The SFDR is an EU regulation that aims to eradicate any form of greenwashing in ESG funds. Now that it has been delivered, data availability is crucial for SFDR to work.
It is well known that ESG data is a complex area – and in the case of SFDR, some of the information that the regime requires is not always readily available. As a result, data poses a major challenge when it comes to the fight against greenwashing.
Data limitations also mean that some funds with “robust” ESG processes do not fit into the greenest SFDR categories, known as articles 8 and 9. While the industry widely welcomes SFDR, some question whether the rules go far enough, and uncertainty remains regarding its implementation.
Our report speaks to specialists in the area of ESG investing and compliance about the challenges they face. It also finds that fund managers may have to redo part of the work done so far when technical standards are issued.
Meanwhile, investors in China have a whole other set of ESG issues of their own (see China Report April 2021).
Nick Fitzpatrick, Group Editor, Funds Europe
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