The Paris Agreement, also known as the SFDR (Sustainable Finance Disclosure Regulation), is an international agreement that was signed in 2015 by 196 parties. The primary goal of the agreement is to limit global warming to below 2 degrees Celsius above pre-industrial levels, while also pursuing efforts to limit the temperature increase to 1.5 degrees Celsius. This is achieved through the global reduction of greenhouse gas emissions and the transition to a low-carbon economy.

The SFDR is a regulation that was introduced by the European Union in 2019 and has been designed to help financial market participants and financial advisers integrate sustainability risks into their decision-making processes. The regulation requires financial market participants and advisors to disclose information on how they integrate environmental, social, and governance (ESG) risks into their investment decision-making processes.

The SFDR requires financial market participants and advisers to classify their investment products based on the level of sustainability they provide. The classification system has three levels: Article 6, Article 8, and Article 9. Article 6 applies to investment products without any ESG objective, while Article 8 applies to products that promote ESG characteristics, and Article 9 applies to products that have a sustainable investment objective.

The classification system has been designed to help investors identify sustainable investment products and to encourage financial market participants to invest in sustainable products. It also helps to reduce greenwashing, which is the practice of claiming that an investment product is sustainable, despite evidence to the contrary.

The SFDR Paris Agreement has received widespread support from financial market participants, investors, and governments around the world. The global push towards sustainability has gained momentum in recent years, and the Paris Agreement is a crucial component of this movement.

In conclusion, the SFDR Paris Agreement is an essential regulation designed to promote sustainable investment and reduce the impact of climate change. Financial market participants and advisers have a vital role to play in promoting sustainable investment products and integrating ESG risks into their decision-making processes. The SFDR classification system helps to identify sustainable investment products and reduces the risk of greenwashing, making it easier for investors to make informed investment decisions.