ESAs Publish Updated Consolidated Q&As on SFDR

What’s new?

On 4 August 2025, the European Supervisory Authorities (ESAs) published an updated version of the Consolidated Q&A document on the SFDR and its Regulatory Technical Standards (RTS). The document sets out various technical clarifications and interpretations of the SFDR regime.

What does the new Q&A document contain?

The update included four new questions on PAI disclosures and financial product disclosures, which supplement the existing Q&As.

Part IV: PAI Disclosures

Q30: Definition of ‘Water Usage’ in PAI Indicator 6

To provide clarity, the ESAs refer to definitions in Table 2 of Annex II in Commission Delegated Regulation (EU) 2023/2772 and Annex I of ESRS E3 as guidance for the definition of ‘water usage’ and PAI indicator 6 metrics.

Q31: ‘Per Square Meter’ in Real Estate Energy Consumption

To clarify the type of area referred to by ‘per square meter’ in the context of energy consumption by real estate assets, the ESAs confirm that the term ‘per square meter’ refers to ‘useful internal floor area’, as defined in Article 2(51) of the Energy Performance of Buildings Directive 2024.

Part V: Financial Product Disclosures

Q29: Disclosing environmentally sustainable, socially sustainable and total investments

Under the SFDR Delegated Regulation:

• Article 8 products must disclose a minimum percentage of total sustainable investments.
• Article 9 products must disclose minimum percentages for both environmental and social sustainable investments (subsets).

The ESAs explain that these percentages are minimum commitments. As a result, the two subsets may not equal the total minimum proportion of sustainable investments disclosed in the assets allocation section in Annexes II and III.

To address this, the ESAs recommended that financial market participants should include an explanation in the assets allocation section as to why the subsets do not equal the total sustainable investments.

Q30: Methodology for Calculating Top Investments in Periodic Disclosures

The ESAs confirm that, as the methodologies for periodic disclosures stem from underlying sectoral rules referred to in Article 11(2) SFDR, they cannot impose a specific way for financial products to calculate top investments over a reference period which would apply to all the relevant sectoral legislation.