SFDR Review Potentially Delayed to Q1 2026

Market commentary speculates that the long-awaited review of the EU Sustainable Finance Disclosure Regulation (SFDR), formally scheduled for Q4 2025, may slip into the first quarter of 2026.  It is reported that the timeline could be affected by the progress of the Omnibus package - an initiative aimed at aligning and simplifying several sustainability-reporting frameworks, including the Corporate Sustainability Reporting Directive and the European Sustainability Reporting Standards.

SFDR is being reviewed following the public and targeted consultation launched in 2023 and the subsequent Call for Evidence, which provided the market with a final opportunity to input on the new SFDR regime and has closed as of 30 May 2025. Whilst a delay in the publication of SFDR 2 proposals is not yet confirmed, it would not be unexpected given the complexities involved and the broader work on the Omnibus package. 

The SFDR review is expected to address simplification of the framework, prevention of greenwashing, and reduction of ESG reporting burdens. It will also consider product categorisation, principal adverse impacts, and harmonisation of requirements, with a particular focus on the needs of different investor types and the international exposure of investments. Feedback from the Call for Evidence indicates continued support for the SFDR’s objectives, but also highlights the need for a more proportionate and effective regime. 

Parliament is expected to begin negotiations on aspects of the Omnibus package in September, with a vote in October and trilogue discussions in November. 

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