019/2088 of the European Parliament and 
of the Council,50  to  improve transparency on the consideration of sustainability risks 
and factors by financial market participants in financial services and financial products 
offered to investors. 

46 
47 

48 
49 

50 

OJ C , , p. . 
Communication from the Commission to the European Parliament, the European Council, the Council, 
the European Central Bank, the European Economic and Social Committee and the Committee of the 
Regions of 8 March 2018, Action Plan: Financing Sustainable Growth (COM(2018) 97 final). 
The Paris Agreement, OJ L 282, 19.10.2016, pp. 4. 
Transforming our world: the 2030 Agenda for Sustainable Development | Department of Economic and 
Social Affairs 
Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on 
sustainability‐related  disclosures  in  the  financial  services  sector  (OJ  L  317,  9.12.2019,  p.  1,  
ELI: http://data.europa.eu/eli/reg/2019/2088/oj). 

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(2) 

The  Communication  on  the  European  Green  Deal51  recalled  the  importance  of 
ensuring the mobilisation of private finance towards the objective of transforming “the 
EU  into  a  fair  and  prosperous  society,  with  a  modern,  resource-efficient  and 
competitive  economy  where  there  are  no  net  emissions  of  greenhouse  gases  in  2050 
and  where  economic  growth  is  decoupled  from  resource  use”.  The  steps  taken 
pursuant  to  the  Green  Deal  have  consistently  affirmed  the  important  role  of  private 
finance in helping to achieve climate neutrality by 2050 in accordance with Regulation 
(EU)  2021/1119  of  the  European  Parliament  and  of  the  Council52,  specific  sectoral 
sustainability targets in that context53, and the objectives of the REPowerEU plan54 to 
accelerate the development of secure and sustainable energy in the Union and reduce 
dependency  on  imported  fossil  fuels.  Commission  analyses  have  consistently 
highlighted  the  magnitude  of  investments  needed  to  achieve  the  EU’s  climate 
objectives:  over  the  2030  –  2050  period,  approximately  EUR  650  billion  (in  2023 
EUR)  will  have  to  be  allocated  yearly  for  the  transition  of  the  energy  system  alone 
across a variety of scenarios. In that context, unlocking and facilitating sustainability-
oriented private funds is critical for the Union to properly contribute financially to the 
New Collective Quantified Goal set at COP 29 and the additional climate finance goal 
to  mobilise  USD  1,3  trillion  a  year  from  2035,  to  boost  its  resilience  in  the  face  of 
climate change55 and to support the plan for EU competitiveness and decarbonisation 
(The  Clean  Industrial  Deal)56.  It  is  also  aligned  with  efforts  to  boost  the  defence 
industry  of  the  Union57  by  ensuring  that  the  sustainable  finance  framework  does  not 
prevent  capital  from  being  directed  towards  defence-related  activities,  and  help 
contribute to delivering a more integrated single market for savings and investments to 
support economic growth, innovation and competitiveness in the Union58. 

(3) 

Regulation  (EU)  2019/2088  has  been  instrumental  in  improving  transparency  as 
regards  the  opportunities  and  risks  in  investments  supporting  or  integrating  diverse 

51 

52 

53 

54 

55 

56 

57 

58 

L 

p. 

OJ 

243, 

Law’), 

Climate 

9.7.2021, 

(‘European 

Communication from the Commission to the European Parliament, the European Council, the Council, 
the  European  Economic  and  Social  Committee  and  the  Committee  of  the  Regions  of  11  December 
2019, The European Green Deal (COM(2019) 640 final). 
Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing 
the framework for achieving climate neutrality and amending Regulations (EC) No 401/2009 and (EU) 
2018/1999 
1, 
ELI: http://data.europa.eu/eli/reg/2021/1119/oj). 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic  and  Social  Committee  and  the  Committee  of  the  Regions  of  14  July  2021,  'Fit  for  55': 
delivering the EU's 2030 Climate Target on the way to climate neutrality (COM/2021/550 final). 
Communication from the Commission to the European Parliament, the European Council, the Council, 
the  European  Economic  and  Social  Committee  and  the  Committee  of  the  Regions  of  18  May  2022, 
REPowerEU Plan, (COM/2022/230 final). 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic  and  Social  Committee  and  the  Committee  of  the  Regions  of  12  March  2024,  Managing 
climate risks - protecting people and prosperity (COM(2024) 91 final). 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic and Social Committee and the Committee of the Regions, The Clean Industrial Deal: A Joint 
Roadmap for Competitiveness and Decarbonisation (COM(2025) 85 final) 
Joint  Communication  to  the  European  Parliament,  the  Council,  the  European  Economic  and  Social 
Committee  and  the  Committee  of  the  Regions  of  5  March 2024,  A  new  European  Defence  Industrial 
Strategy:  Achieving  EU  readiness  through  a  responsive  and  resilient  European  Defence  Industry, 
JOIN(2024) 10 final. 
Communication from the Commission to the European Parliament, the European Council, the Council, 
the European Central Bank, the European Economic and Social Committee and the Committee of the 
Regions,  Savings  and  Investments  Union  A  Strategy  to  Foster  Citizens’  Wealth  and  Economic 
Competitiveness in the EU (COM(2025) 124 final) and  

EN 

16 

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sustainability-oriented  aims  and  considerations.  Financial  market  participants  have  a 
common set of principles and requirements for the provision of sustainability-related 
information  regarding  financial  products  and  services  they  offer.  Regulation  (EU) 
2019/2088 benefitted investors in terms of a more structured framework for how that 
information  is  presented  to  them,  helping  competition,  choice  and  comparability 
between financial products and services with sustainability-related features and aims, 
even  if  not  to  the  full  of  its  potential.  National  competent  authorities  in  charge  of 
monitoring  compliance  of  financial  market  participants  with  the  requirements  of 
Regulation (EU) 2019/2088 have set up practices in relation to risks of greenwashing 
and developed a more common supervisory framework for their oversight.   

implementation 

the  Regulation’s 

Regulation (EU) 2019/2088, however, has been marked by implementation challenges 
both for financial market participants and for investors. A comprehensive assessment 
under Article 19 of the Regulation has found that, while its objectives remain broadly 
supported, 
is  associated  with  considerable 
complexity  and  costs  for  financial  market  participants.  In  addition,  the  information 
provided to end-investors has not, on the whole, been sufficiently clear and effective in 
helping  those  end-investors  understand  and  compare  diverse  sustainability-related 
financial products and services offered to them. Disclosures to investors under Articles 
8  and  9  of  Regulation  (EU)  2019/2088  have  also  been  used  by  the  market  in  a 
misleading  way  to  categorise  financial  products  as  sustainable  despite  the  lack  of 
criteria  that  could  fit  this  purpose.  Disclosures  under  those  Articles  have  also  been 
marked  by  varying  interpretations  and  implementation  practices,  which  led  to 
insufficient clarity for end-investors. In addition, diverging interpretations by national 
competent  authorities  also  emerged  and  supervisory  practices  and  expectations  have 
been impacted by the need to adapt to the introduction of new common guidelines for 
the  use  of  environmental,  social  and  governance  terms  in  the  names  of  investment 
funds (“ESMA guidelines on funds names”)59. Those implementation challenges have 
led  to  undue  costs  and  burdens  for  the  financial  sector  of  the  Union  compared  to 
international  competitors,  to a lack of investor protection and risks of greenwashing, 
and to differing national requirements and supervisory practices that are at odds with 
the  integrity  of  the  single  market.  Overall,  the  challenges  are  seen  to  limit  the 
effectiveness  of  Regulation  (EU)  2019/2088  in  exploiting  the  potential  of  the  single 
market  to  mobilise  and  allocate  private  finance  for  the  sustainable  prosperity  of  the 
Union.  

Regulation  (EU)  2019/2088  is  part  of  the  wider  sustainable  finance  framework, 
elements  of  which  are  undergoing  targeted  amendments  to  simplify,  streamline  and 
reduce  the  burden  of  sustainability-related  disclosures  and  requirements  on  Union 
undertakings. Those amendments should ensure a more cost-effective delivery of the 
overall ambition of the European Green Deal while not undermining its agreed policy 
objectives60.  As  part  of  that  wider  sustainable  finance  framework,  Regulation  (EU) 
2019/2088 should also be reviewed commensurately. That is why its revision has been 
included among the simplification initiatives of the Commission in the Mission Letter 

ESMA,  Guidelines  of  21  August  2024  on  funds  names  using  ESG  or  sustainability  related  terms, 
ESMA34-1592494965-657. 
Proposal  for  a  Directive  of  the  European  Parliament  and  of  the  Council  amending  Directives  (EU) 
2022/2464 and (EU) 2024/1760  of 26 February 2025  as regards the dates from which Member States 
are to apply certain corporate sustainability  reporting and due diligence requirements (COM(2025) 80 
final). 

(4) 

(5) 

59 

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to the Commissioner for Financial Services and the Savings and Investments Union61 
and in the 2025 Commission Work Programme62. The objectives of the revision are to 
overcome  the  shortcomings  associated  with  the  implementation  of  Regulation  (EU) 
2019/2088, to significantly simplify administrative burdens in a coherent way with the 
rest  of  the  Union  sustainable  finance  framework,  and  to  help  investors  efficiently 
understand and compare sustainability-related financial products. 

(6)  Within  that  context,  it  is  for  the  benefit  of  both  end-investors  and  financial  market 
participants to alleviate specific burdens flowing from Regulation (EU) 2019/2088 on 
financial market participants, and to formalise a comprehensive categorisation regime 
for financial products making sustainability-related claims. Those categories are to set 
up a clear system  according  to  which sustainability-related  financial  products should 
be clustered, in accordance with how those products claim to end-investors to pursue 
or achieve specific sustainability-related objectives or to integrate the consideration of 
specific  sustainability-related  factors.  To  harmonise 
implementation  and 
supervisory  practices  and  further  protect  end-investors  against  greenwashing  and 
misleading claims, those categories should rely on a clear set of criteria.  

the 

(7) 

(8) 

61 

62 

It is necessary to adjust the scope of Regulation (EU) 2019/2088 and to adjust certain 
definitions  therein  to  reflect  those  objectives.  Regulation  (EU)  2019/2088  should 
continue  to  require  financial  market  participants  to  disclose  how  they  consider 
sustainability risks affect the financial products they offer to investors. Beyond these 
elements,  Regulation  (EU)  2019/2088  should,  however,  focus  exclusively  on  the 
specific  requirements  and  associated  disclosures  applicable  to  financial  market 
participants  which  manufacture,  manage  or  make  available  sustainability-related 
financial  products,  particularly  those  that  reference  sustainability-related  elements  in 
their names or marketing documentation to end-investors. Financial advisers providing 
investment  advice  do  not  manufacture  or  manage  sustainability-related  financial 
products,  nor  do  they  make  such  products  available  to  investors.  For  that  reason, 
financial  advisors  providing  investment  advice  should  be  carved  out  of  the  scope  of 
Regulation  (EU)  2019/2088  altogether.  Their  role  is  rather  as  distributors  to  identify 
the products made available by financial market participants that match their clients’ 
sustainability  preferences.  The  rules  for  distributors  should  therefore  duly  reflect  the 
changes  introduced  by  this  Regulation,  especially  the  categorisation  regime  for 
financial  products  making  sustainability-related  claims.  The  same  applies  to  the 
service  of  portfolio  management,  consisting  of  managing  portfolios  of  financial 
instruments in accordance with mandates given by clients on a discretionary client-by-
client basis and which are thus not designed and marketed the same way as products 
identified for certain target markets.  

The  definition  in  Article  2,  point  (17),  of  Regulation  (EU)  2019/2088  of  sustainable 
investment  has  generated  a  considerable  number  of  practical  implementation 
challenges  and  concerns,  queries  to  supervisors  about  interpretation  and  their 
expectations, and wide divergence in practical application. Practitioners also perceive 
duplication and coherence issues with comparable concepts laid down elsewhere in the 

Mission  Letter  of  the  President  of  the  European  Commission of  17  September  2024,  ac06a896-2645-
4857-9958-467d2ce6f221_en. 
Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic and Social Committee and the Committee of the Regions of 11 February 2025, Commission 
work  programme  2025  Moving  forward  together:  A  Bolder,  Simpler,  Faster  Union,  (COM/2025/45 
final). 

EN 

18 

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sustainable finance framework but which have a slightly different meaning, including 
those laid down in Regulation (EU) 2020/852 of the European Parliament and of the 
Council63,  and  undue  constraints  for 
investments  targeting  the  transition  of 
undertakings  or  economic  activities  towards  sustainability  in  accordance  with  the 
policy outlined in the Commission Recommendation (EU) 2023/1435 in 202364. At the 
same time, the definition of sustainable investment  in  Regulation  (EU)  2019/2088  is 
used  by  financial  market  participants  in  the  design  of  financial  products  and  the 
communication  with  end-investors.  The  practical  application  of  the  term  should  thus 
be facilitated by deleting the definition of sustainable investment, thus overcoming the 
uncertainty  in  aligning  practices  with  it,  and  instead  embedding  the  underlying 
concepts in a simplified form in the concrete requirements for the associated category 
of  sustainability-related  financial  products.  That  would  ensure  continuity,  simplified 
application  and  improved  certainty  for  financial  market  participants.  Therefore,  the 
concepts of contribution to an environmental and social objective, of do not significant 
harm, and of good governance practices should continue to be reflected in the criteria 
of the relevant categories.  

To  encourage  investments  contributing  to  climate  change  mitigation  and  adaptation, 
the  sustainable  use  and  protection  of  water  and  marine  resources,  the  transition  to  a 
circular  economy,  to  pollution  prevention  and  control,  and  the  protection  and 
restoration of biodiversity and ecosystems, environmental objectives of sustainability 
related financial products should be defined according to Article 9 of Regulation (EU) 
2020/852.  Social  objectives  of  sustainability  related  financial  products  should  be 
understood as including the principles of the European Pillar of Social Rights65 and the 
Sustainable Development Goals.  

(9) 

(10)  The proposal for a Directive of the European Parliament and of the Council amending 
Directives  (EU)  2022/2464  and  (EU)  2024/176066  aims  at  an  overall  simplification 
and burden-reduction of sustainability disclosures and, focus their requirements on the 
largest  companies.  That  same  aim  justifies  focussing  the  scope  of  Regulation  (EU) 
2019/2088  on  sustainability-related  financial  products  and  on  the  financial  market 
participants which manufacture, manage or make those products available to investors. 
In addition, Directive (EU) 2022/2464 already sets horizontal entity level disclosures 
of  sustainability  information  covering  all  sectors.  Therefore,  the  deletion  of  the 
specific  requirements  for  financial  market  participants  to  make  disclosures  on  their 
consideration of adverse impacts in their investment decisions at the level of the entity 
ensures  no    duplication  in  disclosure  requirements  for  entities  also  in  scope  of 
Directive (EU) 2022/2464. 

(11)  Financial  market  participants  should  not  be  prohibited  from  referring  to  information 
on sustainability aspects of an ancillary nature in the regulatory disclosures related to 
financial products  even if not categorised as sustainability-related  financial  products. 
Such  information  should  be  fair,  clear  and  not  misleading.  However,  to  protect 

63 

64 

65  
66 

Regulation  (EU)  2020/852  of  the  European  Parliament  and  of  the  Council  of  18  June  2020  on  the 
establishment  of  a  framework  to  facilitate  sustainable  investment,  and  amending  Regulation  (EU) 
2019/2088 (OJ L 198, 22.6.2020, pp. 13, ELI: http://data.europa.eu/eli/reg/2020/852/oj). 
Commission Recommendation (EU) 2023/1425 of 27 June 2023 on facilitating finance for the transition 
to a sustainable economy (C/2023/3844) (OJ L 174, 7.7.2023, p. 19.). 
The European Pillar of Social Rights in 20 principles - Employment, Social Affairs and Inclusion. 
Proposal  for  a  Directive  of  the  European  Parliament  and  of  the  Council  amending  Directives  (EU) 
2022/2464  and  (EU)  2024/1760  as  regards  the  dates  from  which  Member  States  are  to  apply  certain 
corporate sustainability reporting and due diligence requirements (COM/2025/80 final). 

EN 

19 

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investors  and  distinguish  clearly  between  non-categorised  and  categorised  financial 
products,  such  information  should  not  constitute  a  prominent  element  in  those 
disclosures and should not feature in the name or marketing communications of such 
financial  products.  In  addition,  for  financial  products  that  are  categorised  as 
sustainability-related  financial  products,  financial  market  participants  should  ensure 
that  the  claims  in  the  regulatory,  marketing  documentations  and  names  of  their 
sustainability-related financial products  are consistent  with  the category under which 
they fall and their strategies. 

(12)  Building on the feedback received during the targeted and open public consultations, 
the  technical  workshops  and  roundtables,  the  Commission  expert  group’  reports  and 
the call for evidence, as well as evidence of investor preferences in diverse consumer 
studies,  there  is  a  need  to  set  up  EU  categories  for  products  making  sustainability-
related  claims.  Such  categories  are  called  for  to  address  the  current  misuse  of  the 
Article  8  and  9  disclosures  and  to  harmonise  at  EU  level  the  implementation  and 
supervisory  practices  for  products  making  sustainability-related  claims.  Such 
categories  should  rely  on  clear  criteria  to  combat  greenwashing,  facilitate  end-
investors  understanding  of  products’  sustainability-related  strategies  and  objectives, 
and  allow  for  an  efficient  distribution  system  based  on  investors’  sustainability 
preferences.  Feedback  favours  the  creation  of  three  categories  which  should  be 
distinguished in terms of their claims. The sustainable category should cover products 
claiming  to  invest  in  companies,  assets,  activities  or  projects  that  are  already 
sustainable or pursue a particular objective related to sustainability factors, including 
environmental  or  social  objectives.  The  transition  category  should  cover  products 
claiming to invest in companies, assets, activities or projects that are on a credible path 
to  sustainability  or  that  pursue  particular  environmental  or  social  transition-related 
objectives. The ESG basics category should cover products claiming to integrate other 
sustainability  considerations  beyond  sustainability  risks  in  their  investment  strategy. 
This  approach  would  also  be  consistent  with  recent  regulatory  guidance  by  the 
European Securities and Markets Authority67. These claims by financial products  are 
consistent  with  the  notion  of  ‘environmental  claims’  under  Directive  2005/29/EC68 
(Unfair  Commercial  Practices  Directive,  as  amended  by  Directive  (EU)  2024/825  as 
regards empowering consumers for the green transition69). Consistent with Article 3(4) 
of  Directive  2005/29/EC,  requirements  under  that  Directive  are  met  by  proper 
application of the requirements of this Regulation.  

(13)  Such categories should help distributors identify the products that match their clients’ 
sustainability  preferences  and  perform  their  target  market  assessment  and  should 
therefore be reflected in the rules applicable under Commission Delegated Regulation 

67 

68 

69 

ESMA,  Guidelines  of  21  August  2024  on  funds  names  using  ESG  or  sustainability  related  terms, 
ESMA34-1592494965-657. 
Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair 
business-to-consumer  commercial  practices  in  the  internal  market  and  amending  Council  Directive 
84/450/EEC,  Directives  97/7/EC,  98/27/EC  and  2002/65/EC  of  the  European  Parliament  and  of  the 
Council  and  Regulation  (EC)  No  2006/2004  of  the  European  Parliament  and  of  the  Council  (‘Unfair 
Commercial Practices Directive’) (OJ L 149, 11.6.2005, ELI: http://data.europa.eu/eli/dir/2005/29/oj)  
Directive (EU) 2024/825 of the European Parliament and of the Council of 28 February 2024 amending 
Directives  2005/29/EC  and  2011/83/EU  as  regards  empowering  consumers  for  the  green  transition 
through  better  protection  against  unfair  practices  and  through  better  information  (OJ  L,  2024/825, 
6.3.2024, ELI: http://data.europa.eu/eli/dir/2024/825/oj) 

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(EU) 2017/56570, Commission Delegated Directive (EU) 2017/59371, and Commission 
Delegated Regulations (EU)  2017/235872 and (EU) 2017/235973. This would provide 
end-investors  with  a  clear  understanding  of  the  main  features  and  ambitions  of 
sustainability-related products. 

(14)  To help comparability and boost integrity, a minimum portion of 70% of investments 
by  financial  products  in  each  category  should  be  made  in  accordance  with  the 
sustainability-related  claim,  i.e.  the  objective  that  is  pursued  or  the  sustainability-
related considerations that are applied. Financial market participants should be allowed 
to  freely  allocate  the  remaining  investments  based  on  diversification,  hedging  or 
liquidity needs. These remaining investments should not contradict the sustainability-
related  claims  of  the  financial  product.  The  full  implementation  of  an  investment 
strategy for a given financial product can take a certain period of time, especially for 
alternative  or  private  assets.  That  period  of  time  is  communicated  in  pre-contractual 
documents.  The  percentage  of  investments  necessary  to  meet  the  objectives  of  the 
product may not be immediately reached during that phase-in period. The percentage 
should be attained at the latest at the expiry of the phase-in period. The 70% threshold 
would  mean  an  increase  in  ambition  compared  to  the  50%  minimum  portion  of 
‘sustainable investment’ required for funds using a sustainability-related term in their 
names under the ESMA guidelines on funds’ names. It is also considered to allow for 
continuity  with  the  rule  of  having  80%  of  investments  made  in  accordance  with  the 
ESG  claim  pursued  with  the  fund  name  under  those  guidelines,  considering  that  the 
conditions  for  the  70%  threshold  would  be  stricter  than  the  current  80%  under  the 
ESMA guidelines (i.e. new conditions for investments to be deemed as contributing to 
a  sustainability  or  transition  related  objectives  or  as  integrating  sustainability-related 
considerations). Finally, it allows for sufficient margin for hedging investments, and is 
aligned with other international investment labels, which would facilitate international 
convergence. To guide financial market participants and provide them with certainty, 
specific  investment  approaches  for  financial  products  should  be  identified  per 
category,  but  without  excluding  other  possible  approaches  in  each  case  under  the 
condition  that  these  provide  for  the  same  level  of  sustainability-related  ambition. 
Findings  from  recent  evaluations  show  that  there  is  no  ‘one  size  fits  all’  on  how  to 
granularly  specify  what  a  positive  contribution  to  a  sustainability  objective  or 
transition  should  be.  That  is  mainly  due  to  the  wide  variety  of  assets,  strategies, 
sustainability  objectives  or  factors  that  exist  in  the  current  market.  A  closed  list  of 

70 

71 

72 

73 

Commission  Delegated  Regulation  (EU)  2017/565  of  25  April  2016  supplementing  Directive 
2014/65/EU of the European Parliament and of the Council as regards organisational requirements and 
operating conditions for investment firms and defined terms for the purposes of that Directive (OJ L 87, 
31.3.2017, ELI: http://data.europa.eu/eli/reg_del/2017/565/oj)  
Commission  Delegated  Regulation  (EU)  2017/593  of  7  April  2016  supplementing  Directive 
2014/65/EU  of  the  European  Parliament  and  of  the  Council  with  regard  to  safeguarding  of  financial 
instruments and funds belonging to clients, product governance obligations and the rules applicable to 
the  provision  or  reception of fees,  commissions  or  any  monetary  or  non-monetary  benefits  (OJ  L  87, 
31.3.2017, ELI: http://data.europa.eu/eli/dir_del/2017/593/oj) 
Commission  Delegated  Regulation  (EU)  2017/2358  of  21  September  2017  supplementing  Directive 
(EU)  2016/97  of  the  European  Parliament  and  of  the  Council  with  regard  to  product  oversight  and 
governance requirements for insurance undertakings and insurance distributors (OJ L 341, 20.12.2017, 
ELI: http://data.europa.eu/eli/reg_del/2017/2358/oj)  
Commission  Delegated  Regulation  (EU)  2017/2359  of  21  September  2017  supplementing  Directive 
(EU) 2016/97 of the European Parliament and of the Council with regard to information requirements 
and conduct of business rules applicable to the distribution of insurance-based investment products (OJ 
L 341, 20.12.2017, ELI: http://data.europa.eu/eli/reg_del/2017/2359/oj)  

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21 

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granular criteria for  contribution  would therefore  restrict the investment  universe too 
much and risk hindering innovative practices. Instead, the list of possible approaches 
should aim at identifying robust existing sustainability standards and encouraging their 
use.  The  70%  threshold  should  focus  on  ensuring  harmonised  levels  of  contribution 
rather than granularly specify the nature of the contribution for each category. Specific 
disclosures on the chosen approach to  contribution should be given to  end-investors. 
Financial market  participants  should  measure their contribution, the compliance with 
the strategy and the progress towards the sustainability objective, through appropriate 
sustainability-related  indicators  and  disclose  those  indicators.  A  list  of  voluntary 
indicators  should  be  developed  for  this  purpose.  Such  indicators  should  build  on  the 
indicators  referred  to  in  Annex  I  of  Commission  Delegated  Regulation  (EU) 
2022/1288  and  Commission  Delegated  Regulation  (EU)  2023/2772,  and  on 
information  disclosed  by  companies,  ensuring,  to  the  extent  appropriate,  continuity 
with  current  market  practices  under  this  Regulation.  This  would  encourage 
harmonisation and comparability in the way financial market participants measure and 
disclose their contribution to an objective. 

(15)  The criteria for these categories should also simplify the way financial products today 
using  the  sustainable  investment  definition  are  required  to  manage  principal  adverse 
impacts  on  environmental  or  social  objectives.  The  current  approach  mandates 
financial  market  participants  to  consider  the  principal  adverse  impact  indicators  on 
sustainability  factors,  currently  set  out  in  Commission  Delegated  Regulation  (EU) 
2022/128874.  Stakeholders’  feedback  highlights  that  this  approach  has  not  led  to  a 
robust or comparable mechanism to ensure no harm.  Therefore, the current approach 
should be replaced by mandating financial market participants to apply a common set 
of clear  exclusions  covering  practices  and  sectors which  are commonly  agreed to  be 
most  harmful  and  to  identify  and  disclose  the  principal  adverse  impacts  of  their 
investments  on  sustainability  factors.  These  should  include,  where  relevant,  adverse 
impacts  on  climate  change  mitigation  and  climate  change  adaptation,  the  sustainable 
use and protection of water and marine resources, the transition to a circular economy, 
pollution prevention and control, and the protection and restoration of biodiversity and 
ecosystems.  Financial  market  participants  should  also  disclose  any  actions  taken  to 
address  the  identified  principal  adverse  impacts.  In  the  specific  context  of  this 
framework,  this  would  ensure  a  comparable  and  clear  approach  to  ensure  no  harm. 
Such approach has been considered successful and effective under the implementation 
of  Commission  Delegated  Regulation  (EU)  2020/1818.  Such  exclusions  should  also 
ensure,  to  the  extent  possible,  continuity  with  the  existing  regulatory  framework, 
including  with  the  exclusions  laid  down  in  Commission  Delegated  Regulation  (EU) 
2020/1818 and in the ESMA guidelines on funds names and also rely on data available 
from investee companies or data that can be reasonably estimated by financial market 
participants.  Such  exclusions  should  reflect  politically  agreed  environmental  and 
social goals.  

74 

Commission  Delegated  Regulation  (EU)  2022/1288  of  6  April  2022  supplementing  Regulation  (EU) 
2019/2088 of the European Parliament and of the Council with regard to regulatory technical standards 
specifying the details of the content and presentation of the information in relation to the principle of 
‘do  no  significant  harm’,  specifying  the  content,  methodologies  and  presentation  of  information  in 
relation to sustainability indicators and adverse sustainability impacts, and the content and presentation 
of the information in relation to the promotion of environmental or social characteristics and sustainable 
investment  objectives  in  pre-contractual  documents,  on  websites  and  in  periodic  reports  (OJ  L  332, 
27.12.2022, p. 1, ELI: http://data.europa.eu/eli/reg_del/2022/1288/oj). 

EN 

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(16)  The  transition  category  should  consist  of  financial  products  that  aim  to  support  the 
transition of undertakings, economic activities and other assets towards sustainability, 
or  contribute  to  such  transition.  This  category  aims  at  providing  such  products  with 
disclosures  and  criteria  which  accurately  reflect  transition  strategies  and  address  the 
current  implementation  challenges  arising  from  the  lack  of  recognition  of  transition 
finance  in  the  definition  of  sustainable  investment  in  Article  2,  point  (17),  of 
Regulation (EU) 2019/2088. Such challenges include difficulties for financial market 
participants  wanting  to  pursue  and  disclose  transition-related  strategies  as  well  as 
confusion and lack of appropriate disclosures for end-investors interested in investing 
in  products  with  transitional  objective.  This  category  should  therefore  bolster  the 
visibility,  transparency  and  integrity  of  financial  products  which  invest  in  the 
transition  of  undertakings,  economic  activities,  or  other  assets  towards  better 
environmental or social performance, or that contribute to the environmental or social 
transition. This category should therefore capture financial products with a high level 
of  transition  ambition,  selecting  notably  investments  based  on  proven  standards  and 
tools,  including  centred  on  strategies  tracking  or  replicating  EU  Climate  Transition 
benchmarks  (CTB)  or  EU  Paris-aligned  benchmarks  (PAB)  in  accordance  with 
Regulation  (EU)  2016/1011  of  the  European  Parliament  and  of  the  Council75,  on 
investing in  transitional economic activities or in  undertakings investing their capital 
expenditures  in  accordance  with  Regulation  (EU)  2020/852,  or  on  investing  in 
undertakings  or  economic  activities  that  commit  to  future  improvements  through 
credible  transition  plans  or  science-based  targets.  This  category  should  also  capture 
financial products with a transition-related performance set at the level of the portfolio, 
such  as  reducing  portfolio  financed  emission  over  time,  under  the  condition  that  the 
underlying  investments  are  coherent  with  the  transition-related  objective  of  the 
products.  To  ensure  a  meaningful  contribution  to  the  international  and  European 
climate goals,  financial  products  which pursue  a climate change mitigation objective 
should align their ambition with that in the Paris Agreement and in Regulation (EU) 
2021/1119,  in  particular  for  financial  market  participants  relying  on  transition  plans 
and  science-based  targets  from  companies  or  projects,  or  when  pursuing  a 
sustainability-related  engagement  strategy  with  investee  companies.  This  category 
should  also  exclude  activities  which  are  commonly  agreed  to  be  harmful  to  the 
environment and society, while giving investors the possibility to invest in companies 
at  different  starting  points  in  their  transition  efforts.  These  exclusions  should  ensure 
sufficient  alignment  with  the  ones  defined  under  the  EU  Climate  Benchmarks  and 
introduced  by the ESMA guidelines on funds names for all funds using certain  ESG 
terms in their names, including ‘transition’-related terms. They should cover activities 
related  to  prohibited  weapons  as  defined  in  the  upcoming  amendment  to  Regulation 
(EU) 2020/181876, the cultivation and production of tobacco, violations of the United 
Nations  Global  Compact  (UNGC)  principles  or  the  Organisation  for  Economic 
Cooperation  and  Development  (OECD)  Guidelines  for  Multinational  Enterprises 
(OECD  MNEs),  and  hard  coal  and  lignite.  This  category  should  also  exclude 
companies  developing  new  projects  linked  to  oil  or  gaseous  fuels,  and  companies 

75 

Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices 
used as benchmarks in financial instruments and financial contracts or to measure the performance of 
investment  funds  and  amending  Directives  2008/48/EC  and  2014/17/EU  and  Regulation  (EU)  No 
596/2014 (OJ L 171, 29.6.2016, p. 1, ELI: http://data.europa.eu/eli/reg/2016/1011/oj). 

76  COMMISSION  DELEGATED  REGULATION  (EU)  …/...  amending  Delegated  Regulation  (EU) 
2020/1818 as regards the definition of prohibited weapons C(2025)3801 Delegated act details - Register 
of delegated acts 

EN 

23 

  EN 

 
developing new projects, or without a plan to phase-out from, hard coal or lignite for 
power  generation.  Moreover,  like  products  falling  under  the  sustainable  category, 
products falling under the transition category should identify and disclose the principal 
adverse impacts of their investments on sustainability factors, and explain any actions 
taken to address those impacts. 

(17)  The ESG basics category should consist of financial products the strategy or design of 
which  is  based  on  selected  sustainability  factors.  Feedback  received  during  the 
targeted and open public consultations, the technical  workshops  and roundtables, the 
Commission  expert  group’  reports  and  the  call  for  evidence,  as  well  as  evidence  of 
investor preferences in diverse consumer studies, highlights the need to cater for such 
financial  products  to  allow  for  innovative  sustainability  approaches  and  for  end-
investor  preferences  which  include  products  avoiding  harmful  investments.  The 
criteria should cater for investments which do not specifically pursue a sustainability 
or  transition  related  objective  but  integrate  sustainability  factors  in  their  investment 
strategies  through  credible  sustainability-related  approaches.  The  criteria  should  list 
several approaches  which could  be adopted by  financial market  participants,  such as 
outperformance of the investment  universe of reference benchmarks  measured by  an 
ESG  rating  or  a  sustainability  indicator,  a  combination  of  sustainable  or  transition 
standards, as well as investments that favour undertakings or economic activities with 
a  proven  positive  track  record  on  certain  sustainability  factors.  This  category  should 
also exclude activities which are commonly agreed to be harmful to the  environment 
and society in alignment with the ones defined under the EU Climate Benchmarks and 
introduced  by  the  ESMA  guidelines  on  funds  names  for  all  funds  using  ESG  terms, 
but ‘sustainability-related terms or ‘impact’-related ones. They should cover activities 
related  to  prohibited  weapons  as  defined  in  the  upcoming  amendment  to  Regulation 
(EU)  2020/1818,  the  cultivation  and  production  of  tobacco,  violations  of  the  UNGC 
principles or OECD MNEs, and hard coal and lignite. 

(18)  The sustainable category should consist of financial products that invest in companies, 
assets  or  activities  that  are  sustainable  or  that  pursue  or  positively  contribute  to 
environmental  and  /  or  social  objectives.  This  category  should  capture  financial 
products  with  a  high  level  of  ambition  in  that  regard,  selecting  notably  investments 
based  on  proven  standards  and  tools,  including  centred  on  strategies  replicating  or 
managed  in  reference  to  an  EU  Paris-aligned  benchmarks  in  accordance  with 
Regulation  (EU)  2016/1011  of  the  European  Parliament  and  of  the  Council77,  on 
investing  in  sustainable  economic  activities  in  accordance  with  Regulation  (EU) 
2020/852,  on  investing  in  instruments  issued  in  accordance  with  Regulation  (EU) 
2023/2631  of  the  European  Parliament  and  of  the  Council78,  and  on  investments  in 
relation  to  operations  benefiting  from  a  Union  budgetary  guarantee  or  financial 
instruments  under  Union  programmes  pursuing  environmental  or  social  objectives. 
Accordingly,  the  exclusions  for  financial  products  in  this  category  should  extend 
beyond  those  for  the  other  two  categories  and  encompass  activities  where  the  value 

77 

78 

Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices 
used as benchmarks in financial instruments and financial contracts or to measure the performance of 
investment  funds  and  amending  Directives  2008/48/EC  and  2014/17/EU  and  Regulation  (EU)  No 
596/2014 (OJ L 171, 29.6.2016, p. 1, ELI: http://data.europa.eu/eli/reg/2016/1011/oj). 
Regulation (EU) 2023/2631 of the European Parliament and of the Council of 22 November 2023 on 
European Green Bonds and optional disclosures for bonds marketed as environmentally sustainable and 
30.11.2023, 
for 
ELI: http://data.europa.eu/eli/reg/2023/2631/oj). 

sustainability-linked 

2023/2631, 

bonds 

(OJ 

L, 

EN 

24 

  EN 

 
chain  is  associated  with  fossil  fuels,  including  the  expansion  of  fossil  fuels.  In 
particular,  the  exclusions  should  include  the  ones  of  the  transition  and  ESG  basics 
category,  in  addition  to  activities  linked  to  oil  fuels,  gaseous  fuels,  electricity 
generation  with  a  GHG  intensity  of  more  than  100  g  CO2  e/kWh.  This  category 
should also exclude companies developing new projects linked to oil or gaseous fuels, 
and  companies  developing  new  projects,  or  without  a  plan  to  phase-out  from,  hard 
coal  or  lignite  for  power  generation.  Moreover,  beyond  these  exclusions,  products 
falling  under  the  sustainable  category  should  identify  and  disclose  the  principal 
adverse impacts of their investments on sustainability factors, and explain any actions 
taken  to  address  those  impacts.  This  requirement  would  complement  the  common 
binary exclusions and ensure that any other principal adverse impacts on sustainability 
factors  are  identified,  disclosed,  and  potentially  addressed.  It  would  bring  accurate 
transparency  on  adverse  impacts,  therefore  allowing  end-investors  to  understand  the 
potential  harm  of  such  products,  while  bringing  more  legal  clarity  on  the  required 
obligation to financial market participants than the current principle of ‘consideration’ 
of  principal  adverse  impact  indicators.  Indicators  should  be  developed  that  build  on 
the current principal adverse impact indicators referred to in Annex I to Commission 
Delegated  Regulation  (EU)  2022/1888  and  Commission  Delegated  Regulation  (EU) 
2023/2772 for voluntary use by financial market participants when complying with the 
identification and disclosure of principal adverse impacts. However, financial market 
participants  should  have  the  flexibility  to  disclose  these  principal  adverse  impacts 
using a different approach, such as different indicators or a qualitative explanation of 
such  impacts  and  actions,  if  it  fits  better  the  nature  of  the  impact  identified  or 
addressed. This flexibility on how to identify the impacts should allow them to focus 
on the impacts which are actually relevant for their products depending on the assets, 
strategies  and  objectives  pursued.  This  requirement  would  align  to  a  certain  degree 
with  existing  criteria  in  other  international  frameworks  while  ensuring  that  the  EU 
rules remain more ambitious including through the implementation of common binary 
exclusions. 

(19)  To encourage the use of well-established EU standards, the sustainable and transition 
category  should  provide  for  appropriate  treatment  and  legal  certainty  for  products 
relying on the EU Taxonomy and the EU Climate Benchmarks. Products replicating or 
managed  in  reference  to  an  EU  Paris-aligned  benchmark  should  be  considered  as 
products qualifying under the sustainable and transition category. Similarly, products 
replicating or managed in reference to an EU Climate Transition benchmark should be 
considered as products qualifying under the transition category.  In addition, products 
with  a proportion  of  Taxonomy-aligned investment  equal  or higher than 15% should 
be considered products complying with the contribution criteria of the sustainable and 
transition category. The latter would still need to apply the exclusions mandated under 
the  category  they  wish  to  comply  with  on  the  portion  of  the  portfolio  that  is  not 
aligned with the EU Taxonomy. Based on the opinion of the Platform for Sustainable 
Finance, the 15% threshold provides for sufficient incentive for products to aim for an 
ambition portion of investment in Taxonomy-aligned economic activities while being 
aligned with the current state of the market. More specifically, this threshold should be 
attainable by about half of the current investment funds disclosing under Article 9 of 
Regulation  (EU)  2019/2088.  The  threshold  should  be  subject  to  review  36  months 
after  the  date  of  application  to  continue  to  align  it  with  the  state  of  the  broader 
economy  and  reflect  any development  under the  EU Taxonomy  in  order  to  ensure it 
provides the right  incentive. These provisions aim  at  simplifying the implementation 
of the categories, enhancing the coherence of the EU sustainable finance framework, 

EN 

25 

  EN 

and  encouraging  the  use  of  these  EU  labels  and  standards  by  providing  certainty  to 
their users. 

(20)  Within the categories of products with sustainability and transition-related objectives, 
recognition  should  be  given  to  the  practice  of  impact  investing.  Acknowledging  the 
specific  characteristics  of  impact  investing,  including  the  objective  of  intentionality 
and targeting measurable change in specific pre-defined environmental or social areas 
with an upfront theory of change and with reporting on the outcomes, helps to promote 
the contribution which impact investing can make to addressing various environmental 
and social needs. Specific disclosures should therefore apply to financial products that 
are  categorised  as  sustainability-related  financial  products  with  sustainability  or 
transition-related  objectives  and  that  pursue  specific  impacts  as  understood  for  these 
types of investment practices. The use of the term ‘impact’ in the names of financial 
products should be restricted accordingly. 

(21)  Pre-contractual and periodic disclosures for financial products that are categorised as 
sustainability-related  product  should  contain  all  relevant  information  about  the 
objective, strategy, and investment  approaches to comply with  the 70% requirement, 
chosen indicators for measuring performance, compliance with applicable exclusions, 
and relevant data sources used to inform the design, compliance and measurement of 
the  criteria  applicable  to  the  financial  product.  Financial  products  falling  under  the 
sustainable  and  transition  category  that  pursue  an  environmental  objective  should 
disclose whether and the extent to  which  they use the EU Taxonomy  as one of their 
investment approaches, to meet the 70% requirement. This disclosure requirement on 
the  use  of  the  EU  Taxonomy  will  enhance  comparability  across  financial  products 
with environmental objectives. In addition, disclosures on any ESG ratings included in 
market  documentations  of  sustainability-related  products  should  be  included  in 
websites  disclosures,  as  per  requirements  under  Regulation  (EU)  2024/3005.  These 
disclosures  should  allow  end-investors  to  understand  the  specific  characteristics  of 
each  sustainability-related  financial  products,  compare  them  and  understand  whether 
they  fit  their  sustainability  preferences,  and  facilitate  the  provision  of  financial  and 
insurance advice. 

(22)  There  are  currently  no  comprehensive  metrics  for  gauging  the  sustainability  of 
general-purpose  sovereign,  sub-sovereign  and  supranational  debt 
issuances. 
Investments  in  such  debt  issuances  should  therefore  be  excluded  from  counting 
towards  the  contribution  of  financial  products  to  sustainability  or  transition  related 
objectives.  Without affecting the treatment or inclusion of those debt issuances among 
investments  by  financial  products  in  general,  investments  in  such  debt  issuances 
should be excluded from qualifying for the numerator of the portion of investment that 
needs  to  be  reached  by  financial  products  that  are  categorised  under  the  sustainable 
and transition categories. However, financial market participants should be allowed to 
include those debt issuances in the numerator of financial products that are categorised 
under the ESG basics category, using available methodologies that are appropriate to 
assess the sustainability of those investments for that purpose. Further, the exclusions 
regarding investments which financial products that are categorised as sustainability-
related  financial  products  cannot  make,  apply  to  companies,  and  not  to  sovereigns, 
sub-sovereigns  and  supra-nationals.  Those  exclusions  therefore  do  not  restrict 
investments  in  debt  issuances  by  sovereigns,  sub-sovereigns  and  supra-nationals, 
which  can  thus  feature  in  the  denominator  of  those  financial  products,  including 
notably debt issuances by Union Member States, Union-level bodies and other public 
sector bodies not subject to any applicable Union-level financial sanctions. In contrast, 

EN 

26 

  EN 

investments  in  financial  instruments  issued by sovereigns,  sub-sovereigns and supra-
nationals,  where  the  use  of  proceeds  is  known,  where  those  instruments  support 
specific  sustainability  aims,  and  provided  that  those  financial  instruments  do  not 
directly  or  indirectly  fund  activities  that  are  excluded  from  investments  by  financial 
products  that  are  categorised  as  sustainability-related  financial  products,  can  be 
included  in  the  numerator  of  all  categorised  financial  products.  This  balanced 
approach  should  allow  sustainability-related  financial  products  to  continue  to  fund 
public  projects  and  activities  related  to  sustainability,  while  providing  safeguards  to 
potential  greenwashing  risks.  Financial  market  participants  should  ensure  that 
investments in public sector debt by categorised financial products are consistent with 
the  stated  sustainability-related  objective  or  strategy  of  those  products  to  avoid 
greenwashing risks and be aligned with end-investors’ expectations. 

(23)  The  creation  of  categories  for  sustainability-related  financial  products  requires 
provisions  that  determine  how  products  that  are  exposed  to  categorised  products 
should assess their eligibility  to a category and if they do not qualify for a category, 
how  such  non-categorised  financial  products  which  invest  in  categorised  financial 
products  should  disclose  information  about  those  investments.  In  order  to  assess  the 
eligibility  to  a  category,  financial  market  participants  should  be  able  to  rely  on  the 
information disclosed regarding categorised financial products and combine it with the 
information  on  their other  investments. In  cases  where  a financial market participant 
uses the services of an entity regulated to provide portfolio management services, the 
financial market participant should be able to rely on the information provided by this 
entity which can be mandated to invest in accordance with the criteria for categorised 
products  by  its  client.  In  case  where  investments  of  those  products  in  categorised 
products reach the 70% threshold for their portfolio, and where compliance with other 
criteria, notably exclusion criteria, is also ensured, these products could be considered 
to  qualify  as  categorised  products  themselves.  This  assessment  should  build  on 
information  on  the  underlying  categorised  products  (e.g.   either  the  minimum 
investment  required  for  categorised  products  under  this  Regulation,  or  the  actual 
investment if available) and information disclosed by portfolio managers. Provided the 
appropriate exclusions are met in each case, only products that meet the 70% threshold 
by  investing  solely  in  sustainable  products  could  be  considered  sustainable,  while 
those  investing  across  categories  would  fall  either  within  the  transition  (if  mixing 
sustainable or transition products) or ESG basics (if mixing products from any of the 
three).   For  financial  products  that  do  not  qualify  for  a  category  but  invest  in 
categorised  financial  products,  in  order  to  ensure  comparability,  disclosures  should 
include how much these financial products have invested in financial products that are 
categorised  as  sustainability-related  financial  products,  as  well  as  in  portfolios 
managed  for  clients  on  a  discretionary  basis  in  accordance  with  the  criteria  for 
categorised  products,  and  how  much  in  non-categorised  products.  For  this  purpose, 
financial  market  participants  should  be  able  to  rely  on  the  information  disclosed 
regarding  categorised  financial  products  as  well  as  the  information  disclosed  by  the 
authorised  entity  in  change  or  providing  the  service  of  portfolio  management.  That 
should  help  financial  market  participants  managing,  manufacturing  or  making 
available  such  products  inform  their  clients  on  the  sustainability-related  elements  of 
these  products  in  a  more  harmonised  way,  while  allowing  them  to  rely  on  the 
information  provided  for  the  underlying  categorised  products  and  without  requiring 
them  to  separately  verify  this  information.  Those  non-categorised  products  should 
however not be able to use sustainability-related terms in their names, that are reserved 
for categorised products, but should be able to include sustainability-related claims in 

EN 

27 

  EN 

their marketing communications, provided they are clear, fair and not misleading, and 
accurately reflect the information they disclose on the relative shares of investments in 
categorised products and in other assets.  

(24)  The  wide  range  of  potential  investable  assets  for  financial  products  that  can  be 
categorised as sustainability-related financial products means that there will continue 
to be certain data gaps in relation to sustainability data from investees and other assets. 
It  is  therefore  appropriate  to  formalise  and  improve  transparency  about  the  use  of 
estimates  by  financial  market  participants,  without  however 
imposing  new 
requirements on third party sustainability data providers. Notably, proportionate steps 
should be introduced whereby financial market participants are to document their use 
of data sources and their use of external and in-house estimates and are to provide their 
clients with information on such use upon request. 

(25)  To  help  promote  the  functioning  of  the  single  market  for  sustainability-related 
financial products, as part of deeper and more integrated financial markets to mobilise 
savings  and 
in  support  of  competitiveness, 
the  Union 
environmental  and  social  objectives,  Member  States  and  national  competent 
authorities should not set or apply additional requirements as regards the consideration 
and  disclosures  of  sustainability  risks,  or  as  regards  the  criteria,  procedures,  and 
disclosures concerning the categorisation of sustainability-related financial products. 

investments  across 

(26)  Where existing financial products are closed to new investors and would no longer be 
offered  to  investors  after  the  date  of  application  of  this  Regulation,  for  reasons  of 
proportionality  financial  market  participants  should  be  able  opt  out  of  applying  this 
Regulation to those financial products.  

(27)  The  power  to  adopt  acts  in  accordance  with  Article  290  of  the  Treaty  on  the 
Functioning of the European Union should be delegated to the Commission  to allow 
for the specification of the conditions for investments to contribute to given transition-
related or sustainability-related objectives or to integrate sustainability factors for the 
categorisation  of  financial  products  as  sustainability-related  products,  and  disclosure 
templates  for  such  financial  products.  It  is  of  particular  importance  that  the 
Commission  carries  out  appropriate  consultations  during  its  preparatory  work, 
including with the European Supervisory Authorities established by Regulation (EU) 
No 1093/2010  of  the  European  Parliament  and  of  the  Council79,  Regulation  (EU) 
No 1094/2010 of the European Parliament and of the Council80, and Regulation (EU) 
No 1095/2010 of the European Parliament and of the Council81, and with the Member 
States  Expert  Group  on  sustainable  finance,  where  appropriate.  The  European 
Supervisory  Authorities  should  also  support 
in  conducting 
appropriate testing of consumers and investors to inform how product distributors best 

the  Commission 

79 

80 

81 

Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010 
establishing a European Supervisory Authority (European Banking Authority), amending Decision No 
716/2009/EC  and  repealing  Commission  Decision  2009/78/EC  (OJ  L  331,  15.12.2010,  p.  12, 
ELI: http://data.europa.eu/eli/reg/2010/1093/oj). 
Regulation (EU) No 1094/2010 of the European Parliament and of the Council of 24 November 2010 
establishing  a  European  Supervisory  Authority  (European  Insurance  and  Occupational  Pensions 
Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/79/EC (OJ 
L 331, 15.12.2010, p. 48, ELI: http://data.europa.eu/eli/reg/2010/1094/oj). 
Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 
establishing a European Supervisory Authority (European Securities and Markets Authority), amending 
Decision  No  716/2009/EC  and  repealing  Commission  Decision  2009/77/EC  (OJ  L  331,  15.12.2010, 
p. 84, ELI: http://data.europa.eu/eli/reg/2010/1095/oj). 

EN 

28 

  EN 

 
identify the products that match clients’ sustainability preferences under Commission 
Delegated  Regulation  (EU)  2017/565,  Commission  Delegated  Directive  (EU) 
2017/593, Commission Delegated Regulations (EU) 2017/2358 and (EU) 2017/2359, 
based  on  the  categorisation,  and  ensure  that  associated  investor-facing  details  are 
easily  understandable  in  all  official  languages  of  the  Union.  Those  consultations 
the 
should  be  conducted 
Interinstitutional Agreement of 13 April 2016 on Better Law-Making82. In particular, 
to  ensure  equal  participation  in  the  preparation  of  delegated  acts,  the  European 
Parliament and the Council should receive all documents at the same time as Member 
States’  experts,  and  their  experts  should  systematically  have  access  to  meetings  of 
Commission expert groups dealing with the preparation of delegated acts. 

in  accordance  with 

the  principles 

laid  down 

in 

(28) 

In  order  to  ensure  unform  conditions  for  the  implementation  of  Regulation  (EU) 
2019/2088 as amended by this Regulation, implementing powers should be conferred 
on the Commission. Those powers should be exercised in accordance with Regulation 
(EU) No 182/2011 of the European Parliament and of the Council83 

(29)  The  amendments  to  Regulation  (EU)  2019/2088  should  be  reflected  in  Regulation 
(EU)  No  1286/2014  of  the  European  Parliament  and  of  the  Council  84.  Notably,  the 
key information document accompanying products categorised under Regulation (EU) 
2019/2088, as amended, should contain information on the category, a description of 
its objective, and relevant indicators.  

(30)  This  Regulation  adapts  information  requirements  related  to  the  degree  to  which 
financial  products  invest  in  sustainability-related  activities,  including  activities  that 
contribute  to  an  environmental  objective  as  set  out  in  Article  9  of  Regulation  (EU) 
2020/852, in light of the revised scope and subject matter. Given that the definition of 
the term ‘sustainable investment’ should be deleted and given the changes introduced 
by this Regulation to the disclosure requirements, the detailed disclosure requirements 
laid down in Articles 5 to 7 of Regulation (EU) 2020/852 become moot.  

(31)  To  monitor  the  implementation  of  this  Regulation  and  to  monitor  and  possibly  cater 
for  market  evolution  and  innovation,  the  European  Supervisory  Authorities  should 
take  stock  of  the  market  for  sustainability-related  financial  products  and  deliver  a 
report to the Commission on best practices every two years. This would allow for both 
encouraging best practices and monitor the need for any adjustment for the underlying 
criteria of the sustainability categories.  

(32)  Financial market participants shall start applying this Regulation 12 months after the 
date  of  application  of  this  Regulation  for  IBIPs,  pension  products,  pension  schemes 
and  PEPPs.  These  products  are  not  subject  to  the  ESMA  guidelines  on  funds  names 
and  therefore  will  require  more  time  to  implement  the  new  underlying  criteria, 
especially to implement the exclusions.  

82 

83  

84 

Interinstitutional Agreement between the European Parliament, the Council of the European Union and 
the  European  Commission  on  Better  Law-Making 
(OJ  L  123,  12.5.2016,  p.  1, 
ELI: http://data.europa.eu/eli/agree_interinstit/2016/512/oj). 
Regulation  (EU)  No  182/2011  of  the  European  Parliament  and  of  the  Council  of  16  February  2011 
laying down the rules and general principles concerning mechanisms for control by Member States of 
the  Commission’s 
(OJ  L  55,  28.2.2011,  p.  13, 
implementing  powers 
ELI: http://data.europa.eu/eli/reg/2011/182/oj). 
Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 
on  key  information  documents  for  packaged  retail  and  insurance-based  investment  products  (PRIIPs) 
(OJ L 352, 9.12.2014, pp. 1, ELI: http://data.europa.eu/eli/reg/2014/1286/oj). 

exercise  of 

EN 

29 

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(33)  Since  the  objectives  of  this  Regulation,  namely  to  strengthen  protection  for  end 
investors  and  improve  disclosures  to  them,  including  in  cases  of  cross‐border 
purchases by end investors, cannot be sufficiently achieved by the Member States but 
can  rather,  by  reason  of  the  need  to  lay  down  uniform  disclosure  requirements,  be 
better achieved at Union level, the Union may adopt measures, in accordance with the 
principle  of  subsidiarity  as  set  out  in  Article  5  of  the  Treaty  on  European  Union.  In 
accordance  with  the  principle  of  proportionality,  as  set  out  in  that  Article,  this 
Regulation does not go beyond what is necessary in order to achieve those objectives. 

(34)  Regulation  (EU)  2019/2088  and  Regulation  (EU)  No  1286/2014  should  therefore  be 

amended accordingly, 

HAVE ADOPTED THIS REGULATION: 

Article 1 

Amendments to Regulation (EU) 2019/2088 

Regulation (EU) 2019/2088 is amended as follows: 

(1) 

Article 1 is replaced by the following: 

‘Article 1 

Subject matter 

This Regulation lays down harmonised rules for financial market participants on: 

(a) 

transparency with regard to the provision of sustainability-related information, 
including  the  integration of sustainability  risks  with  respect  to  the investment 
decision-making  process  of  those  financial  market  participants  and  the 
financial products they offer to investors; 

(b) 

the  categorisation  of,  and  transparency  with  regard  to,  financial  products  as 
sustainability-related financial products.’; 

(2) 

Article 2 is amended as follows: 

(a) 

point (1) is amended as follows: 

(i) 

point (b) is deleted; 

(ii)  point (j) is deleted; 

(b)  points (5) and (6) are deleted; 

(c) 

point (11) is deleted; 

(d) 

in point (12), point (a) is deleted; 

(e) 

(f) 

points (16) and (17) are deleted; 

points (20) and (21) are deleted; 

(g) 

the following  points (25) to (28) are added:   

‘(25) 
is 

'sustainability-related financial product’ means a financial product that 
9; 

accordance  with  Article 

categorised 

or 

in 

7, 

8 

(26) 

‘sustainability-related financial product with impact’ means a financial 

EN 

30 

  EN 

 
 
 
 
product categorised in accordance with Article 7 or 9 that has as its objective 
the  generation  of  a  pre-defined,  positive  and  measurable  social  or 
environmental impact;  

(27) 
'public  sector  bodies’  means  central  governments  or  central  banks, 
regional  governments  or  local  authorities,  multilateral  development  banks  as 
referred  to  in  Article  117  of  Regulation  (EU)  No 575/2013  of  the  European 
Parliament and of the Council*1, and international organisations as referred to 
in Article 118 of that Regulation; and  

(28) 
‘environmental objectives’ means the objectives referred to in Article 9 
of Regulation (EU) 2020/852*2, namely climate change mitigation and climate 
change  adaptation,  the  sustainable  use  and  protection  of  water  and  marine 
resources,  the  transition  to  a  circular  economy,  pollution  prevention  and 
control, and the protection and restoration of biodiversity and ecosystems.’; 

_________________________________________________________ 

*1 
Regulation  (EU)  No  575/2013  of  the  European  Parliament  and  of  the  Council  of  26  June  2013  on 
prudential  requirements  for  credit  institutions  and  amending  Regulation  (EU)  No 648/2012  (OJ  L  176, 
27.6.2013, p. 1, ELI: http://data.europa.eu/eli/reg/2013/575/oj). 

*2  
Regulation  (EU)  2020/852  of  the  European  Parliament  and  of  the  Council  of  18  June  2020  on  the 
establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (OJ 
L 198, 22.6.2020, pp. 13, ELI: http://data.europa.eu/eli/reg/2020/852/oj). '; 

(3) 

(4) 

Article 2a is deleted; 

Article 3 is replaced by the following: 

‘Article 3 

Transparency on sustainability risk policies in relation to the integration of sustainability 
risks 

Financial market participants shall publish on their website information about their policies on 
the integration of sustainability risks in their investment decision-making process.’; 

(5) 

(6) 

Articles 4 and 5 are deleted; 

Article 6 is amended as follows: 

(a) 

the title is replaced by the following: 

‘Transparency on the integration of sustainability risks in pre-contractual disclosures for all 
financial products’; 

(b)  paragraph 2 is deleted; 

(c) 

paragraph 3 is amended as follows: 

(i) 

the introductory wording is replaced by the following:  
‘The  information  referred  to  in  paragraph  1  shall  be  disclosed  in  the 
following manner:’; 

(ii)  points (h), (i) and (j) are deleted; 

(7) 

the following Article 6a is inserted: 

EN 

31 

  EN 

 
 
 
 
‘Article 6a 

Voluntary transparency on the integration of sustainability factors in pre-contractual 
disclosures for products that are not categorised as sustainability-related financial products 

1. 

Financial  market  participants  shall  not  be  prevented  from  including  in  the  pre-
contractual  documentation  of  financial  products,  other  than  those  categorised  as 
sustainability-related financial products pursuant to Articles 7, 8 or 9, information on 
whether  and  how  those  financial  products  consider  sustainability  factors,  provided 
that such information: 

(a) 

(b) 

(c) 

is  not  a  central  element  of  the  pre-contractual  disclosures  of  the  financial 
product; 

is not included in the KIID as referred to in Article 78 of Directive 2009/65/EC 
or the KID as referred to in Chapter II of Regulation (EU) No 1286/2014*3; 

does  not  constitute  claims  within  the  meaning  of  Article  7(1),  Article  8(1)  or 
Article 9(1). 

For  the  purposes  of  the  first  subparagraph,  point  (a),  the  information  shall  be 
considered not be a central element where it is secondary to the presentation of the 
product  characteristics  both  in  terms  of  breadth  and  positioning  in  the  document, 
neutral, and limited to less than 10% of the volume occupied by the presentation of 
the financial product’s investment strategy. 

The information referred to in the paragraph 1 shall be disclosed in the manner laid 
down in Article 6(3). 

Financial market participants disclosing information under paragraph 1 shall include 
on an annual basis a description of the consideration of the sustainability factors in 
their periodic report. The conditions listed under paragraph 1, points (a) to (c), apply 
mutatis  mutandis  with  regards  to  any  sustainability-related  information  included  in 
this periodic report.  

The  information  referred  to  in  paragraph  3  shall  be  disclosed  in  the  manner  laid 
down in Article 11(2). 

2. 

3. 

4. 

_____________________________________ 

*3  
Regulation  (EU)  No  1286/2014  of  the  European  Parliament  and  of  the  Council  of  26 
November  2014  on  key  information  documents  for  packaged  retail  and  insurance-based  investment 
products  (PRIIPs)  (OJ  L  352,  9.12.2014,  pp.  1  ELI:  http://data.europa.eu/eli/reg/2014/1286/2024-01-
09).’;   

(8) 

Articles 7, 8 and 9 are replaced by the following: 

‘Article 7 

Transition category: criteria and disclosures  

1. 

Financial market participants shall not claim that their financial products invest in the 
transition of undertakings, economic activities, or other assets towards sustainability, 
or  contribute  to  such  transition,  unless  those  financial  products  meet  the  following 
conditions: 

(a) 

they  have  a  70%  threshold  linked  to  the  proportion  of  investments  to  meet  a 
clear  and  measurable  transition  objective  related  to  sustainability  factors, 

EN 

32 

  EN 

 
 
 
including environmental or social transition objectives in accordance with the 
binding elements of the investment strategy of the financial product, measured 
using appropriate sustainability-related indicator(s);  

(b) 

they  exclude  investments  in  companies  as  referred  to  in  Article  12(1),  points 
(a),  (b),  (c),  and  (d)  of  Commission  Delegated  Regulation  (EU)  2020/1818*4, 
with  the  exception  of  investments  in  use  of  proceeds  instruments  issued  by 
companies: 

(i) 

in  accordance  with  Article  3  of  Regulation  (EU)  2023/2631  of  the 
European Parliament and of the Council*5; or 

(ii)  where the proceeds do not fund any underlying activities as referred to in 
Article  12(1),  points  (a),  (b)  and  (d),  of  Delegated  Regulation  (EU) 
2020/1818, provided that the issuer of the use of proceeds instruments is 
not excluded under Article 12(1), point (c), of that Regulation. 

(c) 

they exclude investments in companies that: 

(i) 

develop  new  projects  for  the  exploration,  extraction,  distribution  or 
refining of hard coal and lignite, oil fuels or gaseous fuels; or 

(ii)  develop  new  projects  for,  or  do  not  have  a  plan  to  phase-out  from,  the 
exploration,  mining,  extraction,  distribution,  refining  or  exploitation  of 
hard coal or lignite for power generation. 

(d) 

they identify and disclose the principal adverse impacts of their investments on 
sustainability factors, and explain any actions taken to address those impacts.  

Financial  market  participants  may  choose  to  comply  in  full  or  in  part  with  the 
disclosure  requirement  described  under  the  first  subparagraph  point  (d)  by  using 
appropriate sustainability-related indicators. 

The conditions described in the first subparagraph shall be considered to be met for 
financial  products  that  replicate  or  are  managed  in  reference  to  an  EU  climate 
transition benchmark that complies with the requirements laid down in Section 2 of 
Delegated  Regulation  (EU)  2020/1818,  or  an  EU  Paris-aligned  benchmark  that 
complies  with  the  requirements  laid  down  in  Section  3  of  Chapter  II  of  that 
Delegated Regulation.  

The conditions described under the first subparagraph, point (a) shall be considered 
met  for  financial  products  with  a  proportion  of  investments  in  taxonomy-aligned 
economic activities, as defined in Article 1, point (2), of Delegated Regulation (EU) 
2021/2178*6, equal or higher than 15%. 

The first subparagraph, point (a) shall not include investment in issuances by public 
sector bodies, with the exception of the use of proceeds instruments issued by public 
sector bodies:  

(a) 

in accordance with Article 3 of Regulation (EU) 2023/2631; or 

(b)  where  the  proceeds  do  not  fund  any  underlying  activities  excluded  under 
Article 12(1), points (a), (b) and (d), of Delegated Regulation (EU) 2020/1818 
or companies excluded under Article 12(1), point (c), of that Regulation.  

2. 

Investments  by  financial  products  as  referred  to  in  paragraph  1,  first  subparagraph, 
point (a), shall include any of the following:  

EN 

33 

  EN 

(a) 

investments in portfolios replicating or managed in reference to an EU climate 
(‘EU  climate 
transition  benchmark  or  EU  Paris-aligned  benchmark 
benchmarks’); 

(b) 

investments  in  taxonomy-aligned  economic  activities  as  defined  in  Article 1, 
point (2), of Commission Delegated Regulation (EU) 2021/2178, including: 

(i) 

(ii) 

transitional  economic  activities  as  referred  to  in  Article 10(2)  of 
Regulation (EU) 2020/852; 

taxonomy-eligible  economic  activities  becoming  taxonomy-aligned  in 
accordance with point (b) of the first sub-paragraph of Section 1.1.2.2. of 
Annex I of Delegated Regulation (EU) 2021/2178. 

investments  in  undertakings  or  economic  activities  with  a  credible  transition 
plan as regards at least one sustainability factor at the level of the undertaking 
or at activity level respectively, proportionate to the size of the undertaking; 

investments in undertakings or economic activities with credible science-based 
targets  that  are  supported  by  information  ensuring  integrity,  transparency  and 
accountability;  

investments  accompanied  with  a  credible  sustainability-related  engagement 
strategy, targeting specific changes with defined milestones and measured with 
reference to those targets and milestones, and integrating escalation actions in 
case  the  expected  changes  do  not  happen,  in  combination  with  any  of  those 
referred to in points (a) to (d) or (h);  

investments pursuant to Article 9(2) in combination with any of those referred 
to in points (a) to (e); 

investments  with  a  credible  transition  target  set  at  the  level  of  the  portfolio, 
such as reduction of portfolio emissions over time; 

(c) 

(d) 

(e) 

(f) 

(g) 

(h)  other  investments  in  undertakings,  economic  activities  or  other  assets  that 
credibly contribute to the transition provided proper justification is included in 
the disclosures required pursuant to paragraph 3.  

Where  the  financial  product  aims  at  meeting  a  clear  and  measurable  transition 
towards  the  climate  change  mitigation  objective,  the  credible  transition  plans, 
science-based targets and sustainability-related engagement strategy referred to in the 
first subparagraph points (c) to (e), the credible transition target set at the level of the 
portfolio referred to in letter (g) and the credible contribution referred to in letter (h), 
shall be compatible with the transition to a sustainable economy and with the limiting 
of global warming  in  line with  the Paris Agreement  and the objective of  achieving 
climate neutrality as established in Regulation (EU) 2021/1119. 

3. 

For  the  financial  products  referred  to  in  paragraph  1,  first  subparagraph,  financial 
market participants shall disclose the following information: 

(a) 

(b) 

a  statement  that  the  financial  product  meets  the  conditions  laid  down  in 
paragraph 1; 

a  description  of  the  transition-related  objective(s)  to  which  the  financial 
product contributes; 

(c) 

a description of: 

EN 

34 

  EN 

(i) 

(ii) 

the  transition-related  strategy  of  the  financial  product  to  comply  with 
paragraph 1, first subparagraph, point (a); 

the  applicable  choice  and  relative  share  of  investments  referred  to  in 
paragraph 2; 

(iii)  any  applicable  phase-in  period  for  the  product  to  reach  the  threshold 
referred to paragraph 1, first subparagraph, point (a), following the period 
necessary to implement the investment strategy, in line with information 
set out in pre-contractual disclosures.  

(d)  where the product pursues an environmental objective, a statement on whether, 
and the extent to which, the financial market participant meets the requirement 
referred  to  in  paragraph  1,  first  subparagraph,  point  (a),  by  investing  in 
accordance with paragraph 2, first subparagraph, point (b). 

(e) 

(f) 

the  sustainability-related  indicator(s)  used  by  the  financial  market  participant 
referred  to  in  paragraph  1,  first  subparagraph,  point (a),  for  measuring 
compliance with the strategy and progress toward the objective, together with 
information  on  actions  to  address  any  underperforming  assets  in  terms  of  the 
objective and chosen indicator(s); 

a  statement  that  the  financial  market  participant  complies  with  paragraph  1, 
first  subparagraph,  point  (b)  and  any  additional  applicable  exclusions  of 
investments  determined  by  the  financial  market  participant  for  the  financial 
product; 

(g)  data sources used to inform points (b) to (e). 

The information referred to in the first subparagraph shall be disclosed in the manner 
laid down in Article 6(3).  

4. 

For  financial  products  with  a  transition  objective  falling  within  the  meaning  of 
Article 2, point (26), the information to be disclosed shall also contain: 

(a) 

the intended impact(s) in terms of specified environmental or social objectives, 
underpinned by a pre-set impact theory; and 

(b)  provisions  to  measure,  manage,  and  report  on  the  desired  impact  pursuant  to 
point  (a),  including  in  terms  of  investments  by  the  financial  product  and  the 
contribution of investors in the financial product.  

Article 8 

ESG basics category: criteria and disclosures  

1. 

Financial market participants shall not claim that their financial products, other than 
those  referred  to  in  Articles  7  and  9,  integrate  sustainability  factors  in  their 
investment  strategy  beyond  the  consideration  of  sustainability  risks,  unless  those 
financial products meet the following conditions: 

(a) 

they have a 70% threshold linked to the proportion of investments integrating 
the  sustainability  factors  in  accordance  with  the  binding  elements  of  the 
investment  strategy  of  the  financial  product,  measured  using  appropriate 
sustainability-related indicator(s); 

EN 

35 

  EN 

 
 
(b) 

they  exclude  investments  in  companies  as  referred  to  in  Article 12(1),  points 
(a),  (b),  (c)  and  (d),  of  Delegated  Regulation  (EU)  2020/1818,  with  the 
exception of investments in use of proceeds instruments issued by companies:  

(i) 

in accordance with Articles 3 of Regulation (EU) 2023/2631; or 

(ii)  where the proceeds do not fund any underlying activities excluded under 
Article  12(1),  points  (a),  (b)  and  (d),  of  Delegated  Regulation  (EU) 
2020/1818, provided that the issuer of the use of proceeds instruments is 
not excluded under Article 12(1), point (c); of that Delegated Regulation. 

2. 

Investments  by  financial  products  as  referred  to  in  paragraph  1,  first  subparagraph, 
point (a), shall include any or a combination of the following: 

(a) 

(b) 

(c) 

(d) 

(e) 

investments  with  an  ESG  rating  as  defined  by  Regulation  2024/3005  that 
outperforms  the  average  rating  of  the  investment  universe  or  the  reference 
benchmark; 

investments  that  outperform  the  average  investment  universe  or  reference 
benchmark on a specific appropriate sustainability indicator; 

investments  that  favour  undertakings  or  economic  activities  with  a  proven 
positive track record in terms of processes, performance or outcomes related to 
sustainability factors; 

a  combination  of  investments  pursuant  to  Article  7(2)  or  Article  9(2)  of  this 
Regulation  and  the  investments  referred  to  in  points  (a),  (b)  and  (c)  of  this 
paragraph; 

other investments integrating sustainability factors beyond the consideration of 
sustainability risks, provided proper justification is included in the disclosures 
required pursuant to paragraph 3. 

3. 

For  financial  products  as  referred  to  in  paragraph  1,  financial  market  participants 
shall disclose the following information: 

(a) 

a statement that the financial product meets the conditions of paragraph 1; 

(b) 

a description of the sustainability factors that the financial product integrates; 

(c) 

a description of: 

(i) 

(ii) 

the  strategy  of  the  financial  product  to  comply  with  paragraph  1,  first 
subparagraph, point (a); 

the  applicable  choice  and  relative  share  of  investments  referred  to  in 
paragraph 2; 

(iii)  any  applicable  phase-in  period  for  the  product  to  reach  the  threshold 
referred  to  in  paragraph  1,  first  subparagraph,  point  (a),  following  the 
period  necessary  to  implement  the  investment  strategy,  in  line  with 
information set out in pre-contractual disclosures. 

(d) 

the  sustainability-related  indicator(s)  used  by  the  financial  market  participant 
referred  to  in  paragraph  1,  first  subparagraph,  point  (a),  for  measuring 
compliance with the strategy and progress toward the objective, together with 
information  on  actions  to  address  any  underperforming  assets  in  terms  of  the 
objective and chosen indicator(s); 

EN 

36 

  EN 

(e) 

a  statement  that  the  financial  product  complies  with  paragraph  1,  first 
investments 
subparagraph,  point  (b),  and  any  additional  exclusion  of 
determined by the financial market participant for the financial product; 

(f) 

data sources used to inform points (b) to (e).  

The information referred to in the first subparagraph shall be disclosed in the manner 
laid down in Article 6(3).  

Article 9 

Sustainable category: criteria and disclosures 

1. 

Financial  market  participants  shall  not  claim  that  their  financial  products  invest  in 
sustainable undertakings, sustainable economic activities, or other sustainable assets, 
or  contribute  to  sustainability,  unless  those  financial  products  meet  the  following 
conditions: 

(a) 

they  have  a  70%  threshold  linked  to  the  proportion  of  investments  to  meet  a 
clear  and  measurable  objective  related  to  sustainability  factors,  including 
environmental  and social  objectives,  in  accordance with  the binding elements 
of the investment strategy of the financial product, measured using appropriate 
sustainability-related indicators; 

(b) 

they  exclude  investments  in  companies  referred  to  in  Article 12(1)  of 
Delegated Regulation (EU) 2020/1818; 

(c) 

they exclude investments in companies that: 

(i) 

develop  new  projects  for  the  exploration,  extraction,  distribution  or 
refining of hard coal and lignite, oil fuels or gaseous fuels; or 

(ii)  develop  new  projects  for,  or  do  not  have  a  plan  to  phase-out  from,  the 
exploration,  mining,  extraction,  distribution,  refining  or  exploitation  of 
hard coal or lignite for power generation. 

(d) 

they identify and disclose the principal adverse impacts of their investments on 
sustainability factors, and explain any actions taken to address those impacts.  

Financial  market  participants  may  choose  to  comply  in  full  or  in  part  with  the 
disclosure  requirement  described  under  the  first  subparagraph  point  (d)  by  using 
appropriate sustainability related indicators. 

The  conditions  referred  to  in  the  first  subparagraph  shall  be  considered  met  for 
financial products that replicate or are managed in reference to an EU Paris-aligned 
benchmark that complies with the requirements laid down in Section 3 of Delegated 
Regulation (EU) 2020/1818.  

The conditions described under the first subparagraph, point (a) shall be considered 
met  for  financial  products  with  a  proportion  of  investments  in  taxonomy-aligned 
economic activities, as defined in Article 1, point (2), of Delegated Regulation (EU) 
2021/2178, equal or higher than 15%. 

The  financial  products  referred  to  in  the  first  subparagraph,  point  (a),  shall  not 
include investments in issuances by public sector bodies, with the exception of use of 
proceeds instruments issued by public sector bodies:  

(a) 

in accordance with Article 3 of Regulation (EU) 2023/2631; 

EN 

37 

  EN 

 
(b)  where the proceeds do not fund: 

(i) 

any underlying activities excluded under Article 12(1), points (a) and (b), 
and  (d)  to  (g),  of  Delegated  Regulation  (EU)  2020/1818  or  in  the  first 
subparagraph, point (c); or 

(ii) 

companies  excluded  under  Article  12(1),  point  (c),  of  Delegated 
Regulation (EU) 2020/1818. 

The  first  subparagraph,  points  (b)  and  (c),  shall  not  apply  to  investments  in  use  of 
proceeds instruments issued by companies:  

(a) 

in accordance with Article 3 of Regulation (EU) 2023/2631; or 

(b)  where  the  proceeds  do  not  fund  any  underlying  activities  as  referred  to  in 
Article 12(1), points (a) and (b), and (d) to (g), of Delegated Regulation (EU) 
2020/1818 or the first paragraph, point (c), provided that the issuer of the use 
of  proceeds  instruments  is  not  excluded  under  Article  12(1),  point (c),  of 
Delegated Regulation (EU) 2020/1818.  

2. 

Investments  by  financial  products  as  referred  to  in  paragraph  1,  point  (a),  shall 
include any or a combination of the following:  

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

investments  in  portfolios  replicating or managed  in  reference to  an  EU Paris-
aligned benchmark; 

investments  in  taxonomy-aligned  economic  activities  as  defined  in  Article 1, 
point (2), of Delegated Regulation (EU) 2021/2178; 

investments in instruments issued in accordance with Articles 3 of Regulation 
(EU) 2023/2631;  

investments,  including  co-investments,  that  finance  the  same  undertaking, 
project or portfolio identified in financing and investment operations benefiting 
from  a  Union  budgetary  guarantee  or  financial  instruments  under  Union 
programmes pursuing environmental or social objectives;  

investments  in  comparable  assets  to  those  referred  to  in  points  (a)  to  (c), 
provided that a proper justification of their high level of performance in terms 
of  sustainability  standards  is  included  in  the  disclosures  required  pursuant  to 
paragraph 3; 

investments in European social entrepreneurship funds (EuSEF)  as referred to 
in  Regulation  (EU)  No  346/2013of  the  European  Parliament  and  of  the 
Council*7; 

(g)  other investments in undertakings, economic activities, or assets that contribute 
to  an  environmental  objective  or  a  social  objective,  provided  that  a  proper 
justification is included in the disclosures required pursuant to paragraph 3. 

3. 

For  financial  products  as  referred  to  in  paragraph  1,  financial  market  participants 
shall disclose the following information in the manner laid down in Article 6(3): 

(a) 

(b) 

a statement that the financial product meets the conditions of paragraph 1; 

a  description  of  the  sustainability-related  objective(s)  to  which  the  financial 
product contributes; 

(c) 

a description of: 

EN 

38 

  EN 

(i) 

(ii) 

the  strategy  of  the  financial  product  to  comply  with  paragraph  1,  point 
(a); 

the  applicable  choice  and  relative  share  of  investments  referred  to  in 
paragraph 2; 

(iii)  any  applicable  phase-in  period  for  the  product  to  reach  the  threshold 
referred  to  in  paragraph  1,  point  (a),  following  the  period  necessary  to 
implement  the  investment  strategy,  in  line  with  information  set  out  in 
pre-contractual disclosures. 

(d)  where the product pursues an environmental objective, a statement on whether, 
and the extent to which, the financial market participant meets the requirement 
referred to in paragraph 1 point (a) by investing in accordance with paragraph 2 
point (b); 

(e) 

the  sustainability-related  indicator(s)  used  by  the  financial  market  participant 
referred  to  in  paragraph  1,  point  (a),  for  measuring  compliance  with  the 
strategy  and  progress  toward  the  objective,  together  with  information  on 
actions  to  address  any  underperforming  assets  in  terms  of  the  objective  and 
chosen indicator(s); 

(f) 

a  statement  that  the  financial  market  participant  complies  with  paragraph  1, 
points  (b)  and  (c),  and  any  additional  applicable  exclusion  of  investments 
determined by the financial market participant for the financial product; 

(g)  data sources used to inform points (b) to (e).  

The information referred to in the first subparagraph shall be disclosed in the manner 
laid down in Article 6(3). 

4. 

For  financial  products  with  a  sustainability  objective  falling  within  the  meaning  of 
Article 2, point (26), the information to be disclosed shall also include: 

(a) 

the intended impact(s) in terms of specified environmental or social objectives, 
underpinned by a pre-set impact theory; and  

(b)  provisions  to  measure,  manage  and  report  on  the  desired  impact  pursuant  to 
point  (a),  including  in  terms  of  investments  by  the  financial  product  and  the 
contribution of investors in the financial product.  

_______________________________________________ 

*4 
Commission  Delegated  Regulation  (EU)  2020/1818  of  17  July  2020  supplementing  Regulation  (EU) 
2016/1011  of  the  European  Parliament  and  of  the  Council  as  regards  minimum  standards  for  EU  Climate 
p. 17, 
Transition  Benchmarks 
ELI: http://data.europa.eu/eli/reg_del/2020/1818/oj). 

and  EU  Paris-aligned  Benchmarks 

3.12.2020, 

(OJ  L 

406, 

*5 
Regulation (EU) 2023/2631 of the European Parliament and of the Council of 22 November 2023 on 
European  Green  Bonds  and  optional  disclosures  for  bonds  marketed  as  environmentally  sustainable  and  for 
sustainability-linked bonds (OJ L, 2023/2631, 30.11.2023, ELI: http://data.europa.eu/eli/reg/2023/2631/oj). 

*6 
Commission  Delegated  Regulation  (EU)  2021/2178  of  6  July  2021  supplementing  Regulation  (EU) 
2020/852  of  the  European  Parliament  and  of  the  Council  by  specifying  the  content  and  presentation  of 
information to be disclosed by undertakings subject to Articles 19a or 29a of Directive 2013/34/EU concerning 
environmentally sustainable economic activities, and specifying the methodology to comply with that disclosure 
obligation (OJ L 443, 10.12.2021, p. 9, ELI: http://data.europa.eu/eli/reg_del/2021/2178/oj). 
*7  
European 
http://data.europa.eu/eli/reg/2013/346/oj).’;  

Regulation  (EU)  No  346/2013  of  the  European  Parliament  and  of  the  Council  of  17  April  2013  on 
ELI: 

entrepreneurship 

25.4.2013, 

social 

funds 

115, 

(OJ 

18, 

p. 

L 

EN 

39 

  EN 

(9) 

the following Article 9a is inserted: 

‘Article 9a 

Financial products that claim that they combine financial products that are categorised as 
sustainability-related products  

1. 

2. 

3. 

Financial  products  that  claim  that  they  combine  financial  products  that  are 
categorised  as  sustainability-related  financial  products  shall  be  deemed  to  be 
compliant with the requirements of Articles 7, 8 or 9 if they meet the 70% threshold 
of  investments  referred  to  in  paragraph  1  point  (a)  of  those  Articles  by  way  of 
investments in categorised products or other investments that meet the requirements 
of Articles 7, 8 or 9, and comply with the exclusions in Articles 7(1), 8(1) or 9(1).  

For the purposes of assessing eligibility for a category as referred to in Articles 7 to 
9, financial market participants may rely on the information disclosed  in relation to 
their  investments  in,  or  exposure  to,  financial  products  categorised  in  accordance 
with those Articles.  

For non-categorised financial products that claim that they invest in, are exposed to 
or  are  constituted  of  two  or  more  underlying  financial  products  as  referred  to  in 
Articles  7,  8  and  9,  the  information  to  be  disclosed  pursuant  to  Article  6(3)  shall 
include: 

(a) 

the  composition  of  the  financial  product  in  terms  of  the  relative  share  of  the 
underlying financial products referred to in Articles 7, 8 and 9; 

(b) 

the share of the financial product to which point (a) does not apply; 

(c) 

the  objective,  strategy  and  applicability  of  any  exclusions  applicable  to  the 
share of the product referred to in point (b) of this subparagraph.  

For the purposes of the first subparagraph, financial market participants may rely on 
the information referred to in Article 7(3), Article 8(3) and Article 9(3). 

Where financial market participants are provided with portfolio management services 
by  entities  authorised  therefor  in  accordance  with  either  Directives  2009/65/EC, 
2009/138/EC,  2011/61/EU, 2013/36/EU, 2014/65/EU or Directive (EU) 2016/2341, 
they may rely on the information provided by those entities.’; 

(10) 

Article 10 is replaced by the following: 

‘Article 10 

Transparency on websites on sustainability-related financial products 

Financial  market  participants  shall  publish  and  maintain  on  their  websites  the  following 
information for each financial product referred to in Article 7(1), Article 8(1) and Article 9(1): 

(a) 

the  information  referred  to  in  Article  7(3),  Article  7(4),  Article  8(3), 
Article 9(3) and Article 9(4); 

(b) 

the information referred to in Article 11. 

The  information  to  be  disclosed  pursuant  to  this  Article  shall  be  clear,  succinct  and 
understandable  to  investors.  It  shall  be  published  in  a  way  that  is  accurate,  fair,  clear,  not 
misleading, simple, and concise and in a prominent easily accessible area of the website. 

EN 

40 

  EN 

 
 
 
The information  referred to in subparagraph 1 may be  disclosed by form of weblinks to the 
respective documentation referred to in Article 6(3) or Article 11(2).’ 

(11) 

Article 11 is amended as follows: 

(a) 

the title is replaced by the following: 

‘Transparency in periodic reports on sustainability-related financial products’; 

(b)  paragraph 1 is replaced by the following: 

Financial  market  participants  shall  describe  on  an  annual  basis  in  the 
‘1. 
periodic  reports  for  each  financial  product  referred  to  in  Article  7(1),  first 
subparagraph, Article 8(1), first subparagraph, and Article 9(1): 

(a) 

the extent to which the applicable objectives are met, or sustainability factors 
are integrated, in particular by way of reference to the indicator(s) referred to in 
Article 7(3), point (d), Article 8(3), point (d), or Article 9(3), point (d); 

(b) 

for  financial  products  falling  within  the  meaning  of  Article  2,  point (26),  the 
information referred to in Article 7(4), point (b), or Article 9(4), point (b).’; 

(c) 

in paragraph 2, points (h) and (i) are deleted; 

(d)  paragraphs 4 and 5 are deleted; 

(12) 

Article 12 is replaced by the following: 

‘Article 12 

Review of disclosures 

Financial market participants shall ensure that any information published in accordance with 
Article 3 or 10 is kept up to date. A financial market participant that amends such information 
shall explain such amendment on the same website as the website on which the information 
has been published.’; 

(13) 

the following Article 12a is inserted:  

‘Article 12a 

Data and estimates 

In complying with Articles 7 to 11, financial market participants: 

(a) 

shall ensure that: 

(i) 

the  use  of  data  provided  by  external  data  providers,  other  than  open 
source or  research freely available to  the public,  is  based on formalised 
and documented arrangements; 

(ii) 

the use of estimates that are not based on data provided by external data 
providers is based on formalised and documented methodologies; 

(b) 

shall provide clients upon request with: 

(i) 

information regarding sustainability-related financial products other than 
the information disclosed in accordance with Article 7(3) and (4), Article 
8(3), Article 9(3) and (4), and Article 11; 

EN 

41 

  EN 

 
 
 
 
(ii)  where  data  or  estimates  are  sourced  from  data  providers,  the  name, 
contact  details  and,  where  applicable  and  available,  the  methodology 
used by data providers; 

(iii) 

the methodology, the main assumptions and the precautionary principles 
regarding  the  treatment  of  missing  datapoints  underlying  estimations 
where those are not based on data provided by external data providers.’; 

(14) 

Article 13 is replaced by the following: 

‘Article 13 

Marketing communications and naming rules  

1. 

2. 

3. 

4. 

5. 

Notwithstanding  stricter  sectoral  legislation,  in  particular  Directives  2009/65/EC  of 
the European Parliament and of the Council*8, Directive 2014/65/EU, Directive (EU) 
2016/97,  and  Regulation  (EU)  No  1286/2014,  financial  market  participants  shall 
ensure that their marketing communications do not contradict the information  to be 
disclosed pursuant to this Regulation. 

Financial  market  participants  may  only  include  sustainability-related  claims  in  the 
names  and  in  the  marketing  communications  of  financial  products  referred  to  in 
Article 7(1), Article 8(1) and Article 9(1).  

The claims in the names and in the marketing communications referred to in the first 
subparagraph  shall  be  clear,  fair,  not  misleading,  and  consistent  with  the 
sustainability features of those financial products.  

Financial  market  participants  may  not  include  sustainability-related  claims  in  the 
names  and  in  the  marketing  communications  of  financial  products  referred  to  in 
Article 6(a).  

Financial  market  participants  may  include  sustainability-related  claims  in  the 
marketing  communications  of  financial  products  referred  to  in  Article  9a  provided 
those claims  are clear, fair and not  misleading,  and consistent with  the information 
disclosed in accordance with of Article 9a(1), points (a) to (c).  

Financial products other than those referred to in Article 2, point (26), shall not use 
the term ‘impact’ in their name. 

Where  a  financial  market  participant  issues  and  discloses  to  third  parties  an  ESG 
rating,  as  defined  in  Article  3,  point  (1),  of  Regulation  (EU)  2024/3005  of  the 
European Parliament and of the Council*9, as part of its marketing communications, 
it  shall  include  on  its  website  the  same  information  as  that  required  by  point  1  of 
Annex III to that Regulation and it shall disclose in those marketing communications 
a link to those website disclosures. 

_______________________________________ 

*8 
Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the 
coordination of laws, regulations and administrative provisions relating to undertakings for collective 
investment 
transferable  securities  (UCITS)  (recast)  (OJ  L  302,  17.11.2009,  pp.  32, 
ELI: http://data.europa.eu/eli/dir/2009/65/oj). 

in 

*9  
Regulation (EU) 2024/3005 of the  European Parliament and of the Council of 27 November 
2024  on  the  transparency  and  integrity  of  Environmental,  Social  and  Governance  (ESG)  rating 
activities,  and  amending  Regulations  (EU)  2019/2088  and  (EU)  No  2023/2859  (OJ  L,  2024/3005, 
12.12.2024, ELI: http://data.europa.eu/eli/ reg/2024/3005/oj).’. 

(15) 

Article 14 is amended as follows: 

EN 

42 

  EN 

(a) 

paragraph 1 is replaced by the following: 

‘1.  Member  States  shall  ensure  that  the  competent  authorities  defined, 
designated or specified in accordance with sectoral legislation, in particular the 
sectoral  legislation  referred  to  in  Article  6(3)  of  this  Regulation,  and  in 
accordance  with  Directive  2013/36/EU,  monitor  the  compliance  of  financial 
market  participants  with  the  requirements  of  this  Regulation.  The  competent 
authorities  shall  have  all  the  supervisory  and  investigatory  powers  that  are 
necessary for the exercise of their functions under this Regulation.’; 

(b) 

the following paragraph 3 is added: 

‘3.  Without  prejudice  to  Article  17(3),  Member  States  shall  ensure  that 
competent or other national authorities do not apply requirements additional to 
those  set  out  in  Articles  3,  6,  10,  11  and  13  as  regards  information 
requirements, and in Articles 7, 8 and 9 as regards the criteria and transparency 
regarding  financial  products  that  are  categorised  as  sustainability-related 
financial products.’; 

(16) 

Article 15 is replaced by the following: 

‘Article 15 

Transparency by IORPS 

IORPs shall publish and maintain the information  referred to  in  Articles  3, 6 and 10 of this 
Regulation in accordance with Article 36(2), point (f), of Directive (EU) 2016/2341.’; 

(17) 

Article 17 is replaced by the following: 

‘Article 17 

Exemptions 

1. 

2. 

Financial  market  participants  may  choose  not  to  apply  this  Regulation  to  financial 
products  of  the  closed-ended  type  which  were  created  and  distributed  before  [the 
date of application of this Regulation].  

This  Regulation  is  without  prejudice  to  voluntary  sustainability-related  labelling 
schemes for financial products with features that exceed those in Articles 7, 8 and 9 
in terms of specified objectives, investment approaches, governance or transparency 
requirements.’; 

(18) 

Article 18 is replaced by the following: 

‘Article 18 

Report 

The ESAs shall take stock of the extent of financial products referred to in Articles 7, 8 and 9 
made available or managed by financial market participants. By [24 months after the date of 
application of this Regulation] and every two years thereafter, the ESAs shall submit a report 
to the Commission on best practices. That report shall be made public and be transmitted to 
the European Parliament and to the Council.’ 

(19) 

Article 18a is amended as follows: 

(a) 

paragraph 1 is amended as follows: 

EN 

43 

  EN 

 
 
 
 
 
 
 
(i) 

the first subparagraph is replaced by the following:  

‘From [18 months after the date of application of this Regulation], when 
making  public  any  information  referred  to  in  Articles  3  and  10  of  this 
Regulation, financial market participants shall submit that information at 
the same time to the relevant collection body referred to in paragraph 3 of 
this  Article  for  the  purpose  of  making  it  accessible  on  the  European 
single access point (ESAP) established under Regulation (EU) 2023/2859 
of the European Parliament and of the Council.*10’;  

(ii) 

in the second subparagraph, point (b), points (i), (ii) and (iii) are replaced 
by the following: 

‘(i)  all  the  names  of  the  financial  market  participant  to  which  the 

information relates; 

(ii) 

for legal persons, the legal entity identifier of the financial market 
participant,  as  specified  pursuant  to  Article  7(4),  point (b),  of 
Regulation (EU) 2023/2859; 

(iii)  for  legal  persons,  the  size  of  the  financial  market  participant  by 
category,  as  specified  pursuant  to  Article  7(4),  point  (d),  of 
Regulation (EU) 2023/2859;’; 

(b)  paragraph 2 is replaced is by the following:   

 For  the  purposes  of  paragraph  1,  point  (b)(ii),  financial  market 

‘2. 
participants that are legal persons shall obtain a legal entity identifier. 

________________________________________________ 

*10 
Regulation  (EU) 2023/2859  of  the  European  Parliament  and  of  the  Council  of  13 December 
2023  establishing  a  European  single  access  point  providing  centralised  access  to  publicly  available 
information  of  relevance  to  financial  services,  capital  markets  and  sustainability  (OJ  L,  2023/2859, 
20.12.2023, ELI: http://data.europa.eu/eli/reg/2023/2859/oj).’; 

(20) 

Article 19 is replaced by the following: 

‘Article 19 

Review 

By [36 months after the date of application of this Regulation], the Commission shall review 
the application of this Regulation and shall in particular consider: 

(a) 

practices regarding the  categorisation  of products in  accordance with  Articles 
7, 8 and 9;  

(b)  practices  regarding  the  use  of  data  and  estimates  pursuant  to  Article  12a  and 
whether these practices and the functioning of this Regulation are inhibited by 
data availability or quality issues; 

(c) 

adjusting  the  proportion  of  investments  in  taxonomy-aligned  economic 
activities  needed  to  comply  with  the  option  under  Article  7(1),  third 
subparagraph, and Article 9(1), third subparagraph.’;  

(21) 

the following Articles 19a, 19b and 19c are inserted: 

EN 

44 

  EN 

 
 
 
 
‘Article 19a 

Transitional provisions 

Financial  market  participants  shall  apply  Articles  7,  8,  9,  10  and  11  of  this  Regulation  as 
amended by Regulation [PP: please insert reference to this amending regulation] to financial 
products referred to in Article 2(12), points (c), (d), (e), (g) and (h)  by [12 months after the 
date of application of this Regulation]. 

Article 19b 

Empowerments 

The Commission shall be empowered to adopt a delegated act in accordance with Article 19c 
to supplement:  

(a) 

paragraphs 1, 2, 3 and 4 of Article 7 to specify: 

(a) 

the  conditions  for  investments  to  contribute  to  the  transition-related 
objective, and more in particular to specify:  

(i) 

(ii) 

(iii) 

indicator(s)  building  on  the  indicators  referred  to  in  Annex  I  to 
(EU)  2022/1288*11  and 
Commission  Delegated  Regulation 
Commission Delegated Regulation (EU) 2023/2772 [to be adapted 
to  the  new  CSRD  delegated  act]*12  for  voluntary  use  by  financial 
market  participants  when  complying  with  paragraph  1,  first 
subparagraph, point (a) and point (d); 

any limited permitted deviations from the exclusions referred to in 
paragraph  1,  first  subparagraph,  point  (b),  including  for  the 
purposes of hedging; 

the  methodologies  to  calculate  the  threshold  referred  to  in 
paragraph  1,  first  subparagraph,  point  (a),  including  the  shares  of 
investments referred to in paragraph 1, first subparagraph, to which 
the  chosen  indicator(s)  may  apply,  and  any  applicable  phase-in 
period  for  the  product  to  reach  the  threshold  referred  to  in 
paragraph 1, first subparagraph, point (a);  

(iv) 

the conditions for investments referred to in paragraph 2 to qualify 
as contributing to the transition-related objective. 

(b) 

the details of the presentation of the information to be disclosed pursuant 
to paragraph 3, which shall not exceed two pages, and the information to 
be disclosed pursuant to paragraph 4, which shall not exceed one page.; 

(b)  paragraphs 1, 2 and 3 of Article 8 to specify: 

(a) 

the  conditions  for  investments  to  integrate  sustainability  factors,  and  in 
particular to specify:  

(i) 

indicator(s)  building  on  the  indicators  referred  to  in  Annex  I  to 
and 
Commission  Delegated  Regulation 
Commission Delegated Regulation (EU) 2023/2772 [to be adapted 
to  the  new  CSRD  delegated  act]  for  voluntary  use  by  financial 
market  participants  when  complying  with  paragraph  1,  first 
subparagraph, point (a); 

(EU)  2022/1288 

EN 

45 

  EN 

 
(ii) 

(iii) 

any limited permitted deviations from the exclusions referred to in 
paragraph  1,  first  subparagraph,  point  (b),  including  for  the 
purposes of hedging;  

the  methodologies  to  calculate  the  threshold  referred  to  in 
paragraph  1,  first  subparagraph,  point  (a),  including  the  shares  of 
investment  referred  to  in  paragraph  1  to  which  the  chosen 
indicator(s) may apply,  and any applicable phase-in period for the 
product  to  reach  the  threshold  referred  to  in  paragraph  1,  first 
subparagraph, point (a); 

(iv) 

the  conditions  for  the  investment  approaches  referred  to  in 
paragraph 2 to qualify as integrating sustainability factors. 

(b) 

the details of the presentation of the information to be disclosed pursuant 
to paragraph 3, which shall not exceed two pages.; 

(c) 

paragraphs 1, 2, 3 and 4 of Article 9 to: 

(a) 

specify the conditions for investments to contribute to the sustainability-
related objective, and in particular:  

(i) 

indicator(s)  building  on  the  indicators  referred  to  in  Annex  I  to 
and 
Commission  Delegated  Regulation 
Commission Delegated Regulation (EU) 2023/2772 [to be adapted 
to  the  new  CSRD  delegated  act]  for  voluntary  use  by  financial 
market  participants  when  complying  with  paragraph  1,  first 
subparagraph, point (a) and point (d); 

(EU)  2022/1288 

(ii) 

any limited permitted deviations from the exclusions referred to in 
paragraph 1, point (b), including for the purposes of hedging; 

(iii)  methodologies on how to calculate the threshold referred to in point 
(a) of paragraph 1 including the shares of investment referred to in 
paragraph  1  to  which  the  chosen  indicator(s)  may  apply,  and  any 
applicable  phase-in  period  for  the  product  to  reach  the  threshold 
referred to in paragraph 1, point (a); 

(iv) 

the conditions for investment approaches referred to in paragraph 2 
to qualify as contributing to the sustainability-related objective. 

(b) 

specify the details of the presentation of the information to be disclosed 
pursuant  to  paragraph  3,  which  shall  not  exceed  two  pages,  and  the 
information  to  be  disclosed  pursuant  to  paragraph  4,  which  shall  not 
exceed one page. 

(d)  paragraph  1  of  Article  11  by  specifying  the  details  of  the  presentation  of  the 

information to be disclosed, which shall not exceed two pages. 

Article 19c 

Exercise of the delegation 

1. 

2. 

The  power  to  adopt  delegated  acts  is  conferred  on  the  Commission  subject  to  the 
conditions laid down in this Article. 

The power to adopt delegated acts referred to in Article 19b shall be conferred on the 
Commission  for  an  indeterminate  period  from  [date  of  entry  into  force  of  this 
Regulation]. 

EN 

46 

  EN 

3. 

4. 

5. 

6. 

The delegations of powers referred to in Article 19b may be revoked at any time by 
the European Parliament or by the Council. A decision to revoke shall put an end to 
the  delegation  of  the  power  specified  in  that  decision.  It  shall  take  effect  the  day 
following  the  publication  of  the  decision  in  the  Official  Journal  of  the  European 
Union  or  at  a  later  date  specified  therein.  It  shall  not  affect  the  validity  of  any 
delegated acts already in force. 

Before adopting a delegated act, the Commission shall gather all necessary expertise, 
including through the consultation of the experts of the Member State Expert Group 
on  Sustainable  Finance  referred  to  in  Article  24  of  Regulation  (EU)  2020/852,  and 
where appropriate the European Supervisory Authorities, and in accordance with the 
principles  and  procedures  laid  down  in  the  Interinstitutional  Agreement  on  Better 
Law-Making of 13 April 2016. 

As soon as it adopts a delegated act, the Commission shall notify it simultaneously to 
the European Parliament and to the Council. 

A  delegated  act  adopted  pursuant  to  Article  19b  shall  enter  into  force  only  if  no 
objection  has  been  expressed  either  by  the  European  Parliament  or  by  the  Council 
within a period of two months of notification of that act to the European Parliament 
and the Council or if, before the expiry of that period, the European Parliament and 
the  Council  have  both  informed  the  Commission  that  they  will  not  object.  That 
period shall be extended by two months at the initiative of the European Parliament 
or of the Council. 

_______________________________________ 

*11 
Commission Delegated Regulation (EU) 2022/1288 of 6 April 2022 supplementing Regulation 
(EU)  2019/2088  of  the  European  Parliament  and  of  the  Council  with  regard  to  regulatory  technical 
standards  specifying  the  details  of  the  content  and  presentation  of  the  information  in  relation  to  the 
principle  of  ‘do  no  significant  harm’,  specifying  the  content,  methodologies  and  presentation  of 
information in relation to sustainability indicators and adverse sustainability impacts, and the content and 
presentation of the information in relation to the promotion of environmental or social characteristics and 
sustainable investment objectives in pre-contractual documents, on websites and in periodic reports (OJ L 
332, 27.12.2022, p. 1, ELI: http://data.europa.eu/eli/reg_del/2022/1288/oj). 

*12 
Commission Delegated Regulation (EU) 2023/2772 of 31 July 2023 supplementing Directive 
2013/34/EU of the European Parliament and of the Council as regards sustainability reporting standards 
(OJ L, 2023/2772, 22.12.2023, ELI: http://data.europa.eu/eli/reg_del/2023/2772/oj).’; 

Article 2 

Amendments to Regulation (EU) No 1286/2014 

Article 8 of Regulation (EU) No 1286/2014 is amended as follows: 

(1) 

in paragraph 3, point (c), point (ii) is replaced by the following: 

‘(ii) 
its  objectives  and  the  means  for  achieving  them,  in  particular  whether  the 
objectives  are  achieved  by  means  of  direct  or  indirect  exposure  to  the  underlying 
investment assets, including a description of the underlying instruments or reference 
values, including a specification of the markets the PRIIP invests in, as well as how 
the return is determined’; 

(2) 

in paragraph 3, the following point (ca) is inserted:  

EN 

47 

  EN 

 
 
 
 
‘(ca)  for  a  PRIIP  that  is  a  sustainability-related  financial  product  as  defined  in 
Article  2,  point  (25),  of  Regulation  (EU)  2019/2088,  under  a  section  titled  ‘How 
sustainable is this product?’, its categorisation in accordance with either Article 7, 8 
or  9  of  that  Regulation,  and  a  description  of  its  objective  including  relevant 
indicators.’ 

(3) 

paragraph 4 is deleted. 

Article 3 

Repeal of Commission Delegated Regulation (EU) 2022/1288  

Commission Delegated Regulation (EU) 2022/1288 of 6 April 2022 is repealed. 

Article 4 

Entry into force and application 

This Regulation shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union. 

It shall apply from [18 months after entry into force]. 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

EN 

48 

  EN 

 
LEGISLATIVE FINANCIAL AND DIGITAL STATEMENT 

1. 

1.1. 

1.2. 

1.3. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE ................................................. 3 

Title of the proposal/initiative ...................................................................................... 3 

Policy area(s) concerned .............................................................................................. 3 

Objective(s) .................................................................................................................. 3 

1.3.1.  General objective(s) ..................................................................................................... 3 

1.3.2.  Specific objective(s) ..................................................................................................... 3 

1.3.3.  Expected result(s) and impact ...................................................................................... 3 

1.3.4. 

Indicators of performance ............................................................................................ 4 

1.4. 

1.5. 

The proposal/initiative relates to: ................................................................................. 4 

Grounds for the proposal/initiative .............................................................................. 4 

1.5.1.  Requirement(s) to be met in the short or long term including a detailed timeline for 

roll-out of the implementation of the initiative ............................................................ 4 

1.5.2.  Added value of EU involvement. ................................................................................. 5 

1.5.3.  Lessons learned from similar experiences in the past .................................................. 5 

1.5.4.  Compatibility with the multiannual financial framework and possible synergies with 
other appropriate instruments ....................................................................................... 5 

1.5.5.  Assessment of the different available financing options, including scope for 

redeployment ................................................................................................................ 6 

1.6. 

1.7. 

2. 

2.1. 

2.2. 

2.2.1. 

2.2.2. 

Duration of the proposal/initiative and of its financial impact .................................... 7 

Method(s) of budget implementation planned ............................................................. 7 

MANAGEMENT MEASURES................................................................................... 8 

Monitoring and reporting rules .................................................................................... 8 

Management and control system(s) ............................................................................. 8 

Justification of the budget implementation method(s), the funding implementation 
mechanism(s), the payment modalities and the control strategy proposed .................. 8 

Information concerning the risks identified and the internal control system(s) set up 
to mitigate them............................................................................................................ 8 

2.2.3.  Estimation and justification of the cost-effectiveness of the controls (ratio between 

the control costs  and the value of the related funds managed), and assessment of the 
expected levels of risk of error (at payment & at closure) ........................................... 8 

2.3. 

3. 

3.1. 

4. 

4.1. 

4.2. 

Measures to prevent fraud and irregularities ................................................................ 8 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE .............. 9 

Heading(s) of the multiannual financial framework and expenditure budget line(s) 
affected ......................................................................................................................... 9 

DIGITAL DIMENSIONS ............................................................................................ 9 

Requirements of digital relevance ................................................................................ 9 

Data ............................................................................................................................ 10 

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1 

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4.3. 

4.4. 

4.5. 

Digital solutions ......................................................................................................... 12 

Interoperability assessment ........................................................................................ 12 

Measures to support digital implementation .............................................................. 12 

EN 

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1. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE  

1.1. 

Title of the proposal/initiative 

Proposal for a Regulation of the European Parliament and of the Council amending 
Regulation  (EU)  2019/2088  on  sustainability-related  disclosures  in  the  financial 
services sector 

1.2. 

Policy area(s) concerned  

Savings and Investments Union, European Green Deal, Sustainable Finance Strategy 

1.3. 

Objective(s) 

1.3.1.  General objective(s) 

The  first  general  objective  is  to  protect  the  integrity  of  the  EU  single  market  for 
sustainable finance by ensuring requirements which mitigate risks of greenwashing, 
and  to  better  help  investors  seize  opportunities  in  sustainability-linked  financial 
products.  The second general  objective is to  boost  the competitiveness of Europe’s 
financial  sector  by  ensuring  conditions  which  make  business  easier  and  help  to 
deepen  the  single  market  for  sustainability-linked  financial  products  and  thus  to 
efficiently allocate capital for Europe’s sustainable prosperity. Overall, this is set to 
ensure  a  better  use  of  the  potential  of  the  European  single  market  for  sustainable 
finance  to  contribute  to  funding  the  transition  towards  Europe’s  sustainable 
prosperity and competitiveness. 

1.3.2. 

Specific objective(s) 

Specific objectives 

The  first  specific  objective  is  to  simplify  and  reduce  the  sustainability-related 
administrative requirements of the SFDR for financial market participants, as well as 
to enhance the coherence of the framework for their operational needs. The second 
specific  objective  is  to  improve  end-investors’  ability  to  understand  and  compare 
sustainability-linked  financial  products.  The  specific  objectives  tackle  the  main 
problems  which  have  been  identified  both  for  financial  market  participants  on  the 
one hand, and for investors on the other, which inhibit their ability to, respectively, 
design  financial  products and deploy  corresponding  investments  in  an  efficient and 
effective manner toward the EU’s sustainability, competitiveness and other strategic 
policy goals.      

1.3.3.  Expected result(s) and impact 

Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted. 

Financial market  participants  and investors with  an interest  in  sustainable investing 
are  expected  to  benefit  from  a  simple  categorisation  for  all  products  with 
environmental, social and governance (ESG) objectives and features, with a common 
set  of  rules  regarding  ESG  claims  in  names,  marketing  communication  and  in  the 
distribution of such products. The categories would effectively cluster ESG financial 
products into three groupings depending on  their objectives and levels of ambition. 
End-investors would be better able to grasp whether a financial product is focused on 
contributing to a sustainability objective/made largely of sustainable assets, focused 
on helping companies to transition toward more sustainable practices, or integrating 
broader  or  lighter  ESG  strategies.  The  underlying  criteria  of  the  categories  would 

EN 

3 

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ensure  harmonised  minimum  ESG  performance,  notably  against  risks  deemed 
unacceptable  by  the  majority  of  sustainability-minded  investors,  thereby  increasing 
investors’ protection against greenwashing risks. The regulation would be clearer and 
simpler to apply than today, with lower costs and risks of national gold plating. The 
initial one-off costs would be offset by overall burden reductions expected to reduce 
recurring costs over the medium to longer term. Overall, the impacts are expected to 
boost  the  integrity  and  scale  of  the  EU  single  market  for  sustainable  finance  and 
encourage the efficient allocation of capital in line with the objectives of the savings 
and investments union.   

1.3.4. 

Indicators of performance 

Specify the indicators for monitoring progress and achievements. 

To  monitor  progress  towards  meeting  the  specific  and  general  objectives,  the 
Commission would work together with established processes underway notably with 
the  European  Supervisory  Authorities  (ESAs)  and  the  Platform  for  Sustainable 
Finance (PSF) to analyse:  

The  costs  incurred  by  the  industry  –  Supervisory  authorities  could  survey  and 
assess the implementation costs linked to the new categorisation system at the latest 
3  years  after  its  implementation.  This  assessment  could  also  monitor  the  cost 
reductions from the reduced disclosures. 

Possible  occurrences  of  greenwashing  in  EU  markets.  –  Building  on  existing 
processes, supervisory authorities could regularly continue to monitor occurrences of 
greenwashing,  continue  to  oversee  sustainability-related  claims  by  products,  and 
periodically survey investors to help assess the effectiveness of the revised SFDR as 
a tool against greenwashing and ensuring decision-relevant data for investors.  

Capital flows to sustainable investment – Building on the work of the Platform for 
Sustainable  Finance  to  monitor  capital  flows  to  sustainable  investment,  a  targeted 
analysis a few years after the implementation of the regime  could be carried out to 
assess  the  degree  to  which  the  categorisation  system,  together  with  the  simplified 
disclosures,  has  helped  boost  financing  toward  sustainable  economic  activities  and 
projects and helped lower the cost of capital linked to these. 

1.4. 

The proposal/initiative relates to:  

 a new action  
 a new action following a pilot project / preparatory action85  

 the extension of an existing action  

 a merger or redirection of one or more actions towards another/a new action 

1.5. 

Grounds for the proposal/initiative  

1.5.1.  Requirement(s) to be met in the short or long term including a detailed timeline for 

roll-out of the implementation of the initiative 

Once  agreed  by  co-legislators,  an  implementation  and  preparatory  period  would 
precede the entry into application of the revised SFDR framework. The transition to 
the  new  rules  would  be  facilitated  by  the  fact  that  the  proposals  build  on  existing 

85 

As referred to in Article 58(2), point (a) or (b) of the Financial Regulation. 

EN 

4 

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market  practices  and  regulatory  guidance  to  a  large  degree,  and  allow  for  a  further 
phasing-in period for financial products which are not subject to this guidance.    

1.5.2.  Added  value  of  EU  involvement  (it  may  result  from  different  factors,  e.g. 
coordination gains, legal certainty, greater effectiveness or complementarities). For 
the  purposes  of  this  section  'added  value  of  EU  involvement'  is  the  value  resulting 
from  EU  action,  that  is  additional  to  the  value  that  would  have  been  otherwise 
created by Member States alone. 

The need for a coherent common framework for sustainability-related disclosures for 
financial products across the EU was established as part of the original SFDR. The 
objectives remain fully valid, and enjoy broad stakeholder support. Without Union-
level  action  to  review  the  current  regime,  the  challenges  identified  with  it  would 
persist  in  the  shape  of  undue  complexity  and  a  lack  of  clarity  regarding  the 
sustainability-linked  features  of  available  financial  products,  negatively  impacting 
their credibility and uptake.      

To overcome these problems and boost the effectiveness and efficiency of the single 
market for sustainable finance products, the necessary simplification and adjustment 
of the existing SFDR framework can only be done in a coherent and effective way at 
EU  level.  Actions  by  Member  States  could,  in  contrast,  only  address  some  of  the 
identified issues, but  with the risk of fragmentation  of the single market  (diverging 
levels  of  transparency  between  national  markets,  growing  disparities  in  investor 
confidence  in  ESG  products  across  Member  States,  risks  of  more  barriers  and 
the 
challenges  for  cross-border  market  participants,  and  further 
comparability of products across the single market).   

limits 

to 

Action  at  EU  level  to  ensure  uniform  simplifications  and  a  common  set-up  for  the 
ESG-features  of  financial  products,  together  with  solutions  to  ESG  data-related 
challenges,  is  more  conducive  to  a  harmonised,  effective,  efficient  and  coherent 
outcome across the single market, and in support of the broader strategic objectives 
of  the  Union.  In  short,  EU  level  action  would  boost  the  proper  functioning  of  the 
single  market  for  sustainable  finance  and  in  addition  contribute  to  improving 
transparency for investors across the Union to enable their participation in EU capital 
markets in general, in line with the objectives of the Savings and Investments Union. 

1.5.3.  Lessons learned from similar experiences in the past 

The  lessons  learned  from  some  of  the  challenges  with  the  existing  rules  can  be 
summarised  as  the  need  to  (i)  ensure  a  coherent  implementation  timeline  for  the 
updated  changes,  (ii)  introduce  clearer,  simpler  and  more  proportionate  rules  and 
concepts for the benefit of financial market participants and investors, (iii) formalise 
and embedding these in a framework of product categories, to help cluster available 
products  in  this  way,  and  (iv)  ensure  that  the  revised  concepts,  rules  and  possible 
categories rely on ESG data that is available and/or possible to reliably estimate. 

1.5.4.  Compatibility with the multiannual financial framework and possible synergies with 

other appropriate instruments 

The review serves the objective of helping to mobilise funds toward the competitive 
opportunities  in  the  green  transition  and  other  evolving  strategic  priorities  in  line 
with Union objectives. As such, it can ease the pressure off public funds, which are 
increasingly stretched in terms of competing and new emerging priorities, to finance 
and  catalyse  funds  towards  sustainability  objectives.  Specific  co-investments  into 

EN 

5 

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relevant  EU  financial  programmes  are  also  encouraged  under  the  criteria  for  the 
product categories.  

1.5.5.  Assessment  of  the  different  available  financing  options,  including  scope  for 

redeployment 

N/A 

EN 

6 

  EN 

1.6. 

Duration of the proposal/initiative and of its financial impact 

 limited duration  

–    in effect from [DD/MM]YYYY to [DD/MM]YYYY  

–    financial  impact  from  YYYY  to  YYYY  for  commitment  appropriations  and 

from YYYY to YYYY for payment appropriations.  

 unlimited duration 

–  Implementation with a start-up period from 2027 to 2028, 

–  followed by full-scale operation. 

1.7.  Method(s) 

of 

budget 

implementation 

planned 

https://myintracomm.ec.europa.eu/corp/budget/financial-rules/budget-
implementation/Pages/implementation-methods.aspx 

 Direct management by the Commission 

–   by its departments, including by its staff in the Union delegations;  

–    by the executive agencies  

 Shared management with the Member States  

 Indirect management by entrusting budget implementation tasks to: 

–   third countries or the bodies they have designated 

–   international organisations and their agencies (to be specified) 

–   the European Investment Bank and the European Investment Fund 

–   bodies referred to in Articles 70 and 71 of the Financial Regulation 

–   public law bodies 

–   bodies governed by private law with a public service mission to the extent that 

they are provided with adequate financial guarantees 

–   bodies governed by the private law of a Member State that are entrusted with 
the  implementation  of  a  public-private  partnership  and  that  are  provided  with 
adequate financial guarantees 

–   bodies or persons entrusted with the implementation of specific actions in the 
common  foreign  and  security  policy  pursuant  to  Title  V  of  the  Treaty  on 
European Union, and identified in the relevant basic act 

–   bodies  established  in  a  Member  State,  governed  by  the  private  law  of  a 
Member  State  or  Union  law  and  eligible  to  be  entrusted,  in  accordance  with 
sector-specific  rules,  with  the  implementation  of  Union  funds  or  budgetary 
guarantees,  to  the extent that such bodies are controlled by public law bodies or 
by bodies governed by private law with a public service mission, and are provided 
with adequate financial guarantees in the form of joint and several liability by the 
controlling bodies or equivalent financial guarantees and which may be, for each 
action, limited to the maximum amount of the Union support. 

Comments  

N/A 

EN 

7 

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2. 

MANAGEMENT MEASURES  

2.1.  Monitoring and reporting rules  

N/A 

2.2.  Management and control system(s)  

2.2.1. 

Justification  of  the  budget  implementation  method(s),  the  funding  implementation 
mechanism(s), the payment modalities and the control strategy proposed 

N/A 

2.2.2. 

Information concerning the risks identified and the internal control system(s) set up 
to mitigate them 

N/A 

2.2.3.  Estimation  and  justification  of  the  cost-effectiveness  of  the  controls  (ratio  between 
the control costs  and the value of the related funds managed), and assessment of the 
expected levels of risk of error (at payment & at closure)  

N/A 

2.3.  Measures to prevent fraud and irregularities  

N/A 

EN 

8 

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3. 

3.1. 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE  

Heading(s)  of  the  multiannual  financial  framework  and  expenditure  budget 
line(s) affected  

N/A  

4. 

DIGITAL DIMENSIONS 

4.1. 

Requirements of digital relevance  

Reference to 
the 
requirement 

Requirement 
description 

Actor affected or 
concerned by the 
requirement 

High-level 
Processes 

Category 

Article 3 

Article 6 

Article 6a 

Articles  7(3), 
8(3) and 9(3) 

Article 9a 

Article 10 

on 
Transparency 
risk 
sustainability 
policies in relation to the 
integration 
of 
sustainability risks  

Financial  market 
participants 

Data 

on 

Transparency 
integration 
sustainability 
pre-contractual 
disclosures 
for 
financial products 

risks 

the 
of 
in 

all 

Financial  market 
participants 

Publishing 

Data 

the 

transparency 
Voluntary 
on 
integration  of 
sustainability  factors  in 
pre-contractual 
disclosures  for  products 
that  are  not  categorised 
sustainability-related 
as 
financial products 

on 
Transparency 
the 
compliance  with 
criteria  for  categorised 
sustainability-related 
financial products 

Transparency 
products 
categorised 
products  

for 
that  combine 
financial 

Transparency 
websites 
sustainability-related 

on 
on 

Financial  market 
participants 

Publishing  

Data 

Financial  market 
participants 

Publishing  

Data 

Financial  market 
participants 

Publishing 

Data 

Financial  market 
participants 

Publishing 

Data 

EN 

9 

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financial products  

Transparency  in  periodic 
reports  on  sustainability-
related financial products 

Article 11 

Financial  market 
participants 

Publishing 

Data 

Article 12a 

Data and estimates 

Financial  market 
participants 

Identification  Data 

Article 13 

Marketing 
communications 

Financial  market 
participants 

Identification  Data 

Article 18a 

of 
Accessibility 
information 
the 
European  single  access 
point 

on 

Financial  market 
participants 

Reporting 

Data 

4.2. 

Data 

Type of data 

Reference(s) to the 
requirement 

Standard and/or 
specification (if 
applicable) 

Data on sustainability risks for 
entities/products 

Articles 3 and 6  

N/A  

Data on sustainability factors for 
non-categorised products  

Article 6a 

Data on compliance with the 
criteria for categorised 
sustainability-related financial 
products 

Articles 7(3), 8(3) and 
9(3); Article 10; Article 
11(2) 

Subject to sectoral rules 
for pre-contractual 
disclosures 

Templates to be specified 
in implementing measures 

Data on products combining 
categorised financial products  

Article 9a 

Data on sources and estimates used 
for ascertaining compliance with 
the criteria for categorised products   

Article 12a 

Data submitted to European single 
access point 

Article 18a 

Alignment with the European Data Strategy 

N/A 

N/A 

Adjustment to the scope 
and timing of the existing 
requirement, to be 
specified in implementing 
technical standards 

EN 

10 

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The  revised  SFDR  will  support  the  general  objectives  of  the  European  Data  Strategy  as  it 
aims  to  ensure  that  data  collection  and  reporting  requirements  regarding  the  sustainability 
features  of  financial  products  will  be  significantly  simplified  compared  to  the  existing 
framework.  In  contrast  to  the  wider  scope  in  terms  of  products,  and  greater  number  of 
datapoints (and services) covered at present, the future rules would hinge on fewer datapoints 
for products which integrate or embrace ESG features in their design. In order to collect the 
relevant data, financial market participants’ reliance on digital data collection, processing and 
vending  platforms  and  their  own  deployment  of  in-house  digital  data  management  tools 
would  be  streamlined.  For  investors  and  their  own  deployment  of  digital  search  and 
comparison  tools,  disclosures  would  be  more  focused  on  the  most  meaningful  datapoints, 
facilitating  accessibility  (and  comparability)  of  key  data.  Both  for  financial  market 
participants  (preparers  of  product-data)  and  investors  (users  of  product-data),  the  use  of 
artificial intelligence tools, in accordance with the requirements and risk parameters of the AI 
Act,  would  be  facilitated.  To  streamline  data  collection  and  processing,  the  changes  are 
commensurate with those introduced under the ‘Omnibus I’ simplifications for sustainability 
data from corporates. In addition, the digital tagging of SFDR data at entity-level introduced 
under  Article  18a  of  the  Regulation  for  the  purposes  of  the  creation  of  a  European  single 
access point (ESAP) to help the publication of machine-readable information for investors is 
adjusted accordingly. 

Alignment with the once-only principle 

The data required for defined specific purposes for categorised sustainability-related financial 
products under the revised SFDR will be largely reusable between them (i.e. pre-contractual 
and  periodic  disclosures  for  financial  market  participants’  websites).  The  data  required  will 
principally  hinge  on  ensuring:  (a)  measurable  indicators  to  demonstrate  that  a  sufficient 
portion  of  financial  products’  investments  are  aligned  with  their  stated  sustainability 
objectives or attributes  and (b) compliance with  a set of mostly binary exclusions regarding 
sectors and activities which the products cannot invest in. The data choices for the first would 
largely  depend  on  financial  market  participants’  design  of  their  products,  and  those  for  the 
second would largely constitute a straightforward explanation to demonstrate that they do not 
invest  in  excluded  activities.  The  revised  rules  also  formalise  and  set  out  transparency 
requirements for the use of estimates for the purposes of, mostly, the first requirement, as well 
as  reliance  on  external  data  providers.  The  simplified  data  flows  facilitate  it  to  be  findable, 
accessible, interoperable and reusable, and to meet high-quality standards. 

Data flows 

Type of data 

on 

Data 
sustainability 
risks 
for 
entities/products 

Reference(s) 
the 
to 
requirement 

Actor  who 
provides 
the data 

Actor 
who 
receives 
the data 

Articles 
and 6  

3 

Financial 
market 
participants 

Investors, 
general 
public 

Trigger  for  the 
data exchange 

Frequency 
(if 
applicable) 

updating 
When 
information/when 
making  available 
financial 
products 

on 

Data 
sustainability 
factors  for  non-

Article 6a 

Financial 
market 
participants 

Investors, 
general 
public 

When  making 
available 
financial 

EN 

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products 

Articles  7(3), 
8(3) and 9(3); 
10; 
Article 
Article 11(2) 

Financial 
market 
participants 

Investors, 
general 
public 

When  making 
available 
financial 
products 

categorised 
products  

Data 
on 
compliance with 
the  criteria  for 
categorised 
sustainability-
related  financial 
products 

on 

Article 9a 

Financial 
market 
participants 

Investors, 
general 
public 

When  making 
available 
financial 
products 

Data 
products 
combining 
categorised 
financial 
products  

Data  on  sources 
estimates 
and 
used 
for 
ascertaining 
compliance with 
the  criteria  for 
categorised 
products   

Data  submitted 
European 
to 
single 
access 
point 

Article 12a 

Financial 
market 
participants 

Investors 

Request 
investor 

from 

Article 18a 

Financial 
market 
participants 

Investors, 
general 
public 

Publication 
FMP 

by 

4.3. 

Digital solutions 

N/A,  beyond  adjusted  requirement  to  submit  relevant  data  to  the  European  single  access 
point, already established in existing framework. 

4.4. 

Interoperability assessment 

N/A,  beyond  adjusted  requirement  to  submit  relevant  data  to  the  European  single  access 
point, already established in existing framework. 

4.5.  Measures to support digital implementation 

In  general,  data  requirements  under  the  revised  SFDR  are  supported  by  the  measures 
foreseen  to  support  digital  availability  of  corporate  sustainability  information  under 
Directive 2103/34/EU and Regulation (EU) 2020/85286. In addition, the Commission  will 
develop  disclosure  templates  in  implementing  measures  envisages  for  core  data  flows 

86 

Including those listed under section 4.5 of the  Legislative Financial and Digital Statement in annex to 
COM(2025) 81 final 

EN 

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envisaged for categorised financial products under this Regulation.   

EN 

13 

  EN