What distinguishes funds classified under Article 9 of SFDR?

Funds classified under Article 9 of the Sustainable Finance Disclosure Regulation (SFDR) are specifically designed to have sustainable investment as their core objective. This classification indicates that these funds not only consider sustainability factors but are explicitly aimed at achieving positive environmental or social outcomes as a fundamental part of their investment strategy.

The distinguishing characteristic of Article 9 funds is the commitment to invest in activities that contribute to sustainable development, which is a higher standard of accountability compared to other classifications under SFDR. Unlike funds with general sustainability claims or those that may promote social characteristics, Article 9 funds must demonstrate that a significant portion of their investments is directed toward sustainable objectives, such as addressing climate change or supporting social equity initiatives.

This classification provides a clear signal to investors looking for investments that align with their sustainability values, ensuring that their funds contribute meaningfully to sustainable development goals.