The European Union issued Ordinance (EU) 2019/2088 concerning sustainability-related disclosure obligations in the financial services sector (SFDR):

https://eur-lex.europa.eu/legal-content/DE/TXT/PDF/?uri=CELEX:32019R2088&from=DE 

SFDR gives financial market participants a framework for reporting how environmental, social, and governance-related factors (ESG factors) are handled within the overall company as well as for individual products.

This allows customers to more easily compare how financial market participants deal with important sustainability topics such as climate change.

Financial market participants will report in greater detail how sustainable their financial products are, which improves comparability. This includes:

• Consideration of sustainability risks such as the risk of value losses of the basic assets of the fund portfolio based on environmentally related or social incidents;
• Consideration of the most important negative effects of investment decisions on sustainability with respect to environmental, social, and human resources but also in conjunction with human rights, corruption, and bribery.
• Sustainable investments in business activities that contribute to the attainment of ecological and social goals. This includes activities that are deemed sustainable pursuant to EU taxonomy.

Introduction of Art. 8 and Art. 9 financial products.

The disclosure ordinance covers two categories of financial products – so-called Art. 8 and Art. 9 financial products

An Art. 8 financial product is a product that advertises ecological or social features.

An Art. 9 financial product is a product that pursues sustainable objectives.

In the future, financial market participants are obliged, according to the disclosure ordinance, to submit a statement concerning the principal adverse impacts (PAI) of investment decisions on sustainability factors.

Level 2 ordinance

The three European financial market authorities EBA, EIOPA, and ESMA – collectively the European Supervisory Authorities (ESA) presented the European Commission on October 22, 2021, with their final report containing drafts for technical regulation standards (RTS drafts) concerning the ordinance on the disclosure of sustainable financial products (Sustainable Finance Disclosure Regulation – SFDR) in the applicable taxonomy ordinance.

The disclosures relate to financial products that execute sustainable investment that contribute to environmental objectives.

"The European Commission adopted on 6 of April a technical standards to be used by financial market participants when disclosing sustainability-related information under the Sustainable Finance Disclosures Regulation (SFDR)."

Main Document:

https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32022R1288

Additions:

https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32023R0363

Annexes

https://www.esma.europa.eu/sites/default/files/2023-03/C_2022_7545_F1_ANNEX_EN_V3_P1_2289249.docx