Investment Institute

The market takes up the challenge of the SFDR

  • 09 July 2021 (5 min read)

The EU Sustainable Financial Disclosure Regulation (SFDR), which has just entered into force, is a watershed for sustainable finance. Initial data shows that the market has issued a prompt response to the regulatory challenge. This immediately turned into a new ground on which to compete.

The sustainable finance action plan launched by the European Commission in spring 20181 includes the fight against greenwashing among its main objectives: this is the practice by which some financial players, but also some companies, try to build an image through the communication of sustainability-focused subjects and in particular the environment, keeping silent on or diverting attention from behaviour that does not correspond to what is declared or reported. Forcing financial operators to put their money where their mouth is, in short, is what is required by a rule under the EU Action Plan which has just entered into force.

A watershed for sustainable finance

On 10 March, EU Regulation 2019/2088 on sustainability-related disclosure in the financial services sector2 came into force, better known as the SFDR (Sustainable Finance Disclosure Regulation). To guarantee savers and in general fair competition in the market, the SFDR requires operators (including asset management companies, pension institutions and insurance companies offering investment products) and financial advisors, to provide transparent communication on the way in which they integrate sustainability principles and criteria into their operations.

The SFDR represents a watershed, as before its introduction there were no specific regulatory obligations to be complied with by those who labelled financial products as sustainable. In particular, the market’s attention has honed in on investment products that fall within the cases set out under Article 8 of the SFDR (products that promote, among other things, environmental or social aspects) and by the more stringent Article 9 (products that have sustainable investments as an objective).

10 March 2021

Date of entry into force of EU Regulation 2019/2088 on sustainability-related disclosure in the financial services sector (Sustainable Finance Disclosure Regulation, or SFDR).

Main provisions of the SFDR:

Article 6 (for all financial operators and consultants).

Transparency on the integration of sustainability risks into the investment process.

Article 8 (for financial products that promote, among other things, environmental or social aspects).

Transparency of the promotion of environmental or social aspects in pre-contractual disclosure.

Article 9 (for financial products that have sustainable investments as their objective).

Transparency of sustainable investments in pre-contractual disclosure.2

Ready, set, go! The competition begins…

The advent of the SFDR was accompanied by some critical issues3 that will be expected to be resolved over time. In addition, all the provisions of the SFDR will only become fully operational in 20224 , for example those that are second level (L2) concerning the use of specific technical standards (RTS-Regulatory Technical Standard). Nonetheless, the way in which financial operators responded to regulatory obligations immediately attracted great interest5 and began to form a new ground on which to compete.

In Europe, it is estimated that approximately 21% of the financial instruments monitored fall under Articles 8 and 9 of the SFDR, for a value equal to approximately 25% of the total assets under management.

The response from AXA IM

AXA IM was ready for the appointment with the SFDR. As of March 2021, 90% of AXA IM's equity, bond and multi-asset strategies and funds were compliant with Articles 8 and 9 of the SFDR6 .

“The SFDR regulation requires us to classify our product range for greater transparency and these figures demonstrate how far advanced AXA IM is in its journey to becoming one of the world’s leading responsible investors.”, said Marco Morelli, Executive Chairman at AXA Investment Managers.

“The regulation also aims to ensure financial market participants take into account sustainability risks and principle adverse impact across the assets they manage, something we had already been doing for many years. Our Responsible Investment framework has significantly developed over time, including our exclusion policies and proprietary ESG scoring methodologies, combined with our active ownership and stewardship initiatives.”

“True ESG integration is now a reality and the era of sustainability is reaching into every asset class and every portfolio. ESG is a critical input to our investment decision making and we are proud of what we have achieved so far and are ambitious in our goals. With already 90% of the assets comprised in our eligible funds and strategies falling into the most demanding and stringent of the EU regulatory requirements, our existing product range further reflects our commitment to sustainable finance. We expect this figure to grow over time as we further develop our sustainable product offering including in our Alternatives product range.”

  • QWN0aW9uIHBsYW4gdG8gZmluYW5jZSBzdXN0YWluYWJsZSBncm93dGgsIEV1cm9wZWFuIENvbW1pc3Npb24sIDggTWFyY2ggMjAxOA==
  • IEVVIFJlZ3VsYXRpb24gMjAxOS8yMDg4IG9mIHRoZSBFdXJvcGVhbiBQYXJsaWFtZW50IGFuZCBvZiB0aGUgQ291bmNpbCBvbiBzdXN0YWluYWJpbGl0eS1yZWxhdGVkIGRpc2Nsb3N1cmUgaW4gdGhlIGZpbmFuY2lhbCBzZXJ2aWNlcyBzZWN0b3I=
  • IEVVIFJlZ3VsYXRpb24gMjAxOS8yMDg4IG9mIHRoZSBFdXJvcGVhbiBQYXJsaWFtZW50IGFuZCBvZiB0aGUgQ291bmNpbCBvbiBzdXN0YWluYWJpbGl0eS1yZWxhdGVkIGRpc2Nsb3N1cmUgaW4gdGhlIGZpbmFuY2lhbCBzZXJ2aWNlcyBzZWN0b3I=
  • RVNBcyBjb25zdWx0IG9uIHRheG9ub215LXJlbGF0ZWQgcHJvZHVjdCBkaXNjbG9zdXJlcywgMTcgTWFyY2ggMjAyMQ==
  • IFJlZ3VsYXRpb24gb24gc3VzdGFpbmFiaWxpdHktcmVsYXRlZCBkaXNjbG9zdXJlIGluIHRoZSBmaW5hbmNpYWwgc2VydmljZXMgc2VjdG9yLCBFdXJvcGVhbiBDb21taXNzaW9u
  • RVNHOiBHcmVlbiwgZ3JlZW5lciwgZ3JlZW5lc3QuLi4iLCBGdW5kcyBFdXJvcGUsIEFwcmlsIDIwMjE=

Related Articles


Four critical elements for asset managers to meet the biodiversity challenge


How investments are fueling the low-carbon economy

  • by AXA Investment Managers
  • 11 August 2023 (10 min read)

How volatile summer climates spur potential energy infrastructure investment opportunities

  • by AXA Investment Managers
  • 10 August 2023 (5 min read)


    This document is for informational purposes only and does not constitute investment research or financial analysis relating to transactions in financial instruments as per MIF Directive (2014/65/EU), nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities.

    Due to its simplification, this document is partial and opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee forecasts made will come to pass. Data, figures, declarations, analysis, predictions and other information in this document is provided based on our state of knowledge at the time of creation of this document. Whilst every care is taken, no representation or warranty (including liability towards third parties), express or implied, is made as to the accuracy, reliability or completeness of the information contained herein. Reliance upon information in this material is at the sole discretion of the recipient. This material does not contain sufficient information to support an investment decision.

    Issued in the UK by AXA Investment Managers UK Limited, which is authorised and regulated by the Financial Conduct Authority in the UK. Registered in England and Wales, No: 01431068. Registered Office: 22 Bishopsgate, London, EC2N 4BQ.

    In other jurisdictions, this document is issued by AXA Investment Managers SA’s affiliates in those countries. © 2021 AXA Investment Managers. All rights reserved.

    Are you an IFA or other Professional Investor ?

    Are you a financial advisor, institutional, or other professional investor?

    This section is for professional investors only. You need to confirm that you have the required investment knowledge and experience to view this content. This includes understanding the risks associated with investment products, and any other required qualifications according to the rules of your jurisdiction.