Policy Brief

PB 3/2025: Towards Granular Climate Transparency in Mutual Funds: Informing the SFDR Review

Climate-oriented mutual funds apply heterogeneous climate approaches, from Paris Alignment and CO₂ reduction targets to SDG13 and EU Taxonomy orientation, each linked to different investment strategies and climate metrics.
The Sustainable Finance Disclosure Regulation (SFDR) lacks granularity, failing to distinguish between these different approaches. This hampers informed decision-making for investors.
To support climate action and protect investors, the SFDR should require more differentiated disclosures that clearly communicate the fund’s climate approach and underlying metrics.
Climate approaches that finance transition in high-emission sectors can play a critical role in climate mitigation. SFDR must recognize and accommodate such transition strategies.

Authors

Prof. Dr. Christian Klein
University of Kassel
E-Mail: klein@uni-kassel.de
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Lisa Knob
University of Kassel
E-Mail: Lisa.Knob@uni-kassel.de
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Prof. Dr. Marco Wilkens
University of Augsburg
E-Mail: marco.wilkens@wiwi.uni-augsburg.de
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