The E.U.’s ambitious Green Deal aims to transform the E.U.’s economy by reducing net greenhouse gas emissions from 1990 levels by at least 55 percent by 2030 before attaining complete “climate neutrality” (i.e., an economy that generates no net greenhouse gas emissions) by 2050. To achieve those goals, the E.U. has published a raft of legislative proposals – including the E.U.’s Taxonomy Regulation (Taxonomy) and the Sustainable Finance Disclosure Regulation (SFDR) – to reorient capital flows toward sustainable finance. The majority of the SFDR’s high-level provisions have applied since March 10, 2021, and the detailed underlying provisions of two Taxonomy objectives have been in force since January 1, 2022. In that time, fund managers have become more attuned to the requirements of each of the initiatives and issues with implementing each of them. In a guest article, Travers Smith attorneys Simon Witney and Ibrahim Chaudhary provide an overview of recent legal and regulatory developments of the Taxonomy and the SFDR, as well as some emerging practical challenges for fund managers. See our two-part series on the E.U. sustainable finance initiatives: “Preparing to Apply the Taxonomy Regulation and Other Proposed ESG Regulations” (Oct. 27, 2020); and “Exploring the Different Application Levels of the SFDR Based on a Firm’s ESG Practices” (Nov. 3, 2020).