Sustainability-focused data, analytics, and investment solutions provider Impact Cubed announced today the launch of its EU Regulatory Solution, including a suite of data and portfolio analytics aimed at helping investors meet the Sustainable Finance Disclosure Regulation (SFDR) requirements and simplify fund level reporting.
The EU SFDR, part of the EU’s Action Plan on financing sustainable growth, establishes harmonized rules for financial market participants including investors and advisers on transparency regarding the integration of sustainability risks and the consideration of adverse sustainability impacts in their processes and the provision of sustainability‐related information with respect to financial products. Among the new rules are requirements for financial market participants to disclose the principal adverse impacts (PAI) that investment decisions have on sustainability factors, based on a list of indicators encompassing climate and environment, as well as social and employee matters, respect for human rights, anti-corruption and anti-bribery aspects.
The new rules, which also apply to US and Canadian investors who distribute funds in Europe, are intended to counteract greenwashing, require financial market participants to consider sustainability risks and adverse impact factors in the investment process, and report on performance.
The new solution provides aims to provide full transparency on PAIs for more than 800,000 securities across over 40,000 companies, and 190 sovereign issuers or countries, with data coverage of all mandatory PAIs, and to enable investors to report at the entity and fund level.
Antti Savilaakso, Head of Research at Impact Cubed, said:
“The regulations are broad and much more complex than they first appear. We have leveraged our expertise using objective ESG factor data to build rigorous PAI datasets for compliance reporting. We have taken a further step to create powerful portfolio analytics so investors can also understand the implications of the regulations on their investment strategies to create portfolios with greater impact”.