In January 2023, the second phase of SFDR regulations are set to be announced in Europe with the aim to improve "reporting requirements for sustainable and ESG-labelled financial products." The knock-on effect of this announcement has been a mass downgrading of Article 9 funds to Article 8 in preparation for what is being billed as "the great reclassification". Investment managers such as Amundi, BlackRock, Axa, Invesco and Pimco, to name a few, have all downgraded 'dark green' Article 9 funds to 'light green' Article 8 in preparation for the announcement of new regulations. The sudden downgrading of funds has arrived due to fears of greenwashing allegations. Fund managers rushed to Article 9 in the first place thanks to its "initial, less prescriptive qualification requirements".

However, following mass downgrading of funds there is a chance of outflows with investors potentially looking to reinvest into other Article 9 funds. With funds moving away from Article 9, the Article 8 category could become inefficient as the "category is now broad and diverse, it will be exceptionally difficult for consumers to navigate". Despite this, fund managers may in fact welcome the greater clarity and transparency that will come with the upcoming SFDR shift, as they will hope they can rest assured that their funds adhere to reporting standards so that they can avoid the chance of greenwashing claims.