Offering ESG funds in EU: the Sustainable Finance Disclosure Regulation (SFDR)

May 2023

The detailed (level 2) requirements of the Sustainable Finance Disclosure Regulation (SFDR) started to apply on 1 January 2023, and is mandatory for all funds (EU and non-EU) being offered to investors (e.g. institutional investors, LPs) in the EU. The SFDR aims to address concerns about ‘greenwashing’ by increasing transparency and comparability on sustainability disclosures at the fund, such as prospectus, private placement memorandum, and entity level. This enables investors to make better-informed investment decisions and direct investments towards more sustainable activities.

Companies may choose to apply the SFDR on a voluntary basis to better demonstrate the fund’s ESG characteristics. Furthermore, funds that meet the SFDR requirements will be deemed to have generally complied with the ESG disclosure guidelines issued by Hong Kong’s Securities and Futures Commission.

Read more about how PwC helps develop clients’ ESG investment frameworks and disclosure documentation.