Mistake 1: treating negative screening as sufficient

• The problem: Many managers believe excluding sectors like tobacco or coal qualifies as Article 8.

• The reality: Article 8 requires funds to promote ESG characteristics, not just avoid harmful industries.

• Learn more: We explain this in detail in Is Negative Screening Enough for an Article 8 Fund?

Mistake 2: using generic or vague ESG language

• The problem: Vague phrases like “we care about sustainability” don’t satisfy regulators.

• The reality: SFDR requires specifics, which characteristics are promoted, how they’re measured, and how binding they are.

• Learn more: See our SFDR Article 8 Fund Guide for a breakdown of disclosure templates and how to make them concrete.

Mistake 3: forgetting Principal Adverse Impacts (PAIs)

• The problem: Many Article 8 funds ignore PAIs or assume they’re optional.

• The reality: Even if you don’t consider PAIs, you must explain why in both your pre-disclosure and website disclosure. If you opt-in, the PAI disclosure must be completed annually.

• Learn more: Our article on Annual Disclosure Requirements for SFDR Article 8+ and 9 Funds explains what needs to be included.

Mistake 4: misclassifying as Article 9 to sound “greener”

• The problem: Some managers label themselves as Article 9 to attract LPs.

• The reality: Article 9 requires a sustainable investment objective, mandatory PAIs, and often EU Taxonomy alignment. Misclassification risks greenwashing accusations.

• Learn more: Check our comparison piece: What’s the Difference Between Article 8 and Article 9 Funds?

Mistake 5: ignoring website and periodic disclosure consistency

• The problem: Funds update periodic reports but forget to update websites or LP reports, leading to inconsistencies.

• The reality: Regulators and LPs cross-check and any mismatch undermines trust.

• Learn more: Our Annual Disclosure Requirements guide shows how to align templates, websites, and reports.

Mistake 6: underestimating portfolio company readiness

• The problem: Many funds assume startups can easily report ESG data. In reality, most lack systems.

• The reality: Without templates or support, managers end up with gaps in their annual disclosures.

• Learn more: Our piece How to Build ESG Into Your Investment Process Beyond Negative Screening explains how to introduce ESG realistically across the investment lifecycle.

Mistake 7: not linking ESG to value creation

• The problem: ESG is presented as a compliance cost rather than a driver of growth.

• The reality: LPs want to see ESG as a lever for resilience, efficiency, and fundraising advantage.

• Learn more: See our article on [ESG as a Business Advantage] for examples of how ESG directly supports valuation.

This is not just about avoiding mistakes.

It’s about building trust. The funds that succeed are those that:

• Go beyond exclusions.

• Use clear, binding ESG criteria.

• Support their portfolio companies in reporting.

• Show LPs how ESG creates value.

With Planicorn, this process becomes easier. From data collection to template reporting, Article 8 compliance can be completed in under 30 minutes. Contact us to learn more.