Classifying Deka ESG funds: What investors and compliance officers should know about the SFDR classification

Since March 10, 2021, the EU Disclosure Regulation (SFDR, Regulation (EU) 2019/2088) has required financial market participants to provide detailed information about sustainability risks and sustainable investment goals. The Deka Group, like many asset managers, offers funds based on the three SFDR categories Art. 6, Art. 8 and Art. 9. This raises questions for investors and those responsible for compliance in companies: Which classification means what? Which indicators are disclosed? And what follow-up obligations arise for institutional investors and their representatives in reporting, risk management and investment policy?

This article classifies the classification of Deka ESG funds, describes the most important SFDR and taxonomy requirements and shows where the interface to internal ESG governance lies. It is not investment advice, but rather a compliance-oriented overview for companies that need to hold, review or explain ESG investments to stakeholders. The focus is on fair documentation, audit-proof evidence and neat integration with CSRD reporting. This creates a line from fund selection to the management report that remains consistent in the audit.

The SFDR divides financial products into three main categories. Art. 6 SFDR includes funds that do not promote a specific ESG orientation. Providers must still describe sustainability risks in investment decisions. Art. 8 SFDR covers funds that promote ecological or social characteristics (so-called “light green” funds). Art. 9 SFDR concerns funds with sustainable investment as their goal ("dark green"), including binding contributions to environmental or social goals and taking into account the "Do No Significant Harm" principle according to Art. 2 No. 17 SFDR.

For Deka ESG funds this means: The sales prospectus and the annual reports contain an SFDR classification, which is presented in a standardised manner in the appendix in accordance with Delegated Regulation (EU) 2022/1288 (RTS). Investors can recognise the classification in the appendix to the contract, in the description of the sustainable investment objectives and in the disclosure of the Principal Adverse Impacts (PAI). In 2026, ESMA published guidelines on the use of the terms "ESG" and "sustainability" in the fund name, which provide for minimum quotas of taxonomy-compliant or sustainable investments. This classification is an anchor point for compliance officers in companies: it shows how the fund is to be classified internally in the ESG file and in reporting to stakeholders. Using the ESG officer function, the company's evaluation can be carried out systematically, from proof of the use of funds to the PAI evaluation. This means that the SFDR classification is not just a sales label, but rather a mandatory information that is clearly referenced in your own file structure.

The Taxonomy Regulation (EU) 2020/852 defines when an economic activity is considered ecologically sustainable. Six environmental goals form the framework: climate protection, adaptation to climate change, sustainable use and protection of water and marine resources, transition to a circular economy, prevention and reduction of environmental pollution, and protection and restoration of biodiversity. An activity is considered taxonomy-compliant if it contributes significantly to at least one goal, does not significantly impair any other goal (DNSH) and complies with the minimum social standards (Art. 18 TaxVO with reference to the OECD Guidelines and the UN Guiding Principles).

For funds classified as Art. 8 plus or Art. 9 SFDR, the taxonomy quota is a central element of disclosure. This ratio shows what proportion of investments go into taxonomy-compliant activities. Deka funds show the quota in the annual periodic reports, supplemented by the assessment of the transition and enabling activities in accordance with Articles 16 and 18 TaxVO. Companies that hold these funds do not adopt the ratio one-to-one, but rather evaluate it in the context of their own CSRD reporting. Anyone who works with the ESG officer function and the CIVAC workspace can consolidate taxonomy data, PAI indicators and use of funds in one file and provide audit-proof evidence. This reduces the effort for CSRD duplication and creates a consistent database for the next management report. Anyone who keeps the taxonomy ratio of the funds against their own investment plans can also recognise early on where transition activities are shaping the balance sheet and which data needs to be supplemented for the coming reporting periods.

Principal Adverse Impacts (PAI) are the most important adverse effects of investment decisions on sustainability factors. Delegated Regulation (EU) 2022/1288 (RTS) lists 18 mandatory and several optional indicators, including greenhouse gas emissions, share of investments in companies without carbon reduction targets, biodiversity, water consumption, waste and social indicators such as violations of the UN Global Compact. Financial market participants with more than 500 employees must publish an annual PAI report.

PAI indicators are a central information component for investors and for companies that are invested in Deka ESG funds. They show where the fund reduces or compensates for impacts, and they provide data points for your own CSRD reporting according to the ESRS (Regulation (EU) 2023/2772). The data situation is not yet complete everywhere because many portfolio companies are only gradually reporting according to ESRS. The clock starts on awareness. In the CIVAC workspace, PAI fields can be stored in the ESG file structures and linked to the respective funds, investments and reporting periods. This creates a trace that remains comprehensible for external auditors and internal auditing, instead of being scattered in email attachments. A consistent PAI evaluation is also important for your own sustainability dialogue with investors and banks. Anyone who links key PAI indicators with their own risk inventory can meet the EBA requirements for ESG risks in the credit risk profile without duplicating work.

From a regulatory perspective, greenwashing is not just a reputation issue. In May 2026, ESMA published guidelines on fund names that link the use of terms such as "ESG", "sustainable", "green" or "impact" to minimum quotas. A fund with “Sustainable” in its name must invest at least 50 percent of its investments in sustainable investments in accordance with Art. 2 No. 17 SFDR. Funds with “impact” must demonstrate a measurable contribution to environmental or social goals. BaFin implements these guidelines in national supervisory practice.

For Deka ESG funds, this means ongoing adjustments to naming, contractual conditions and investment policy. Investors should check how a fund was renamed or repositioned and what impact this has on their own ESG evaluation. Compliance officers document such changes in the ESG file, including communication to internal and external stakeholders. Others run compliance like a filing cabinet. We run it like software. Anyone who combines ESG investments via the workspace with the corresponding audit templates and a dual reporting line to management and the supervisory board can counter greenwashing allegations with documented evaluation processes. This not only protects against fines under Section 56 of the WpHG sanctions regime, but also against civil disputes with investors who could rely on misleading product descriptions. A consistent use of language in marketing, contractual terms and internal ESG communication also reduces the likelihood that regulators will pick up on inconsistencies.

The CSRD (Corporate Sustainability Reporting Directive, Directive (EU) 2022/2464) obliges large companies and capital market-oriented SMEs to report on sustainability in accordance with the ESRS. Investments in Deka ESG funds and other ESG products will be part of the presentation of the use of funds in the management report. ESRS E1 (Climate Change) requires information on investments in carbon-reducing technologies and transition plans. ESRS S1 to S4 affect their own workforce, workers in the value chain, affected communities and consumers.

This creates a double obligation for institutional investors: They adopt the SFDR and taxonomy data from the fund providers and integrate it into their own reporting. The ESRS requires consistent data provenance, an assessment of materiality and a description of the methodology. In the CIVAC workspace, these requirements can be mapped using the ESG officer function, including the audit templates for materiality analysis, stakeholder dialogue and proof of data origin. EU data residency additionally protects against conflicts when processing sensitive supply chain or employee data. A clean ESG file not only facilitates the annual CSRD review by the auditor, but also communication with banks, insurers and investors, who are increasingly using ESG data as a credit rating factor. In this way, a regulatory obligation becomes a usable data pool. In addition, a clearly defined handover process between treasury and sustainability report helps: which data is transferred on which deadline, in what granularity, evaluated with which methodology and stored in which file structure, so that auditors and supervisory boards can follow without questions.

Institutional investors, such as pension funds, foundations and companies with treasury functions, have several obligations when making ESG investments. They must prove the suitability of the investments in terms of their own investment strategy, they must incorporate SFDR and taxonomy data into their own reporting and they must reflect sustainability risks in risk management. For insurers, the latter results from Solvency II and the corresponding BaFin interpretation guidelines, and for pension funds from the IORP II guideline. Banks integrate ESG risks via the EBA guidelines on credit risk (EBA/GL/2020/06) and via BaFin's national guidelines.

The operational responsibility often lies with an ESG or sustainability officer, who should be formally appointed, with a clear task description and reporting line. The appointment certificate, signed, filed, verifiable. The person coordinates the data flows between treasury, controlling, risk management and sustainability reporting and ensures that the evaluation of investments is compared with the materiality analysis. In CIVAC's dual model, you can licence the workspace for your internal representatives, or you can have our representatives order it. Both models lead to a file that remains comprehensible for external auditors and supervisors and in which the lifeline of an ESG investment is documented, from selection through ongoing monitoring to exit. This lifeline is also an effective argument in stakeholder dialogue with customers, banks and insurers, who are increasingly using ESG data points as a prerequisite for conditions. This creates a comprehensible portfolio narrative from individual investment decisions.

Data on Deka ESG funds comes from several sources: sales prospectus, key investor information (BIB/KID according to PRIIPs Regulation (EU) 1286/2014), SFDR appendix, annual periodic report and supplementary ESG profiles. Data providers such as MSCI, Sustainalytics or ISS ESG offer secondary data that is not methodologically identical and may differ in assessments. This creates an obligation for institutional investors to check plausibility: Which source is used for what, how are differences documented, which methodology applies in their own reporting?

An audit-proof ESG file therefore contains not only the data, but also the methodology description and the source paths. ESRS 2 requires an explicit description of data provenance and assumptions. Anyone who stores the data sources in the workspace in a version-controlled manner and links them to the investments can explain to auditors at any time how a PAI statement or a taxonomy quota is created. The same applies to internal investment policies: They should set minimum standards for ESG data, such as timeliness, coverage and how to deal with data gaps. Audit-proof, documented, § 289c HGB-proof. This means that the transition between old ESG assessments and new ESRS-compliant data can be clearly mapped without any breaks occurring in the reporting process or auditor inquiries leading to long clarification loops. The basis for this is compact methodology documentation for each indicator, with sources, reference dates and those responsible. If you check this documentation annually to ensure it is up to date, you will avoid old data being incorporated unnoticed into new reports and generating avoidable audit findings. A short update routine per reporting period is usually sufficient to establish stability.

In practice, recurring vulnerabilities arise. First, funds are classified as sustainable based on name without checking the SFDR classification in the prospectus. Second, taxonomy quotas are taken from marketing materials rather than from the Periodic Report. Third: PAI indicators are not explained in our own reporting, but are only included as numbers. Fourth: Changes in the fund name or investment policy according to ESMA guidelines are not reflected in your own ESG file. Fifth: The ESG officer is not formally appointed and therefore cannot be clearly addressed to the auditor and supervisory board.

Each of these weak points leads, in a bad case, to CSRD findings, to insufficiently substantiated statements in the management report and to reputational consequences if the public discovers inconsistencies. Anyone who keeps these points on a file card for each investment, updates a PAI overview annually and links ESG assessments with clear methodological information significantly reduces the risk. The auditor calls, the evidence is ready. CIVAC's 490 audit templates contain structures for exactly these dockets, aligned with SFDR, ESRS and the EBA guidelines on ESG risks. An annual self-assessment of the ESG function, which documents effectiveness, data quality and interfaces to treasury, risk and reporting over the course of a year, also helps. This self-assessment becomes part of the file and input for the next reporting period. In this way, the maturity level of ESG management can be made visible and justified to supervisory bodies without starting every reporting period from scratch.

Deka ESG funds are an example of a larger issue. Anyone who holds, audits or reports on ESG products needs a file in which the SFDR classification, taxonomy quota, PAI indicators and data origin come together cleanly. CIVAC is a compliance platform and officer-as-a-service designed for the ESG and sustainability officer function, complemented by 490 ready-to-use audit templates, an NIS-2 24/72 reporting path for security-related incidents and EU data residency for storing sensitive data. The ESRS-compliant data structure can be connected to the supply chain and compliance file so that CSRD, LkSG and SFDR are not maintained twice.

Licence the workspace for your internal representatives or have our representatives appoint them. Both paths end in the same auditable file. Three questions will help you get started: Which ESG investments do you currently hold, with which SFDR classification? Who is responsible internally for ESG data origin, appointed in writing? What gaps exist between provider data and your own reporting methodology? Turn reading into an assignment. Write to info@civac.de or use the contact form on civac.de. Within two working days, you will receive structured feedback with templates and an assessment of how your ESG file can be prepared for initial CSRD reviews and sustainability inquiries from banks and investors in the medium term. This creates a clear path from today's data situation to the consistent reporting structure for the coming years, documented and audit-proof. The first steps are often smaller than expected and deliver immediately usable results.