EU Sustainable Finance Legislative Impact on Private Funds Guide

This document is a guide that outlines the legislative impact of the EU Sustainable Finance Disclosure Regulation (SFDR) on private funds. It details the requirements for firms regarding sustainability disclosures, which have been in effect since March 2021. The SFDR aims to enhance transparency in sustainability-related investments and to standardize disclosure practices among financial market participants. The guide explains the scope of application for the SFDR, including the obligations for both entity-level and product-level disclosures. It also describes the integration of the Taxonomy Regulation into the SFDR framework and the implications for firms' governance and risk management practices. Furthermore, the document notes the upcoming consultation on SFDR, which may lead to amendments aimed at improving the regulatory framework and addressing issues such as greenwashing. Specific disclosure requirements are summarized, including sustainability risk policies and principal adverse impact statements, which firms must publish to comply with SFDR mandates.