Article 8+: What Does It Mean?

Article 8+ is an informal term that has emerged in market practice to describe financial products that go beyond the minimum sustainability requirements of Article 8 under the Sustainable Finance Disclosure Regulation (SFDR), yet do not fully meet the stringent thresholds set by Article 9. If you’d first like to know the basics of the SFDR financial product classification, check this article.

What Is an Article 8 Fund?

By definition, Article 8 funds promote environmental or social characteristics as part of their investment strategy. However, they are not required to have sustainable investment as their core objective. These funds must ensure that investee companies follow good governance practices and must disclose relevant information in pre-contractual and periodic documents.

Importantly, Article 8 does not mandate the application of the “Do No Significant Harm” (DNSH) principle or a minimum share of sustainable investments, requirements that are central to Article 9 classification.

What Makes a Fund Article 8+?

Article 8+ is not a legal category but a market-driven label. It is typically used to describe Article 8 funds that voluntarily adopt additional sustainability measures. These may include:

• Disclosing a percentage of investments classified as “sustainable” under SFDR.
• Partial alignment with the EU Taxonomy.
• Applying enhanced ESG screening or exclusion policies.
• Measuring and reporting impact-related KPIs or transition targets.

In practice, many Article 8+ funds closely resemble Article 9 products in their level of ambition, but they do not formally qualify due to limitations in data availability, insufficient DNSH verification, or uncertainty in regulatory interpretation.

Why the Distinction Matters

The lack of a formal regulatory definition for Article 8+has introduced significant ambiguity. Some funds may market themselves as 8+ with limited substantiation, while others implement robust ESG frameworks without any clear recognition mechanism. This absence of standardisation has raised legitimate concerns about greenwashing and the comparability of sustainable financial products.

Nevertheless, the emergence of this informal category reflects a genuine market demand for more flexible yet credible sustainability strategies. In our view, it underscores the need for a fourth product classification under SFDR, one that recognises products with meaningful transitional and impact ambitions, without requiring full Article 9 alignment.

Trends and Market Relevance

Though Article 8+ remains an unofficial classification, it represents a growing share of the sustainable finance market. According to Morningstar’s latest analysis:

• Around 57% of EU-domiciled funds are classified as Article 8.
• A significant portion of these (an estimated 20% disclosed a share of sustainable investments) are considered Article 8+ by market analysts.

For European fund managers, Article 8+ products offer a compelling fundraising proposition: they allow firms to meet increasing LP expectations around sustainability and access ESG-labeled capital, while maintaining flexibility in portfolio construction. As investor scrutiny deepens, and regulatory updates evolve, the credibility and transparency of these funds will be key to sustaining their competitive edge.

Conclusion

The rise of Article 8+ funds is a testament to the market’s desire for ambitious, yet pragmatic sustainability products. While these strategies are driving innovation and ESG integration, the current lack of formal recognition creates uncertainty for both fund managers and investors. As the SFDR review progresses, we believe there is a strong case for introducing a clearer, intermediate classification, one that reflects the evolving nature of sustainable finance and supports transparency, comparability, and trust.

Want to know different approaches to set up an Article 8 Fund? Check this article.

If you're exploring the SFDR classification and would like to learn from the experiences of others, feel free to reach out. We're always happy to share what we've seen work well across a variety of funds and markets.