Walking the Talk: ESG Commitment and Article 9 of the SFDR

We hear a lot about ESG these days. Every other investment fund or company seems to be shouting from the rooftops about sustainability, impact, or doing things “the right way.”

But as we all know, talk is cheap – and in the world of finance, credibility is hard-won and easily lost. That’s why I find Article 9 of the EU’s Sustainable Finance Disclosure Regulation (SFDR) so interesting. It’s not perfect, but it’s at least a step towards holding capital to its ESG promises.

If you’re not familiar with it, Article 9 funds – sometimes called “dark green” funds – are those that set sustainable investment as an explicit objective. This isn’t just about excluding tobacco stocks or adding a few wind farms to your portfolio. It’s about aligning your core purpose with sustainability outcomes and showing that, from top to bottom, your investment decisions are made with the planet and society in mind.

In other words, these funds aren’t just ESG-washed wrappers. They’re supposed to walk the talk.

That said, committing to Article 9 standards is not for the faint-hearted. There’s a higher level of scrutiny involved – from disclosures and data reporting, to due diligence on what exactly counts as “sustainable.” And crucially, funds must demonstrate that their investments do no significant harm to other environmental or social objectives. It’s a level of rigour that’s sorely needed in a world where ESG has become both a buzzword and a battleground.

But it’s not just about compliance. For me, Article 9 represents something broader: a shift in mindset.

Investors are starting to realise that sustainability isn’t a constraint – it’s a strategy. A fund aligned with ESG principles, properly executed, is less exposed to long-term risks. Whether it's carbon pricing, resource scarcity, or social unrest, the real-world pressures are becoming financial pressures. And Article 9, for all its regulatory complexity, is a tool that helps investors filter out the noise and lean into that reality.

Of course, there are challenges. The SFDR as a whole is still evolving, and there’s a fair bit of confusion – particularly around how to interpret and implement the rules consistently. Some fund managers have downgraded Article 9 funds to Article 8 due to lack of clarity or fear of greenwashing accusations. Others are hesitant to go “dark green” because the data just isn’t there yet – especially in emerging markets or private assets.

But we’re getting there. Standardisation is improving. The EU Taxonomy is starting to fill in the blanks. Third-party ratings and data providers are becoming more sophisticated (if still not perfect). And most importantly, investors – from institutions to individuals – are asking harder questions. They’re no longer satisfied with generic ESG labels. They want evidence, transparency, and measurable outcomes.

That’s where Article 9 earns its keep. It sets a higher bar. It nudges the market towards real accountability. And over time, it might just help shift capital away from short-term thinking and towards something more meaningful – not just financial returns, but long-term value creation for people and planet.

So when I see a fund genuinely embrace Article 9 – not as a marketing tool, but as a framework for doing better – I see something worth supporting. Because if ESG is to mean anything at all, it needs more than intent. It needs infrastructure. Article 9, for all its flaws, is part of that.