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Download the PDF to learn about the quality of sustainability disclosures in EY Luxembourg’s latest SFDR Barometer 2025.
In brief
- Funds allocating over 70% of their portfolios to sustainability investments tend to produce higher-quality sustainability reports.
- Voluntary limited assurance boosts the credibility of disclosures and strengthens stakeholder trust.
- Proactive adaptation to SFDR 2.0, including new principle adverse impact (PAI) indicators, improves compliance and positioning.
- Around 40% of Article 8+ funds show potential to transition to Article 9, attracting more sustainable investors.
- Thirty percent (30%) of funds provide comprehensive disclosures and demonstrate a strong commitment to sustainability.
Adopted in 2021 by the European Union, the Sustainable Finance Disclosure Regulation (SFDR) is the foundation of the EU’s sustainable finance agenda, aimed at increasing transparency and accountability regarding sustainability-related information in the financial sector.
SFDR periodic disclosures are currently the main reference for evaluating asset managers’ sustainability performance, but they often lack mandatory third-party audits. This absence of verification leads to inconsistent quality across funds. Such variability increases the risk of greenwashing and may expose investors to reputational harm.
The EY Luxembourg SFDR Barometer evaluates the quality of sustainability disclosures among financial institutions, focusing on alignment with SFDR’s Regulatory Technical Standards (RTS). Based on an analysis of 595 periodic disclosures between March 2024 and June 2025, the study identifies key strengths and areas for improvement in reporting practices.
The findings offer actionable insights to help institutions enhance their sustainability commitments and regulatory compliance. As sustainable finance gains momentum, this research supports the development of more robust strategies for navigating the evolving regulatory landscape.
Summary
The SFDR, introduced by the EU in 2021, aims to improve transparency in sustainable finance. EY Luxembourg’s SFDR Barometer analyzed 595 disclosures to assess alignment with regulatory standards. The study identifies strengths, gaps, and offers guidance to enhance sustainability reporting.
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