Investment management solutions provider SimCorp announced the launch of two new sustainability-related solutions, aimed at enabling investment managers to integrate ESG and manages sustainable investment strategies, and to comply with upcoming EU Sustainable Finance Disclosure Regulation (SFDR) reporting requirements.
The new solutions were co-created with Danske Bank Asset Management, which was the first client to adopt the solution. According to SimCorp, several large clients are going live with the SFDR solution.
Christian Kromann, CEO of SimCorp said:
“Enabling ESG and Sustainable investing for our clients is a core aim of our wider sustainability strategy, and close client partnerships remain a formidable way to support our clients’ long-term strategic ambitions.”
Christian Heiberg, CEO of Danske Bank Asset Management, added:
“The sustainable agenda is rapidly picking up speed and we are fully focused on constantly improving our sustainability efforts to stay ahead of the curve and be one of the best Nordics banks for responsible investments.”
One of the new solutions is a dedicated ESG framework enabling sustainable investing and ESG integration. Features of the framework include allowing asset managers to optimize sustainability performance and ensure compliance with sustainability-related guidelines in portfolio construction, manage sustainability data or metrics and create custom sustainability KPIs, integrate data and KPIs into core investment processes, and monitor sustainability performance and exposure across all investments.
The SFDR solution aims to help investors meet the upcoming reporting requirements from phase 2 of the implementation of the regulations. The EU SFDR forms part of the EU’s Action Plan on financing sustainable growth. In the upcoming phase, set to come into effect in 2023, reporting obligations will include providing disclosures such as the manner in which sustainability risks are integrated into investment decisions, and assessments of the likely impacts of sustainability risks on the returns of financial products, measurement and tracking of KPIs, principal adverse impacts (PAIs) and EU Taxonomy alignment.
Features of the new solution include enabling SFDR related reporting, by providing relevant PAIs and EU taxonomy alignment KPIs at the position, product, and enterprise level, integrating KPIs into front office applications and simplifying onboarding of SFDR related data by using standardized interface data feeds.
Carl Balslev Clausen, ESG Offer Manager, at SimCorp said:
“In the past few years, ESG investing has evolved from simple screening and exclusion principles to more sophisticated approaches that include all asset classes, across public and private markets. Operations platforms need to facilitate the larger scale and the additional complexity in both data and analytics that is required for investment managers to achieve their sustainability-related targets, and to future proof the infrastructure to cater for the fast-evolving ESG market and regulation. At the same time, it is essential to maintain unbreakable consistency and integrity in areas such as trade controls, which is key to maintain trust and legitimacy within ESG Investing. These are the reasons we have evolved our single-platform approach to include ESG analytics.”