Simpler Sustainability Disclosures for Private Fund Managers: UK Rules Finalised, EU Reform Heads Into Trilogue

In the UK, the Financial Conduct Authority (FCA) environmental, social, and governance (ESG) sourcebook governs sustainability disclosure for private managers in the UK, covering the Task Force on Climate-Related Financial Disclosures (TCFD) information for FCA-authorised firms and the use of sustainability labels and sustainability disclosure requirements (SDR) in the promotion of funds. For managers who offer funds to investors in the EU, the Sustainable Finance Disclosure Regulation (SFDR) applies.

The FCA’s simplified product-level climate rules took effect on 25 September 2026, and the informal negotiation between the European Parliament, the Council of the EU, and the European Commission (Trilogue) on the SFDR’s reform (SFDR 2.0) begins this month. We have updated our table comparing the regimes to help managers navigate the differences for their businesses.

UK: What Has Changed

• Product-level TCFD reports are gone. They are replaced by a shorter, outcomes-based regime for in-scope firms with 5 billion pounds of assets under management (AUM) or more:
  • Institutional investors (from 30 June 2027). On request, managers will have to provide scope 1, 2, and 3 emissions data needed for investors’ own regulatory disclosures once per calendar year per product.
  • Retail clients (from 25 September 2026). Managers must now periodically consider whether climate-related risks are material to a product’s performance and, if so, disclose them in communications with retail investors.

UK: What Has Not Changed

• TCFD entity reports remain due by 30 June each year.
• The SDR and labeling regime is largely unchanged. Managers with 5 billion pounds or more of AUM must publish their first sustainability entity report by 2 December 2026.
• The FCA still intends to extend SDR to portfolio management and overseas products, with timing unconfirmed.

EU: SFDR 2.0 Moves to Trilogue

SFDR 2.0 would replace the investor information disclosure requirements for articles 6, 8, and 9 classifications with three categories (i.e., transition, ESG basics, and sustainable), each with a 70% minimum threshold, and remove the requirement for managers to make entity-level principal adverse indicator (PAI) statements and remuneration disclosures. The Parliament and Council have each adopted negotiating mandates. Key points for private fund managers:

• Professional-investor funds. Both the Parliament and Council propose opting alternative investment funds marketed only to per se professional investors out of the categorisation rules (not in the Commission’s proposal); in principle, naming and marketing rules would still apply.
• Closed-ended legacy funds. Those closed-ended funds created and distributed before SFDR 2.0 applies could opt out (the Council would limit this to funds closed to new investors); the Parliament would also preserve existing commitments and SFDR disclosures.
• Uncategorised funds. Only categorised funds could make sustainability claims in their names. Other funds could still disclose how they consider sustainability factors but only as a minor, noncentral element of their documents.
• Timing. Both institutions support a 24-month application period; if adopted by early 2027, application would be around 1 January 2029 (2030 for pension and insurance products).
• PAI at product level. These are contested: The Commission proposed voluntary indicators, whereas the Council and Parliament would make them mandatory for transition and sustainable products.
• 70% threshold for private assets. It is unclear how the threshold would apply to illiquid strategies, for example, a “brown to green” transition strategy that does not meet the Taxonomy Regulation safe harbour (15% taxonomy-aligned investments). Ramp-up periods will also matter.

UK and EU Compared

The regimes are different: UK labels are voluntary and tied to a sustainability objective, and UK naming rules apply only to retail products. By contrast, SFDR 2.0 would in general restrict sustainability claims in fund names and marketing to funds within the new categories, whatever the investor type, subject to the proposed opt-out for professional investor-only funds. Mapping a fund’s compliance across both regimes will require careful, case-by-case analysis.

Download our comparative overview table.

You may also be interested in our related recent briefings:

• “A New Private Fund Managers Regime in the UK: Good News for Non-UK Managers?” (23 July 2026)
• “ESG, SFDR, and Defence Investment: Greater Investor Choice, (7 July 2026)
• “Horizon Scan for Private Investment Funds: Recent Developments and What to Look Out For” (May 2026)
• “Simpler and More Streamlined Sustainability Disclosure for UK Private Fund Managers: Taking Stock and Comparing With the EU” (18 September 2025)
• “What does the final draft of the SFDR2 mean for Private Fund Managers?” (21 November 2025)