The Sustainable Finance Disclosure Regulation (SFDR), which came into effect in 2021, aims to enhance transparency and comparability of sustainability disclosures within the financial services sector. It applies to both financial market participants (FMPs) and financial advisers (FAs) operating within the European Union. Financial market participants and financial advisers are required to provide detailed disclosures related to sustainability risks, including the disclosure of how environmental, social, and governance factors are integrated into their investment processes. Also, the SFDR also mandates to include information about how their remuneration policies align with the integration of sustainability risks and advice.

Regulation – 2019/2088 – EN – SFDR – EUR-Lex (europa.eu)