The European Commission has proposed amendments to the Sustainable Finance Disclosure Regulation (SFDR) to simplify the EU’s transparency framework for financial products with environmental or social aims and make disclosures more usable, including for retail investors. A Commission review found that current SFDR disclosures are often too long and complex, limiting investors’ ability to understand and compare products. It also concluded that SFDR has been used as a de facto labelling system, creating confusion, particularly for retail investors, and increasing the risk of greenwashing and mis-selling. The proposal is intended to reduce disclosure requirements and associated costs for product providers, while supporting retail participation in EU capital markets and channeling funds towards sustainable objectives in line with the savings and investments union. The Commission published the text of the proposal alongside an impact assessment and supporting materials, including frequently asked questions and a timeline and stakeholder feedback package.
European Commission 2025-11-20
European Commission proposes amendments to SFDR to simplify sustainable finance disclosures for investors
The European Commission has proposed amendments to the Sustainable Finance Disclosure Regulation (SFDR) to simplify the EU’s transparency framework for financial products with environmental or social aims. The proposal aims to reduce disclosure complexity and costs, address confusion from SFDR's use as a de facto labelling system, and mitigate greenwashing risks, thereby enhancing retail investor participation in EU capital markets.