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ARTICLE · 05 DECEMBER 2025

SFDR Overhaul: Commission Proposes Simpler Rules And Three Product Categories

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The European Commission (the Commission) has released its long-awaited proposal (the Proposal) for a comprehensive revision of the Sustainable Finance Disclosure Regulation...

LuxembourgFinance and Banking
Aurélien Hollard
Aurélien Hollard
Julie Pelcé
Julie Pelcé
Julien Robert
Julien Robert
Margherita Armand-Hugon
Margherita Armand-Hugon
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Background

The European Commission (the Commission) has released its long-awaited proposal (the Proposal) for a comprehensive revision of the Sustainable Finance Disclosure Regulation1 (SFDR) to simplify requirements, curb greenwashing, and improve comparability for investors (SFDR 2.0). The Proposal replaces the current Articles 8/9 framework with three product categories calibrated around clear thresholds, exclusions and concise disclosures, and removes certain entity-level obligations to reduce costs and duplication with the CSRD2.

As a general matter, the Proposal introduces a wide range of new mechanisms that will require adaptation by investment funds managers. Although it aims to simplify administrative burdens, the Proposal creates additional layers for product discovery and comparability, and will imply a more careful operationalisation of disclosures, categorisation logic, and internal governance. This revision of SFDR will alter how products are

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