SFDR an exercise in fitting ‘a square peg in a round hole’
Overlaying the European Union’s Sustainable Finance Disclosure Regulation (SFDR) framework to real estate managers’ and investors’ portfolios is “an exercise in fitting a square peg in a round hole,” according to a new report on environmental, social and governance (ESG) reporting from INREV.
The association has interviewed representatives from 10 institutional investors and managers about their dealings with the SFDR regime and found many of them are having to use “considerable mental agility” when applying SFDR requirements to their reporting, which they are finding to be cumbersome and impractical.
The crux of the problem lies in the fact that European Securities and Markets Authority initially framed SFDR regulation for public finance markets. INREV’s research paper says, “The degree to which a regulation initially devised for public markets [that tend toward short-term trading horizons] remains apposite for private markets characterized by longer