SFDR 2.0: A reset of the EU Sustainable Finance Disclosure Framework

The SFDR, in force since March 2021, introduced disclosure obligations for financial market participants on the integration of sustainability risks and the consideration of adverse impacts at entity and product level. It also required additional disclosures for products promoting environmental or social characteristics (Article 8) or pursuing a sustainable investment objective (Article 9).

However, the EU Commission’s review of the SFDR has shown that the framework would benefit from greater clarity, usability and alignment with the overall EU sustainable finance architecture.

Key issues identified by SFDR implementation

A comprehensive assessment by the EU Commission identified several shortcomings:

Current SME burden under SFDR is estimated at €163M annually:

• €43M 

  from entity-level disclosures

• €120M 

  from product-level disclosures¹

¹ SFDR 2.0 Proposal – published 20 November 2025

SFDR evolution timeline: Key milestones shaping the new disclosure framework

Visual overview of the major policy steps that led to the SFDR 2.0 Proposal and its upcoming implementation

 

Key changes introduced by the SFDR 2.0 proposal

Below is an overview of the main regulatory changes proposed by the European Commission to simplify the framework and enhance clarity for investors:

The SFDR 2.0 Proposal represents a structural redesign of the EU sustainability disclosure framework, aiming to deliver clearer, more reliable and more comparable information to investors. By strengthening safeguards against greenwashing, in line with the direction set by ESMA’s Guidelines on fund names,  the new regime seeks to enhance trust and transparency across financial products.

Beyond simplifying the framework, the reform is expected to lead to clearer and shorter disclosures for investors, reduce overlap with other EU sustainability reporting rules, lower compliance costs for financial providers, and further strengthen protection against greenwashing.

The Proposal will now be examined by the European Parliament and the Council, after which a limited set of implementing acts will specify the technical details and disclosure templates required for application.

How Forvis Mazars can help

Navigating the transition from the existing SFDR framework to the revised SFDR 2.0 regime presents important strategic and operational considerations. Forvis Mazars is well positioned to support financial market participants in managing this transition effectively:

	SFDR 2.0 Assessment & Product Categorisation Independent review of existing product classifications and disclosures Mapping of financial products to the new SFDR 2.0 categories Gap analysis against new thresholds, exclusions and naming requirements, including benchmarking Prioritization of transition actions based on regulatory impact and product strategy
	Transition Strategy & Product Re-Design Development of a tailored SFDR 2.0 transition roadmap Re-design of investment, sustainability and control frameworks to meet the new category requirements Comprehensive updating of product documentation, including KIDs, prospectuses, marketing materials, website disclosure sections and portfolio management guidelines Establishment of implementation timelines aligned with regulatory expectations
	Implementation Support Enhancements to governance structures, policies, procedures and ESG methodologies Review and preparation of pre-contractual, periodic and website disclosures Targeted training for product, ESG, compliance and distribution teams
	Post-Implementation Assurance Independent validation of SFDR 2.0 classifications and disclosures Testing of ongoing compliance with thresholds, exclusions and sustainability indicators Review of naming, marketing and sustainability claims Compliance support as delegated acts and regulatory guidance evolve

Regulatory references