SFDR may undergo revisions, and this is entirely justified

In this article, Dennis van der Putten – Chief Sustainability Officer at Cardano – discusses developments in the field of SFDR (Sustainable Finance Disclosure Regulation). Originally established to provide transparency on sustainability risks within investments, it is now primarily used as a label, contrary to its intended purpose. Following a broad consultation, the European Commission is considering a reclassification into four categories: solutions, sustainable, exclusion, and transition, to make SFDR more logical and practical. While these adjustments are a step in the right direction, there is still a need for clarity and concrete definitions of sustainability to prevent greenwashing and support the transition to a sustainable economy. The focus should be on promoting the transition and adaptability of companies, which has a more significant impact than merely investing in already sustainable businesses.