The Sustainable Finance Disclosure Regulation (SFDR) is a European Union (EU) regulation designed to create transparency in relation to sustainability risks, and reduce the potential for greenwashing of investment products, as well as increasing trust in financial markets.
It sets out clear rules and requirements related to sustainable investment disclosures for asset managers, fund managers and financial market participants.
It's influence on asset managers with funds in, or marketed into, the EU is noteworthy and it has already had a significant impact on asset managers in the UK.
SFRD report
The Unpacking SFRD report from KPMG International looks at the evolving regulatory landscape and identifies key signs of maturity amongst asset managers, providing actions to stay ahead of the market. The report delves into why SFDR matters to asset and fund managers, how they are managing the implementation of SFDR and the related impact on their investment strategies and operations.
The Sustainable Finance Disclosure Regulation (SFDR) is already helping to increase investment flows into sustainable activities in Europe and around the world. KPMG International surveyed 100 asset managers across North America, EMA, and ASPAC to understand how they are adapting to the regulations and drawing out value from the exercise.
We found some key trends in the market:
- Nearly half of the interviewed asset managers report that SFDR has a positive impact on their firm through increased transparency and streamlined ESG data processes
- Globally we continue to see an overwhelming increase in demand for funds which incorporate net zero / decarbonisation objectives
- To support the operationalisation of SFDR, a majority of asset managers start with an ESG engagement policy
- A large number of firms rely on internationally recognised frameworks to demonstrate their investments are making a contribution to sustainable investment objectives.
As regulation and investor expectations continue to evolve, we provide 5 “no-regret actions” for firms to build solid foundations:
- Create a strong policy foundation.
- Build flexible data systems and infrastructure.
- Ensure you have appropriate governance.
- Make it part of your culture.
- Stay on stop of the trends and look for strategic synergies.
Unpacking Sustainable Finance Disclosure Regulation
This report looks to identify the current state of the market with respect to SFDR implementation.
