IIGCC Position Paper on the Revised Sustainable Finance Disclosure Regulation (SFDR 2.0)

This position paper focuses on the revised Sustainable Finance Disclosure Regulation (SFDR 2.0), which were proposed in November 2025. The proposed regulation aim to deliver an overarching aim to increase transparency and reorient capital flows towards a more sustainable and competitive economy. 

Overall, the proposed revisions are welcome, accounting for feedback from financial market participants (FMPs), better recognising the critical role of transition-related investment strategies, and addressing implementation issues.

In particular, the IIGCC welcomes:

• the introduction of a clear sustainability-related product categories, including a dedicated category for transition-focused investment strategies;

• the replacement of the overarching ‘sustainable investments’ definition, with specific definitions for each of the sustainability-related product categories;

• explicit requirements for climate-focused funds to align their ambition with the goals of the Paris Agreement; and

• the reduction of reporting complexity and burden through the removal of certain entity-level disclosure requirements.

However, in line with the objectives of the review, we believe that there are opportunities to further enhance the clarity and coherence of the framework and provide investors with the information they need to allocate capital efficiently. This position paper, developed by the IIGCC and supported by our members, sets out targeted and workable recommendations in support of these goals.

The paper sets out five recommendations: 

1. Preserve a streamlined set of entity-level disclosures under SFDR 
2. Establish a baseline set of decision-useful sustainability indicators for mandatory disclosure, to promote comparability across fund disclosures 
3. Integrate stewardship requirements across each of the sustainability-related product categories 
4. Include an explicit focus on asset level alignment for the Transition category, to complement focus on portfolio-level targets and support real economy decarbonisation 
5. Preserve access to corporate disclosures needed to meet SFDR reporting obligations, and ensure coherence between SFDR and the wider regulatory framework 

IIGCC welcomes the opportunity to engage with co-legislators to ensure the SFDR is simple and straightforward to implement, while delivering on its overarching aim to increase transparency and reorient capital flows towards a more sustainable and competitive economy.