Launched in 2019, the Sustainable Finance Disclosure Regulation (SFDR ) was intended to provide investors with a clear framework for comparing financial products on the basis of sustainability criteria. In practice, the distinction between the famous articles 6, 8 and 9 has served as a market classification, but without being designed as such, leading to numerous gray areas, heterogeneous use and risks of greenwashing.

Following several consultations and technical opinions, the European Commission is now preparing to propose a structural revision of the SFDR. At the heart of the debates: the creation of a new official classification of funds (with categories and minimum criteria), the introduction of a common sustainability indicator and better articulation with the CSRD, Taxonomy and PAI indicators.

This reform, expected by the end of 2025, should mark a major turning point for European sustainable finance, by clarifying the rules of the game and boosting investor confidence.

What’s happened so far, a new architecture taking shape:

Since it came into force in 2021, the SFDR has rapidly taken on a central role in the sustainable finance ecosystem.

However, the distinction between Article 6, 8 and 9 funds was not intended to constitute an official classification: they were primarily technical categories linked to transparency obligations. In practice, these articles were used as market labels, creating windfall effects, legal uncertainties and heterogeneous application by asset managers.

Faced with these abuses, the European Commission launched a public consultation in 2023 and mandated its technical bodies to propose solutions. This process involved three key stages:

• The recommendations of the three European Supervisory Authorities (ESAs – EBA, ESMA, EIOPA) (June 2024):
  • Proposal to create two voluntary categories for financial products:
    • Sustainable” funds , investing primarily in sustainable activities as defined by the Taxonomy and SFDR definitions;
    • Transition” funds, integrating transformation and progressive improvement strategies.
  • Introduction of a common sustainability indicator, expressed in a simple and comparable way, applicable to all financial products.
  • We recommend that these new categories be tested with retail investors before being rolled out, to ensure that they are understood and trusted.

• The contribution of the European Platform on Sustainable Finance (December 2024) :
  • Proposal for a slightly different architecture, in three categories:
    • “Sustainable”, for products aligned with clear sustainable objectives and significant thresholds;
    • “Transition”, for those accompanying a measurable improvement trajectory;
    • “ESG Collection”, for products incorporating ESG criteria without a strong commitment to sustainability or transition.
  • Introduction of an “unclassified” status for fonds that do not fall into any of the three categories.
  • Definition of minimum criteria (sustainable investment thresholds, exclusion of certain activities, compliance with DNSH and minimum safeguards).

The European Commission’s roadmap (2025) :

• • In its work program, the Commission has confirmed that it will present a legislative proposal to revise the SFDR in the fourth quarter of 2025.

This review will draw on the recommendations of the ESAs, the Platform’s proposals and the results of public consultations, in order to define the new regulatory architecture.

-> This process shows a gradual convergence: the “article 6/8/9” logic will be abandoned in favor of an official classification of sustainable financial products, structured around clear categories with minimum criteria and a common sustainability indicator.

What’s in store for the autumn and the rest of 2025

Autumn 2025 will be a pivotal moment for the reform of the SFDR. After more than two years of debate, the European Commission is about to take a decisive step.

• Finalization of the impact study
• • In spring 2025, the Commission launched a Call for Evidence to inform the impact assessment of the reform.
  • The aim of this exercise was to measure the costs and benefits of a new official classification, test different scenarios (2 or 3 categories, mandatory or voluntary sustainability indicator) and gather feedback from financial players, NGOs, national regulators and investors.
  • The results should feed into the final drafting of the legislative proposal.

• Expected trade-offs

Several key points remain to be decided:

• • Architecture with two or three categories: the ESAs advocate a simpler system (Sustainable / Transition), while the Platform would like to add an intermediate category (ESG Collection).
  • Minimum thresholds and criteria: what percentage of sustainable investments qualifies a fund as “Sustainable”? What are the mandatory indicators for “Transition” funds?
  • Common sustainability indicator: its form (pictogram, score, numerical indicator) and whether or not it should be mandatory remain to be defined.
  • Link with other regulations: consistency with the CSRD, Taxonomy and PAI indicators is essential to avoid duplication and maximize the usefulness of data.

Political calendar :

• • • October 2025: final internal discussions at the Commission, incorporating the opinions of technical departments and stakeholders.
    • Q4 2025: publication of the SFDR revision proposal in the Commission’s legislative program.
    • Once adopted, the text will be forwarded to the European Parliament and Council for examination and negotiation (probably in 2026).

-> In concrete terms, the next few months will be decisive: the Commission will have to strike a balance between simplicity, ambition and credibility, under pressure from two opposing camps:

• on the one hand, financial players calling for lower costs and clearer rules;
• on the other hand, NGOs and institutional investors are calling for a demanding and robust classification system, to limit greenwashing and maintain European leadership in sustainable finance.

Points to watch and implications for management companies

The revision of the SFDR is not just a technical exercise: it will have a direct impact on the product strategy, communication and governance of asset management companies. Several points deserve particular attention right now:

1. Anticipating the new classification
   • The “article 6/8/9” system should disappear in favor of official categories.
   • Each fund will have to be repositioned according to the new criteria(Sustainable, Transition, or other).
   • This means re-examining the consistency between name, strategy and legal documentation to avoid any risk of mismatch.
2. Aligning thresholds and criteria
   • Even if the minimum thresholds (percentage of sustainable investments, sector exclusions, DNSH requirements and social safeguards) have not yet been decided, it is prudent to test different scenarios.
   • Managers can already simulate portfolios with several threshold assumptions to identify funds “at risk” of downgrading.
3. Preparing for the sustainability indicator
   • The introduction of a common sustainability indicator is almost certain.
   • This means strengthening systems for collecting, consolidating and controlling ESG data, in order to produce robust, auditable figures.
4. Strengthening product governance
   • The new categories should be accompanied by more explicit and comparable criteria.
   • Management companies will need to put in place clear processes for validating funds, monitoring thresholds and managing deviations (escalation, communication, remediation).
5. Communication and customer relations
   • Investors will need to understand the logic behind the new classification.
   • We’ll need to prepare an educational speech explaining the difference between the old “article 8/9” categories and the new ones, and clarifying what each term covers.

-> In summary, the revision of the SFDR is both an opportunity and a risk:

• An opportunity to strengthen the credibility and comparability of sustainable financial products.
• A risk if the transition is poorly anticipated, with reclassified funds or a loss of customer confidence.

!! Timeline of the transition from the current classifications !!!

• Today (2025)
• • The Article 6, Article 8 and Article 9 categories remain in full force and effect.
  • The Commission has acknowledged that this system is used as a market classification system, even though it was not designed as such.
• Q4 2025
• • The European Commission is due to publish its legislative proposal for the revision of the SFDR, which will include the new official classification of funds (probably 2 or 3 categories).
  • This proposal will officially mark the end of the use of articles 6/8/9 as a reference system.
• 2026 – 2027
• • Legislative negotiations (European Parliament + EU Council).
  • Depending on precedents (initial SFDR, CSRD), it takes 12 to 24 months to reach an adopted text.
• 2027 – 2028 (estimate)
• • If the revised regulation is adopted in 2026, a phased implementation from 2027/2028 is the most likely scenario.
  • Articles 6/8/9 would be phased out and replaced by the new categories.
  • A transitional period is almost certain (e.g. 1 to 2 years) to give management companies time to adapt their prospectuses, DIC/PRIIPs and reporting.

Conclusion

The revision of the SFDR marks an important step for the future of European sustainable finance, aimed primarily at putting an end to a period of legal uncertainty and practical laxity.

The European Commission is preparing to present, by the end of 2025, a new framework that should structure the market around official categories, accompanied by minimum criteria and a common sustainability indicator.

But the level of ambition remains to be defined: between the desire for simplification expressed by certain players and the need to preserve the integrity of the market in the face of the risks of greenwashing, the balance seems compromised.

For management companies, the stakes are twofold:

• anticipate the reorganization of portfolios, documentation and communication,
• be prepared to robustly justify the thresholds and commitments that will underpin the new classification.

-> The revision of the SFDR will therefore be a full-scale test of Europe’s ability to combine competitiveness, transparency and sustainability within a regulatory framework that is both demanding and operational.

! To remember:

• There is as yet no official date for the abolition of articles 6/8/9.
• The Commission will announce the exact timetable in its Q4 2025 proposal.
• Current indications suggest that articles 6/8/9 will remain applicable until at least 2027, with a gradual switchover thereafter.

Our other articles on similar subjects: SFDR – three years after its entry into force

Sources :

European Commission – Sustainable finance, Newsletter; https://finance.ec.europa.eu/news/sustainable-finance-2025-05-21_en

European Commission – Public consultation & Call for Evidence on the revision of the SFDR; https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/14086-Standard-forms-for-the-publication-of-notices-in-the-field-of-public-procurement-eForms-3rd-Amendment_en

Joint ESAs (EBA, ESMA, EIOPA) – Opinion on the review of the SFDR framework (June 18, 2024); https://www.esma.europa.eu/press-news/esma-news/esas-propose-improvements-sustainable-finance-disclosure-regulation

European Sustainable Finance Platform – Report on product categories and classification (December 17, 2024); https://finance.ec.europa.eu/document/download/8a3d0e56-4453-459b-b826-101b1067290f_en?filename=241217-sustainable-finance-platform-proposal-categorisation-products_en.pdf

European Commission – Work Program 2025; https://commission.europa.eu/strategy-and-policy/strategy-documents/commission-work-programme/commission-work-programme-2025_en?utm_source=chatgpt.com

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