EU Sustainable Finance Action Plan Solutions

High-Quality ESG Research and Data to Help Investors Meet the New Regulatory Requirements

null

The EU Sustainable Finance Action Plan is arguably the most comprehensive and detailed set of regulations affecting the field of ESG investing. To comply with the various regulatory deadlines, investors not only need a comprehensive suite of high-quality ESG research and data products and services, but also a trusted partner. Our knowledgeable team can show you how our robust data coverage and award-winning research can help.

Contact us today to begin your EU Action Plan compliance journey.

 

Our Solutions

Sustainalytics and Morningstar are helping investors at every step of their compliance journey. We are continuously enhancing our solutions as regulatory requirements are finalized, providing clients with a full solution at both the company and portfolio level well ahead of regulatory deadlines. 

EU Taxonomy Solution

null

Regulation

The Taxonomy is a classification framework designed to determine whether an economic activity is environmentally sustainable​. There are three main criteria that activities will be screened on to determine alignment with Taxonomy objectives:

1. Substantial Contribution

2. Do No Significant Harm

3. Minimum Safeguards

null

Solution

Our solution enables you to incorporate EU Taxonomy criteria in your investment decisions and report on your progress toward addressing climate change. We offer coverage on more than 10,500 companies and align our list of activities with the Climate Delegated Act. Sustainalytics’ EU Taxonomy Solution is underpinned by comprehensive estimation and proxy approaches to supplement reported data, providing investors with a more holistic picture of their portfolios’ alignment to the EU Taxonomy.

Sustainable Finance Disclosure Regulation

null

Regulation

The EU’s Sustainable Finance Disclosure Regulation (SFDR) introduces new rules for how investment managers need to incorporate and disclose sustainability risks and factors with an emphasis on the so-called “Principal Adverse Impact” (PAI) indicators.

null

Solution

To fully comply with all of the SFDR requirements will require a comprehensive set of ESG research solutions that enable investors to identify and manage both ESG risks and potential adverse sustainability impacts. Sustainalytics’ client advisory teams can advise you on finding a suitable mix of research solutions to meet your organization’s needs.

New SFDR Research Solutions

The following company and fund level data solutions were created specifically to support SFDR compliance requirements:

null

Company-level Data

  • PAI Data Solution: Data packages with all of the mandatory corporate and sovereign PAIs, and a growing number of voluntary PAIs.
  • Compliance with SFDR: Supported with our research such as Impact Metrics, Sustainable Products, Global Standards Screening, Controversies Research, ESG Risk Rating.
null

Fund-level Data

  • Morningstar will collect and disseminate EU ESG Fund Type information, such as Article 8 & 9 flags, and key data points from SFDR compliant ESG prospectuses.
  • Users of third-party funds, such as advisors and fund-of-funds, can utilise Morningstar’s market leading ‘Full Holdings’ database to look through funds to their underlying exposures. This gives the user PAI assessments on the underlying securities, thereby aligning with the regulation’s requirements for entity level disclosures to be calculated using security level data.

EU Benchmarks Regulation

null

Regulation

The EU Sustainable Finance Action Plan includes two amendments to regulation affecting sustainability benchmarks: 

1. Climate Benchmarks: The regulation defines new minimum standards for two types of carbon benchmarks: the EU Climate Transition Benchmarks (EU CTB) and the EU Paris-aligned Benchmarks (EU PAB). 

2. Disclosure Requirements: Sustainalytics offers three data packages for corporate, sovereign and climate benchmarks, consisting of around130 data points from 12 of our research products. 

null

Coverage 

Sustainalytics dataset covers approximately 12,500 companies and 172 countries. 

 

Solution

Our dataset and reports can support investors in meeting the regulatory requirements of the EU Climate Transition Benchmarks, EU Paris-Aligned Benchmarks and sustainability-related disclosure requirements for benchmarks with ESG factors.  

Sustainalytics can help index providers and benchmark administrators meet mandatory reporting and disclosure obligations while enabling them to screen companies on their eligibility for inclusion in EU Climate Benchmarks. In addition,  Morningstar provides ESG Indexes for comparison purposes and benchmarking, as well as the reporting capabilities necessary to generate fund level reports. 

Key Features And Benefits

null

High-Quality ESG Research Solutions 

Our established, award-winning ESG research aligns well to regulatory criteria, creating a solid foundation to working towards full coverage  

null

Trusted Partner 

Built on 25+ years of ESG expertise, Sustainalytics’ client advisory team have unparalleled expertise in guiding clients to find ESG solutions tailored to their organization’s needs.

null

A coherent and consistent approach to ESG 

Together with Morningstar, we can provide end-to-end solutions from raw data to managed portfolio and reporting solutions at company and fund level to suit your intended use case.

null

Strong commitment demonstrated by robust investment in capacity 

With over 300 ESG analysts, Sustainalytics has one of the largest research teams in the industry. We have significantly expanded our capacity with more than 30 new analysts to focus on supplementing our established research by focusing on new research areas directly rated to the EU Action Plan.

null

Combined Regulatory and Product Knowledge 

Sustainalytics is collaborating closely with Morningstar’s regulatory and product experts to bring a comprehensive solution to market.

 

Would you like to learn more?

Why Sustainalytics?

null

A Single Market Standard

Consistent approach to ESG assessments across the investment spectrum.

null

Award-Winning Research and Data

Firm recognized as Best ESG Research and Data Provider by Environmental Finance and Investment Week.

null

End-to-End ESG Solutions

ESG products and services that serve the entire investment value chain.

null

30 Years of ESG Expertise

500+ ESG research analysts across our global offices.

null

A Leading SPO Provider

As recognized by Environmental Finance and the Climate Bonds Initiative.

Related Insights and Resources

EU Flags

Sustainable Investment Calculations Under MiFID II and SFDR Remain Perplexing for ESG Investors

The various interpretations of the sustainable investment definition introduced by the SFDR and leveraged in MiFID II leave many market participants unsettled, having to decide between approaches that have different benefits and limitations in the short to medium term.

controversial weapons ESG

The Governance of Autonomous Weapons: What Investors Should Know

The ethical implications of lethal autonomous weapons systems (LAWS), often referred to by their dramatic moniker ‘killer robots’, have long been a topic of interest. Until recently, debates about LAWS were relegated as hypothetical, with the technology assumed to be under development and out of reach. Such assumptions may be due for reevaluation, and while a firm conclusion is yet to be drawn, it is worthwhile presenting them to the ESG investment community.

EU Taxonomy in Limbo - Reporting Alignment of Article 8 and 9 Funds in 2022

For observers of the EU’s Sustainable Finance Strategy, 2022 kicked off with a crack and a bang as the European Commission went ahead with plans to include natural gas and nuclear-related activities as potentially sustainable under their ‘Green Taxonomy’. However, in midst of this furor, seemingly less attention has been paid to other components of the regulation that have quietly taken effect from the 1st of January 2022, presenting their own set of challenges.

biodiversity and ESG stewardship

3 Reasons to Skill Up and Scale Up ESG Stewardship in 2022

As our clients and the industry at large focus on proactively mitigating risk and capitalizing on this evolving landscape, stewardship will be a key lever for savvy investors—particularly those facing external pressure to divest. Here are the ESG themes we see influencing stewardship priorities this year.