Impact of new regulation on firm behaviour

EU Sustainable Finance Disclosure Regulation (SFDR), in force since 2021, requires financial market participants to disclose how they integrate sustainability risks and objectives and to classify their products accordingly. A central aim is to curb greenwashing, where sustainability labels are used for marketing without substance (Findlay and Moran, 2019). Schütze and Stede (2021) describe SFDR as a cornerstone of the EU sustainable finance framework, linked to the EU Taxonomy for sustainable activities. The framework is now changing. In November 2025 the European Commission proposed a reform ("SFDR 2.0") that would replace the current Article 8 and 9 designations with three product categories (Transition, ESG Basics and Sustainable), and the Omnibus I package (Directive (EU) 2026/470) has narrowed the scope of the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD). The final shape of the SFDR reform is still under negotiation. Studies of how fund managers and firms respond to SFDR are still limited (Cremasco and Boni, 2022; Becker, Martin and Walter, 2022), and little is known about how shifting disclosure requirements affect behaviour. This project examines how SFDR and related EU ESG regulation influence the behaviour of financial market participants. It also investigates the costs of these regulations for funds, firms and investors.

An honours degree in Business, Finance, Economics or related disciplines.

Self Funded (Scholarship not available. Fees & Materials to be paid by the student. Materials costs not significant)

If you are interested in submitting an application for this project, please complete an Expression of Interest.

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