On 24 June 2026, the Council agreed its negotiating position on an updated transparency framework for sustainable financial products sold in the EU (“Position”). The review concerns the Sustainable Finance Disclosure Regulation (“SFDR”) and aims to reduce administrative burdens while helping investors better understand and compare sustainability-related financial products. The Position is available at this link.

The updated SFDR framework is intended to make sustainability disclosures clearer, simpler and more comparable. The current SFDR requires financial market participants to disclose how they integrate ESG sustainability risks and adverse impacts into their investment products.

A major change proposed by the review is the introduction of three new product categories: sustainable, transition and ESG basics. These categories would replace existing concepts that have been criticised for creating confusion and increasing the risk of greenwashing.

The Council’s position also strengthens requirements for the sustainable and transition categories. Financial market participants would need to use at least three indicators from a list to be provided by the European Commission when identifying and disclosing principal adverse impacts, supporting better comparability between products.