Sustainable Finance Disclosure Regulation
The Sustainable Finance Disclosure Regulation (SFDR) was adopted in November 2019 as part of the EU’s Action Plan on Sustainable Finance. It aims to address a perceived lack of transparency and objectivity on how institutional investors, investment managers and financial advisors consider sustainability aspects in their investment decision making.
SFDR significantly impacts investors, asset managers and advisors in real estate investment funds. Classifications of investment funds under Articles 6, 8, and 9 (6 being less ‘green’, and 9 more ‘green’) are designed to prevent greenwashing and protect against misleading investors. The SFDR also introduces entity-level disclosure, including the PAI statement, obliging companies to consider adverse sustainability indicators, encompassing real estate asset aspects such as exposure to fossil fuels and energy-inefficient properties. For real estate investment funds, the failure of SFDR to accommodate transition strategies has been a major challenge.
Documents
EREF does not take positions on regulatory issues. However, many participating organisations have developed their own positions. To learn more, please view the individual participating organisations’ websites.
Disclaimer
The content and views expressed in the documents published on this website are the sole responsibility of the undersigned organisations of concerning document and may not represent the views of all participants in this Forum.
Corporate Sustainability Reporting Directive
The Corporate Sustainability Reporting Directive (CSRD) was formally adopted in 2022, marking the beginning of a new era in corporate sustainability reporting. The new CSRD applies to a drastically larger scope of companies (about 50,000 more than under the previous Non-Financial Reporting Directive) across all sectors, including the real estate sector.
The European Financial Reporting Advisory Group (EFRAG) was designated as the technical advisor to the European Commission, tasked with developing the European Sustainability Reporting Standards (ESRS) for application by all companies governed by the CSRD. These standards encompass a broad spectrum of environmental, social, and governance (ESG) issues, including climate change, biodiversity, and human rights. They aim to furnish investors with crucial information about the sustainability impacts of the companies in which they invest. The Commission adopted the ESRS framework in July 2023, while the CSRD rules began to apply gradually from 1 January 2024.
Documents
EREF does not take positions on regulatory issues. However, many participating organisations have developed their own positions. To learn more, please view the individual participating organisations’ websites.
Disclaimer
The content and views expressed in the documents published on this website are the sole responsibility of the undersigned organisations of concerning document and may not represent the views of all participants in this Forum.