Financial companies, as primarily economic entities, are increasingly taking on the characteristics of a social entity, and have an extremely important impact on the market, but also on the social community in which it operates. Sustainable financing is a key concept in mobilizing the capital needed to achieve the „green goals“ undertaken by the European Union in meeting the climate, social and governance goals of sustainability. More and more companies are turning to more socially responsible business, primarily under the SFDR Regulation (Regulation on Disclosures Related to the Sustainability of the Financial Services Sector) with a focus on environmental protection, social policy and the quality of corporate governance. Regulation 2019/2088 imposes obligations on financial market participants for sustainability related disclosures, and the purpose of these disclosures is to enable and facilitate investors investment decisions and prevent the risk of greenwashing. The relevance of this topic lies in the fact that institutional investors operate in an extremely changing environment and the growing expectations of customers and shareholders in terms of „repaying debt to the community“. The aim of this paper is to approximate and explain the criteria for environmental protection, social responsibility and management, and to show the impact of the SFDR regulation on the operations of institutional investors globally, as well as the impact on the Croatian market. Institutional investors size and importance increases competitiveness and efficiency in the financial system. The question is how new changes such as sustainability criteria will affect institutional investors and their business. Extremely challenging operations of financial institutions and adaptation to new market requirements are expected.