EU SFDR & UK SDR

In Europe, SFDR 2.0 is set to overhaul sustainable finance disclosures by replacing Article 8/9 with strict product categories (“sustainable,” “transition,” and “ESG basics”) and streamlining disclosures to combat greenwashing—changes expected to apply from 2028.

Meanwhile in the UK, SDR reforms are progressing quickly, with UK SRS‑aligned disclosures and climate reporting expected for accounting periods beginning in 2026. Together, these frameworks will significantly reshape investor communications, product strategy, and compliance obligations across financial services.

We help asset managers, financial institutions, and corporates understand the interplay between SFDR and SDR, assess product‑level impacts, and prepare for categorisation, governance upgrades, and disclosure redesign.

What is EU SFDR and UK SDR and who it applies to?

The EU SFDR is a regulatory framework requiring financial market participants to disclose sustainability risks and impacts, aiming to improve transparency, reduce greenwashing, and guide capital toward sustainable investments. SFDR applies to asset managers, insurance companies, pension providers, investment firms, and other entities offering financial products in the EU.

The UK Sustainability Disclosure Requirements (SDR) is a framework designed to enhance the transparency and sustainability of financial products and services. It applies to a wide range of entities, including asset managers, distributors, fund managers, and other firms involved in sustainable investment products.

Greg Stinson

Partner, Accounting Advisory Services

KPMG in the UK

mail
call

Subscribe to ESG insights

Other sustainability regulations

Practical, data-driven assistance designed to enhance your climate and non-financial reporting — from comprehensive carbon inventories to the development of metrics across various non-financial domains. We support you in ensuring your disclosures are complete, reliable and aligned with stakeholder expectations, regulatory standard and prepared for assurance with confidence.

eco

CBAM

The Carbon Border Adjustment Mechanism (CBAM) is an EU regulation requiring importers of certain goods to report embedded emissions and, over time, pay a carbon price aligned with EU standards. We help organisations meet these requirements by assessing CBAM exposure, establishing robust emissions data and reporting processes, and implementing compliance frameworks—while identifying opportunities to reduce costs and strengthen decarbonisation strategies.

thermostat

Circularity

Circularity reporting requires organisations to measure and disclose how materials and resources are sourced, used, and recovered across the value chain. We support your organisation in the measurement, management, and reporting of circular inputs, product use and end-of-life outcomes as these transition from estimates to auditable, comparable metrics.

water_drop

Water

Water reporting requires organisations to identify and assess water‑related risks, impacts, and dependencies. This includes applying materiality assessments, defining system and geographic boundaries, and developing disclosures on water withdrawals, consumption, discharge, and exposure. We help ensure water information is contextualised into disclosures that are supported by operational and value-chain realities.

card_travel

Other Non-financial Reporting

Organisations are increasingly required to identify and disclose how nature and social factors affect performance and long‑term value creation. We support you in developing consistent quantitative and qualitative disclosures across these areas by identifying material risks and dependencies and defining boundaries.