The introduction of the Sustainable Finance Disclosure Regulation (“SFDR”) on 10 March 2021 (as supplemented by the EU Taxonomy Regulation; the “Taxonomy Regulation”) marked a turning point for venture capital and private equity fund managers (“VC/PE Managers”) operating in the European market with respect to their commitments to and reporting on Environmental, Social and Governance matters.

In this article we will explore the background to, the content of and the current status of SFDR, the Taxonomy Regulation and the various regulatory technical standards and screening criteria that underpin them. We will also outline what VC/PE Managers need to do to comply with the regulations and their potential implications.