On 20 November 2025, the European Commission proposed major changes to the Sustainable Finance Disclosure Regulation (SFDR) to simplify disclosures and strengthen investor protection. The new framework introduces three product categories—Transition, Sustainable, and ESG Basics—each requiring a 70% investment commitment and exclusion of harmful industries. Simplified two-page templates will replace current disclosure rules, and entity-level obligations like principal adverse impacts are removed.
Only products in these categories may use sustainability-related terms in marketing. Taxonomy disclosures become optional, with a 15% safe harbor for aligned assets. Application is expected 18 months after adoption, likely in 2028, marking a significant shift toward clearer, stricter sustainability standards.