The latest component of the European Commission’s sustainable finance action plan went live last month, leaving pension funds in key EU jurisdictions uncertain about precisely what the rules will mean, IPE research finds.
According to Morningstar, SFDR (the Sustainable Finance Disclosures Regulation) forms a “critical part of operationalising the action plan and will distinguish more clearly between different kinds of sustainable investing”.
SFDR applies to a range of “financial market participants”, including asset managers, banks, insurers and pension funds. There was some initial opposition to subjecting pension funds to the same rules as large commercial financial entities when in many cases pension funds do not compete for business, but as one Dutch lawyer told IPE, that battle was lost.