EU Institutions Debate SFDR 2.0 Reform with Focus on Fossil Fuel and Investment Fund Exemptions
The European Union is in the process of reforming the Sustainable Finance Disclosure Regulation (SFDR) with a proposal to replace the current framework with three voluntary categories: Sustainable, Transition, and ESG Basics. The reform aims to address fossil fuel exposure and exemptions for alternative investment funds offered exclusively to professional investors. The European Commission, Council of the European Union, and European Parliament are negotiating the specifics, with the Council proposing a softer stance on fossil fuel exclusions and the European Parliament yet to finalize its position. The reform is expected to extend the application period from 18 to 24 months following its entry into force. 
