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Introduction
The mentions “Article 8” and “Article 9” now appear everywhere in financial documents.
One might think they indicate whether a fund is “sustainable” or not. In reality, their role is different.
To understand them properly, let’s start with the basics:
SFDR = Sustainable Finance Disclosure Regulation
➡️ European regulation on sustainability-related disclosures in the financial sector.
Its purpose?
It is not meant to say whether a fund is sustainable.
Its purpose is to require financial actors to explain how they take sustainability issues into account.
➡️ In short: enhancing transparency, not evaluating sustainability performance.
1. Why do we talk so much about Articles 8 and 9?
Because the SFDR requires funds to explain what they do and to place themselves in a category.
Articles 8 and 9 have therefore become reference points — sometimes used as implicit labels.
But they are not labels.
2. What Articles 8 and 9 do not mean
It is often assumed that:
- Article 8 = “slightly sustainable”
- Article 9 = “very sustainable”
This interpretation seems simple — but it is incorrect.
The SFDR does not measure:
- the real impact of an investment,
- the quality of an ESG strategy,
- or the robustness of the indicators used.
It only requires transparency about what is being promised.
3. Article 8: a very broad category
An Article 8 fund must “promote” environmental or social characteristics.
But this promotion can take very different forms:
- sector exclusions,
- ESG filtering,
- best‑in‑class selection,
- or a few minimal criteria.
Without reading the strategy in detail, the category alone does not reveal what is actually being done.
4. Article 9: a declared ambition, not always the same
Article 9 funds must set a sustainable investment objective.
However, the way this objective is defined and measured varies widely from one institution to another.
As a result:
- two Article 9 funds may pursue very different approaches,
- and show levels of ambition that have little in common.
5. What the SFDR fundamentally changes
The SFDR does not classify funds: it makes their intentions and methods visible.
It forces clarification.
It requires information that was not always accessible before.
But to interpret this information, one needs to understand:
- which indicators are used,
- which criteria truly matter,
- and what methodology lies behind the chosen category.
Without these reference points, misunderstandings are easy.
6. Why this understanding is becoming essential
With the emergence of the EU Taxonomy and the CSRD, a common language for sustainable finance is gradually taking shape.
And like any language, knowing the words is not enough — one must understand their meaning.
To go further (in two hours)
👉 Enroll in Horizon & Beyond’s “Essentials of Sustainable Finance” MOOC to truly master the foundations of the regulatory framework.
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