The EU’s Sustainable Finance Disclosure Regulation (SFDR) introduces new rules for how investment managers need to incorporate and disclose sustainability risks and factors.
Sustainalytics’ PAI Data Solution, which is an ESG dataset with rich corporate- and sovereign-level research, can help investors to identify and understand the adverse sustainability impacts of their investments to fulfill SFDR disclosure requirements.
Listen to Morningstar and Sustainalytics’ regulatory and policy experts for an update on the latest SFDR developments from our webinar that took place on 18 March to learn how we can help you in your compliance journey.View Recording
How Sustainalytics And Morningstar Can Help
Sustainalytics’ established, high quality product suite is already very well aligned to SFDR requirements. For example, our ESG Risk Ratings were designed to help investors identify ESG risks and our Global Standards Screening is considered one of the leading norms-based screening solutions.
To help investors comply with the new requirements of the SFDR, we launched the PAI Data Solution that maps our research to the 60 indicators defined by the regulator. This new dataset will enable investors to consider the PAIs in their investment decisions as well as supporting disclosure requirements.
In addition, Morningstar will collect and disseminate EU ESG Fund Type information, i.e., Article 8 & 9 flags, as well as key data points from updated SFDR-compliant ESG prospectuses.
SFDR raises the bar for transparency and accountability in investment management, introducing new rules for how investment managers need to incorporate and disclose on sustainability risks. It sets standards for classifying funds as “grey”, “light green” or “dark green”, requiring changes to product documentation and marketing materials, with strict reporting requirements for “green” funds.
Specifically, investment managers will have to start reporting on the safeguards put in place to ensure portfolio companies comply with global standards, such as the UN Guiding Principles on Business and Human Rights, as well how their investments may negatively impact sustainability factors, or the “Principle Adverse Impacts” (PAIs) of their investments.
Why Choose Sustainalytics As Your SFDR Partner?
A coherent and consistent approach to ESG across the investment value chain:
From the creation of compliant investment universes to security selection and active ownership; Sustainalytics has developed a comprehensive set of ESG research solutions that were designed to be complementary and consistent in the way ESG is assessed.
Strong foundation of established, high-quality research:
Sustainalytics has a comprehensive portfolio of marketing leading ESG research solutions that are already very well aligned to the SFDR’s requirements to, for example, manage ESG risk and stakeholder impact.
Alignment between company and fund data:
Morningstar’s fund-level solutions leverages Sustainalytics’ company-level research ensuring consistency.