Understanding Article 8 SFDR Funds

In recent years, the emphasis on sustainable and responsible investing has grown significantly. This shift is driven by the increasing awareness among investors, regulators and the public of environmental, social and governance ("ESG") issues. One of the key regulatory frameworks shaping this environment is Regulation (EU) 2019/2088 of 27 November 2019 on the disclosure of information related to sustainability in the financial services sector (hereinafter referred to as the "SFDR"), which entered into force on 10 March 2021. The SFDR has the goal of strengthening the protection of end investors by increasing transparency and promoting sustainability in financial markets. It imposes an obligation on financial market participants and advisers to disclose information on how they integrate ESG factors into their risk processes. Article 8 funds, often referred to as "light green" funds, play a key role in this framework. (MAMO TCV lawyers, more at lexology.com)