Sustainable Finance Disclosure RegulationSFDR
SFDR currently classifies products under Articles 6, 8 and 9. In November 2025 the Commission proposed replacing them with three categories: Sustainable, Transition and ESG Basics. The Council adopted its negotiating mandate on 24 June 2026. Parliament is developing its position and trilogues had not concluded.
- Instrument
- Regulation (EU) 2019/2088
- Applies since
- 10 March 2021
- Current classifications
- Articles 6, 8 and 9
- Proposed replacement
- Sustainable / Transition / ESG Basics
- Not yet law
- Council mandate
- 24 June 2026
- Expected agreement
- Q4 2026 – Q1 2027
- Subject to trilogue
Where these figures come from
SFDR 2.0 is a proposal in trilogue, not a rule
The three-category model (Sustainable, Transition, ESG Basics) appears in the Commission proposal of November 2025. The Council published its negotiating mandate on 24 June 2026. Parliament is developing a separate position. Trilogues were expected to begin in Q4 2026 with agreement anticipated Q4 2026 or Q1 2027. Until trilogue concludes, Articles 8 and 9 remain the operative labels and the category thresholds can still change.
SFDR requires financial market participants and advisers to disclose how sustainability risks are integrated into investment decisions and to classify products under Articles 6, 8 and 9. It has applied since 10 March 2021. In November 2025 the Commission proposed a comprehensive revision — SFDR 2.0 — replacing the Article 8/9 framework with three categories: Sustainable, Transition and ESG Basics. The Council adopted its negotiating mandate on 24 June 2026. The proposal is not law and its final shape is not settled.
The three proposed categories
Under the Commission's proposal, Sustainable products would need clearly defined and measurable objectives. Transition products would finance a shift towards sustainability — referencing Climate Transition or Paris-aligned benchmark pathways, issuers with credible transition plans, or structured engagement. ESG Basics would cover products that integrate sustainability factors beyond risk management, such as best-in-class screening, without a transition or sustainability objective.
Each category carries defined thresholds, criteria and mandatory exclusions. The current Article 8/9 split is a disclosure regime; the proposed categories include entry requirements.
Proposal status and penalty attribution
The category names Sustainable, Transition and ESG Basics are not in force. A fund cannot be classified as an ESG Basics product under current law.
Penalties sit with national competent authorities. Figures circulated as EU-wide SFDR maximums could not be traced to the regulation.
Penalties
Enforced by national competent authorities under national law. There is no EU-level SFDR fine.
No harmonised EU penalty
SFDR does not set a European maximum. Supervision and sanctions sit with each member state's competent authority under its own framework.
National maximums not listed here
Per-country figures have not been traced to national instruments for this entry, so none are shown. A widely repeated '10% of turnover' figure could not be traced to a primary source.
Does this apply to you?
Applies to financial market participants and financial advisers, and to the products they offer in the EU.
- Asset managers, insurers, pension providers and investment firms offering products in the EU
- Financial advisers providing investment or insurance advice
- Product-level duties attach to each fund or mandate, entity-level duties to the firm
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Common questions
- Are Article 8 and Article 9 being abolished?
- That is the Commission's proposal, not the law. SFDR 2.0 would replace them with three categories — Sustainable, Transition and ESG Basics. The Council agreed a negotiating mandate on 24 June 2026 and trilogues had not concluded, so Articles 8 and 9 remain operative.
- When will SFDR 2.0 apply?
- No application date exists yet. Agreement on a final text was expected around Q4 2026 or Q1 2027, and an application date would follow that, typically after a transition period.
- What is the fine for breaching SFDR?
- There is no EU-level figure. Sanctions are set and applied by national competent authorities under national law.