Strategy & Reporting

SFDR & EU Taxonomy

What is SFDR?

The Sustainable Finance Disclosure Regulation (SFDR) was introduced as part of the EU’s Action Plan on Sustainable Finance. Its objective is to increase transparency on the integration of sustainability risks and opportunities into the investment decisions and standardize disclosure – thereby supporting Financial Market Participants (FMPs) in their transition. It mandates a series of sustainability-disclosure requirements on how ESG factors are integrated at both the entity and product level.

SFDR applies to FMPs (including asset managers) and Financial Advisors actively promoting products in the EU.

What is EU Taxonomy?

The EU Taxonomy Regulation is a classification tool that seeks to:

  • provide a standardized classification for sustainable activities across the EU
  • prevent greenwashing by helping investors and companies to make informed investment decisions on environmentally friendly activities.

It establishes a list of sustainable economic activities across 6 environmental objectives:

  • climate change mitigation
  • climate change adaptation
  • sustainable use and protection of water and marine resources
  • transition to a circular economy
  • pollution prevention and control
  • protection and restoration of biodiversity and ecosystems

To be considered aligned, an economic activity needs to contribute to one of the 6 environmental objectives, not significantly harm any other and meet minimum social safeguards.

The EU Taxonomy requirements will apply to financial and non-financial companies that fall within the scope of the Non-Financial Reporting Directive (NFRD), i.e. those with more than 500 employees. Financial market participants (including asset managers) will have to disclose to what extent the activities that their financial products fund meet the EU Taxonomy criteria by January 2024.

How can Longevity help you?

Our team of experts have ample experience in assessing the disclosure requirements and assisting our clients in delivering these on time and with ease.

Our SFDR and EU Taxonomy services include:

  • Roadmap: an assessment of your current disclosure practices to develop a tailored roadmap, including key milestones in your disclosure journey
  • Disclosures: data management and reporting support covering PAI, Article 8/9 disclosure, EU Taxonomy eligibility and alignment assessments
  • Ongoing Advisory: provide ongoing support through updates and dedicated workshops, as well as continued availability to answer queries throughout the disclosure process
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