The European Union’s Sustainable Finance Disclosure Regulation (SFDR) was introduced in 2021 with an ambitious objective: improve transparency, reduce greenwashing and direct more capital towards sustainable investment. In real estate, however, the framework has often generated as many questions as answers.
Five years later, the European Commission is working to simplify the regime, moving away from problematic classifications and introducing clearer sustainability categories, including a dedicated transition label. For real estate investors, that transition focus matters. According to the European Commission, around 80 percent of Europe’s existing building stock is expected to remain in use by 2050, with much of it requiring substantial retrofitting to meet decarbonisation targets. But can SFDR’s next phase genuinely accelerate investment into greener buildings, or will reforms risk creating further uncertainty?
Few market participants argue that the original SF
