In brief
- Most asset managers are outside CSRD in their own right. The new thresholds, more than 1,000 employees and €450m net turnover, screen out most standalone managers. Large groups and bank- or insurer-owned managers remain in.
- For those in scope, client assets largely drop out. The revised ESRS exempt investments managed under a fiduciary duty for clients where the manager does not retain the risks and rewards of ownership.
- Client demand does not drop out. Insurers, pension funds and banks still need portfolio data for their own ESRS, Solvency II, IORP and SFDR obligations.
- SFDR 2.0 turns disclosure into a portfolio test. Each of the three categories (Transition, ESG Basics, Sustainable) requires at least 70% of the portfolio to meet its criteria, plus minimum exclusions. Political agreement is targeted for the end of 2026; application is expected at the end of 2028 or early 2029. Until then SFDR 1.0 and the ESMA fund-name guidelines apply.
- Data inputs are getting scarcer and more regulated at once. The CSRD reporting universe is much smaller, and since 2 November 2026 managers may only publish or distribute ESG ratings from providers that are in the ESMA authorisation process.
1. Where the rules stand
The instruments that now govern an asset manager’s sustainability reporting and product disclosures, with their status on 4 November 2026.
| Instrument | Status | What it means for asset managers |
|---|---|---|
| Omnibus I — Directive (EU) 2026/470 | Published 26 Feb 2026; in force 18 Mar 2026; transposition due 19 Mar 2027 | Scope: >1,000 employees and >€450m net turnover, at entity or group level. Most standalone managers fall below. Financial holding undertakings exempt under conditions. |
| Revised ESRS — Delegated Reg. (EU) 2026/1563 | Adopted 3 Jul 2026; OJ 21 Sep 2026; in force 10 Nov 2026 | Mandatory from FY2027. Investments managed for clients under a fiduciary duty, without retaining risks or rewards, are exempt from the materiality assessment and reporting. Taxonomy reporting at investee level is unchanged for in-scope managers. |
| Voluntary standard and value-chain cap — Delegated Reg. (EU) 2026/1560 | OJ 21 Sep 2026 | Limits what a reporting undertaking may require from value-chain companies with ≤1,000 employees. GHG data sit outside the cap. |
| Third-country regime | First reports in 2029 on FY2028; ESRS for third-country groups expected 2027 | Non-EU groups with >€450m EU turnover and an EU subsidiary or branch above €200m. Relevant to US, UK and Swiss managers with EU operations. |
| SFDR 2.0 — Commission proposal of 20 Nov 2025 | Council mandate 24 Jun 2026; Parliament mandate Oct 2026; first trilogue 22 Oct 2026 | Three categories, each with a 70% threshold and minimum exclusions (controversial weapons, tobacco, UNGC/OECD violations, coal). Entity-level PAI statement removed. Still open: fossil-fuel tests in the Transition category, an opt-out for AIFs sold only to professional investors, and an 18- or 24-month implementation period. |
| SFDR 1.0 and its RTS | In force; apply until SFDR 2.0 applies | Article 6, 8 and 9 disclosures continue. The Council would disapply entity-level PAI and remuneration disclosures as soon as SFDR 2.0 enters into force. |
| ESMA Guidelines on fund names | Apply to all funds since 21 May 2025 | ESG and sustainability terms in names require matching portfolio thresholds and exclusions. Supervisors are checking. |
| ESG Ratings Regulation — (EU) 2024/3005 | Applies from 2 Jul 2026; provider applications were due 2 Nov 2026 | Ratings may only be published or distributed if the provider is authorised or in the ESMA process. Managers that show ESG ratings in marketing must add website disclosures. |
| EU Taxonomy — Delegated Reg. (EU) 2026/73 | In force since January 2026; ESAs’ advice to the Commission Oct 2026 | Simplified templates; in-scope managers still report investee-level alignment. The ESAs advised against an OpEx KPI and the EBA proposed harmonising asset-management KPIs across sectors. |
| CSDDD, as amended | Application from 26 Jul 2029 | >5,000 employees and >€1.5bn turnover. Obligation to adopt a climate transition plan removed. CSRD still requires disclosure of a plan where one exists. |
One implication is easy to miss. The 70% threshold makes product categorisation a data question before it is a legal one. A fund that cannot evidence its threshold falls into the non-categorised group, where the remaining sustainability language is limited and a disclaimer applies. The managers best placed in 2028 are those testing their range against both co-legislators’ texts now.
2. Where does your firm sit?
Find your position in the first column. The right-hand column is the step that should already be under way.
| Your position | What applies | First action |
|---|---|---|
| Manager in a group above the CSRD thresholds | Group CSRD report. Client assets exempt where managed under a fiduciary duty without risks or rewards. Seed capital, co-investments and other own-account holdings stay in. | Separate own-balance-sheet exposures from client assets and document the boundary. |
| Standalone manager below the thresholds | No CSRD report. SFDR applies at entity and product level. Institutional clients will keep asking for data. | Prioritise the SFDR 2.0 product test. Use the voluntary standard to answer investor questionnaires. |
| Manager with an Article 8 and 9 range | Recategorisation into Transition, ESG Basics, Sustainable or non-categorised when SFDR 2.0 applies. | Run a provisional 70% test on every product, under both the Council and Parliament texts. |
| Private-markets or AIF manager for professional investors | The Council would let AIFs sold only to per se professional clients opt out of the categories; the Parliament does not propose a broad exemption. Closed-ended funds launched before application can opt out. | Decide which funds you would categorise even if the opt-out survives; limited partners may insist. |
| Non-EU manager marketing funds in the EU | SFDR applies to non-EU funds marketed in the EU. Third-country CSRD regime from FY2028 if the group meets the thresholds. | Map EU marketing and EU entities; align product disclosures across jurisdictions. |
3. What the revised ESRS change for an asset manager
- Client assets mostly leave your own report. The exemption covers investments managed for clients under a fiduciary duty without retaining risks or rewards. “Fiduciary duty” and “clients” are not defined, and civil-society groups have contested the carve-out. Expect auditors to test where you draw the line.
- Some things stay in. Own operations, workforce, governance, own-account investments such as seed capital and co-investments, and Taxonomy information at investee level for in-scope managers.
- Materiality can be assessed top-down. For a manager, business-conduct topics such as product disclosure and greenwashing risk are likely candidates for materiality. Conclusions of non-materiality still need evidence.
- Anticipated financial effects are deferred. Managers reporting since FY2024–26 may omit all such information before FY2028 and quantitative information before FY2030; new reporters get two and four years.
- The exemption does not cover your clients’ reports. An insurer or pension fund that holds your fund remains responsible for the emissions and risks of its holdings, and it will look to you for the data.
4. Three decisions to take before the SFDR 2.0 text is final
Decision 1 — Test every product against the provisional categories
| Category | Requirement (provisional) | Typical current product |
|---|---|---|
| Sustainable | At least 70% of the portfolio contributing to a sustainability objective; the widest exclusions. | Article 9 funds; some dark-green Article 8. |
| Transition | At least 70% in investments on a credible transition path. The fossil-fuel test is disputed: the Parliament would require ≥20% Taxonomy-aligned capex and a Paris-aligned plan. | Climate-transition, engagement-led and some Article 8 funds. |
| ESG Basics | At least 70% meeting ESG criteria beyond risk integration, plus the common exclusions. | Most current Article 8 funds. |
| Non-categorised | No category claim; a disclaimer and limits on sustainability language. | Article 6 funds and products that fail the threshold. |
Run the test on current holdings, not on investment policies. The result tells you which products need repositioning before the category names reach the market.
Decision 2 — Decide what happens to each product
Keep, reposition, rename or close. The fund-name guidelines already bind, so names and portfolios must agree today. Plan changes into the 2027–28 prospectus cycle rather than in one rush after the text is published.
Decision 3 — Secure the data supply
Check every ESG rating you publish or distribute against ESMA’s authorisation list. Plan for estimates where investee CSRD reports disappear, and be ready to disclose how you estimate: SFDR 2.0 adds an explicit disclosure on the use of data and estimates.
5. One data build, four outputs
The same holding-level data serves your products, your clients and, if you are in scope, your own report. Build it once and to an assurance standard.
| Data element | SFDR 2.0 categories | SFDR 1.0 (today) | Client reporting | Own CSRD |
|---|---|---|---|---|
| Investee GHG emissions and intensity | Yes | Yes (PAI) | Yes | Own account |
| Fossil-fuel exposure and exclusion screening | Yes | Yes | Yes | — |
| UNGC / OECD controversies | Yes | Yes | Yes | — |
| Investee Taxonomy alignment | Sustainable | Yes | Yes | Investee level |
| Investee transition plans and targets | Transition | Qualitative | Yes | — |
| Physical risk of holdings, by location | — | Risk integration | Yes | — |
| Voting and engagement records | Transition | Qualitative | Yes | — |
6. Five pitfalls we see
- Reading the ESRS exemption as an exit from sustainability data. Your institutional clients still carry the obligation and will pass the request down the chain.
- Waiting for the final SFDR text before testing products. The architecture is agreed across all three institutions; only the calibration is open.
- Distributing ratings from providers outside the ESMA process. Since 2 November that is no longer permitted.
- Assuming the professional-investor AIF opt-out survives trilogue. It is a Council position, not settled law.
- Filling data gaps with undisclosed estimates. The new rules ask you to say how you estimate. Methods you cannot explain will not survive supervisory review.
7. Ten questions for your next product or investment committee
- Which of our products would meet the 70% threshold for their likely category on today’s holdings?
- How many products would land in the non-categorised group, and what would we then be allowed to say about them?
- Do all fund names still match portfolios under the ESMA guidelines?
- Which ESG ratings do we publish or distribute, and is every provider authorised or in the ESMA process?
- If we are in CSRD scope, where exactly does our managed-investments boundary sit, and is it documented?
- What share of holdings has reported, rather than estimated, emissions data?
- Can we deliver the portfolio data our insurer and pension clients need for their 2027 reports?
- Which private-markets funds would we categorise even if an opt-out survives?
- How would our transition funds fare under the Parliament’s stricter fossil-fuel test?
- Who owns the plan to reposition, rename or close products through the 2027–28 prospectus cycle?
8. What to watch over the next twelve months
| Date | Event |
|---|---|
| 2 Nov 2026 | Deadline for ESG rating providers to apply for ESMA authorisation or recognition. |
| 10 Nov 2026 | Revised ESRS enter into force; early application for FY2026 becomes available. |
| Dec 2026 – early 2027 | Political agreement on SFDR 2.0 targeted; it may slip into 2027. |
| 1 Jan 2027 | FY2027 reporting year begins; revised ESRS mandatory. |
| 19 Mar 2027 | Deadline for member states to transpose the Omnibus I CSRD amendments. |
| 2027 | SFDR 2.0 Level 2 measures drafted; adoption of ESRS for third-country groups expected. |
| End 2028 – 2029 | SFDR 2.0 expected to apply, 18 to 24 months after entry into force. |
| FY2028 | First reporting year under the third-country CSRD regime. |
| 26 Jul 2029 | Amended CSDDD applies. |
Key sources
Directive (EU) 2026/470 (Omnibus I), OJ 26 February 2026. Commission Delegated Regulations (EU) 2026/1563 (revised ESRS) and (EU) 2026/1560 (voluntary standard), OJ 21 September 2026.
European Commission, SFDR 2.0 proposal, 20 November 2025; Council negotiating mandate, 24 June 2026; European Parliament negotiating mandate, October 2026.
ESMA, Guidelines on funds’ names using ESG or sustainability-related terms; ESMA public statement on the ESG Ratings Regulation, 1 July 2026. Regulation (EU) 2024/3005.
Commission Delegated Regulation (EU) 2026/73; ESAs’ technical advice on the Taxonomy Disclosures Delegated Act, October 2026.
General information on the regulatory position at the date shown; not legal advice. Several instruments are still under negotiation and national practice varies; confirm your position with counsel.