![\"\"](\"https:\/\/www.europesays.com\/uk\/wp-content\/uploads\/2025\/09\/RI_list.jpg\" "\\"RI_list")
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Market participants have improved their disclosures of principal adverse impact (PAI) under the EU\u2019s Sustainable Finance Disclosure Regulation (SFDR)<\/a>, according to an annual overview<\/a> published by European regulators.<\/p>\n Under SFDR, the three European Supervisory Authorities (ESAs) are required to conduct an annual review of reporting quality in partnership with national regulators.<\/p>\n Investors have frequently complained<\/a> of problems sourcing data for the PAI disclosures, with some metrics seeing extremely low coverage, and many are keen to see<\/a> entity-level reporting disappear from the regulation entirely.<\/p>\n Despite this, disclosures \u201chave improved significantly this year in terms of clarity, quality and completeness\u201d, the ESAs said, in particular by asset managers.<\/p>\n The regulators said they had found \u201can effort from market participants to publish more complete information and in full compliance with the SFDR\u2019s disclosure requirements\u201d.<\/p>\n However, for investors which choose not to produce reports, the quality of their explanations is \u201cstill not completely satisfactory\u201d, either not changing from year to year or not providing a timeline for reporting when data improves.<\/p>\n While the overall quality of statements is improving, the ESAs said investors need to get better at explaining what actions they are taking in response\u00a0to the adverse impacts of their investments and any targets they have set.<\/p>\n Meanwhile, national regulators praised efforts by investors to explain variations in the underlying data behind the PAI disclosures, for setting out what had driven changes in the numbers for each indicator, as well as for choosing to report against\u00a0more than the minimum of two optional indicators.<\/p>\n While many of the statements are clearly signposted online, the report found that others require \u201csubstantial navigation\u201d or have to be accessed via targeted external searches. Some investors have also removed previous years\u2019 disclosures from their websites.<\/p>\n Some national regulators also found that investors that were not considering PAIs in their investments had bundled this declaration into other documents.<\/p>\n SFDR overhaul<\/strong><\/p>\n The SFDR is in line for a significant overhaul by the EU, which is likely to switch to a category-based fund labelling system for sustainable products in the bloc.<\/p>\n Based on their findings, the ESAs made a number of recommendations to the European Commission for its reform proposals.<\/p>\n The first of these was that the Commission should consider \u201cthe persisting value\u201d of PAI statements and aim to make these shorter and in a more machine-readable format.<\/p>\n The ESAs also repeated a request to move the production of their own report to a two- or three-year cycle for resource reasons, noting that they had already slimmed down their own questionnaire to national regulators over burden concerns.<\/p>\n","protected":false},"excerpt":{"rendered":"Market participants have improved their disclosures of principal adverse impact (PAI) under the EU\u2019s Sustainable Finance Disclosure Regulation…\n","protected":false},"author":2,"featured_media":413278,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5174],"tags":[116754,77553,2000,299,5187,1699,2443,89956],"class_list":{"0":"post-413277","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-eu","8":"tag-central-banks-regulators","9":"tag-data-disclosure","10":"tag-eu","11":"tag-europe","12":"tag-european","13":"tag-european-union","14":"tag-regulation","15":"tag-sfdr"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115180352042924893","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/413277","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=413277"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/413277\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/413278"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=413277"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=413277"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=413277"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}