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ARTICLE · 26 MAY 2026

Investment Management Client Alert May 2026

K&L Gates
K&L Gates
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European financial regulators are advancing major reforms across sustainable finance disclosure, investment firm risk management, and ESG ratings oversight. From stricter sustainability reporting requirements under SFDR 2.0 to streamlined fund reporting frameworks and new endorsement rules for third-country ESG ratings, these developments signal a significant shift in regulatory expectations for asset managers, investment firms, and rating providers operating in EU markets.

GermanyFinance and Banking
Philipp Riedl
Philipp Riedl
Hilger Von Livonius
Hilger Von Livonius
Martin Berg
Martin Berg
Susanne Albrecht-Roggenstroh, Dipl.-Kffr.
Susanne Albrecht-Roggenstroh, Dipl.-Kffr.

ECON Committee Report on SFDR 2.0

On 28 April 2026, the European Parliament’s Committee on Economic and Monetary Affairs (ECON Committee) published the draft of its report on the revision of the Sustainable Finance Disclosure Regulation (SFDR 2.0).

Among other things, the report proposes that SFDR 2.0 should also apply to packaged investment products within the meaning of the PRIIPs Regulation. This would, for example, also include structured securities.

Stricter requirements are also proposed with regard to the principal adverse impacts of investment decisions on sustainability factors (PAIs). One proposal provides that products under Article 8 of SFDR 2.0, “ESG Basics,” should also be required to disclose mandatory PAIs. These mandatory PAIs would apply to all product categories.

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