Presented on 20 November, these proposals came as little surprise to industry experts. A working document published a few days earlier had revealed the broad outlines. However, the scale of the changes announced should not be underestimated.
SFDR 2.0 revolutionises the categorisation of funds by abandoning references to ‘Article 8’ and ‘Article 9’ in favour of a new nomenclature:
Each of these categories must also comply with certain mandatory exclusions
Please note: the final names of these categories will be specified in a subsequent text.
The new version of the SFDR removes the obligation to take Principal Adverse Impacts into account at entity level. At financial product level, what was previously a requirement under the DNSH (Do No Significant Harm) principle for an investment to be classified as sustainable is now optional, replaced by exclusion obligations.
The regulation now imposes a strict two-page limit for the pre-contractual and periodic disclosures.
The pre-contractual disclosure must certify compliance with the minimum threshold of 70% and the exclusions required according to the SFDR category, while detailing the strategy implemented to meet these requirements.
The periodic disclosure sets out the achievement of objectives and the integration of sustainability factors, based on appropriate indicators.
Another notable simplification is the removal of ‘website disclosure’, the obligation to publish a dedicated document on the institution's website.
Before these new provisions come into effect, further steps are required: the Commission's proposal will now be negotiated by the co-legislators, namely the European Parliament and the Council of the European Union, and then a delegated act will be published to specify the names of the categories, criteria, etc., after consumer testing has been carried out. This process should be completed by the end of 2027 or early 2028.
Financial institution teams face a major challenge: adapting to new rules when the old ones are already perceived as obsolete and the future framework is neither applied nor fully stabilised. This transitional period requires rigorous regulatory monitoring, which is a prerequisite for operational transformation: new processes, revised regulatory reporting templates, team training, etc.
SFDR 2.0 places data at the heart of sustainability strategies. To meet the new exclusion requirements, financial institutions must rely on flawless data, manage growing volumes of information and control how it is processed. Without automation, this process is time-consuming and complex, as data is scattered across multiple public and private sources, which are often heterogeneous.
Despite its stated goal of simplification, SFDR 2.0 inevitably generates compliance costs. Institutions that have developed internal solutions for sustainability data management and reporting will likely have to overhaul them, often extensively, and therefore mobilise resources. Those that rely on consulting firms will have to budget for new services to ensure compliance.
Faced with the wave of regulations sweeping in at the end of 2025, WeeFin is staying the course: integrating each change transparently into its technology platform.
Our team of sustainable finance experts constantly monitors developments so that we can update our solution in real time. Users benefit from a data management module whose performance is universally recognised, ensuring that SFDR 2.0 is implemented on a reliable basis.
Finally, a key factor is that the integration of regulatory changes into the WeeFin platform is carried out at no extra cost to our customers.
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