21 Apr 2021

SFDR regulation

power of green

Understanding SFDR

As of 10 March 2021, all entities providing investment or insurance services within the EU must comply with its Sustainable Finance Disclosure Regulation (SFDR). Non-EU actors – who have subsidiaries located within the EU – are also impacted.

What is it?

SFDR is a framework that provides a harmonised approach to the sustainability-related disclosures which financial market participants (FMPs) and financial advisors (FAs) must make to investors in the EU.

SFDR seeks to ensure investors of all kinds are given more transparency about the sustainability‐related impacts of their investments in financial products. As an ESG ETF pioneer, we welcome this initiative because it should help everybody make more mindful investment decisions, build more resilient portfolios and secure a brighter financial future over the long term.

What does it mean for investors?

Under SFDR, FMPs and FAs must now:

  • Publish information about how they integrate sustainability risks in their investment decision‐making process
  • Disclose whether they do or don’t consider (and why) the principal adverse impacts (PAIs) of investment decisions on sustainability factors and include an explanation of the outcome in their financial product prospectuses
  • Reveal information on their remuneration policies, including how those policies are consistent with the integration of sustainability risks
  • Include details in their prospectuses on how sustainability risks are integrated into their investment decisions and their likely impacts on the returns of the financial products
We take this responsibility seriously, which is why all the information we need to disclose is readily available on our product pages.

How SFDR categorises financial products and how it applies to Lyxor ?

Article 6
Products which do not promote environmental and/or social characteristics, but may apply some basic environmental or social safeguards

Article 8
Products which promote environmental and/or social characteristics as part of their investment strategy, provided that the companies in which the investments are made follow good governance practices. At Lyxor, we have a number of Article 8 funds:

Article 9

Products which have a specific sustainable investment objective - for example, a financial product built specifically to support the low carbon transition and achieve the long‐term temperature goals of the Paris Agreement. At Lyxor, we have a number of Article 9 funds:

What should you do if you need more information?

If you want to see the full list of our SFDR 8 and 9 funds today, click here. Alternatively, if you have any questions, please do reach out to your relationship manager who will be happy to arrange a more detailed discussion with you on sustainable investing and how to better integrate it in your portfolio. Together, we can help change the world.