Intercontinental Exchange (ICE) has launched a data solution for the Principal Adverse Impacts (PAIs) under the European Union Sustainable Finance Disclosure Regulation (EU SFDR) which came into effect last March.
The EU SFDR focuses on greater transparency and standardisation in the products and is designed to make the sustainability profile of funds more comparable and better understood by end-investors.
The regulation looks at pre-defined metrics for assessing the environmental, social and governance (ESG) outcomes of the investment process.
Financial market participants as well as advisors, at the firm-level and product-level, are now obliged to identify and disclose sustainable impacts and whether and how each financial product considers enumerated PAIs as defined in the technical standards recently adopted by the European Commission.
The PAI regime requires specifically formatted disclosure on ESG-related indicators, including greenhouse gas emissions, board gender diversity, and energy consumption ratios.
This is expected to impact a significant portion of global asset managers, asset owners, portfolio managers and financial advisors in the EU, according to ICE.
The exchange group s solution collects, calculates and normalises data into formats closely aligned with the regulatory technical standards for ease of use by clients.
In addition, it offers event-triggered updates for all of the mandatory adverse sustainability indicators applicable to investments in companies, sovereigns and supranationals, in a conveniently formatted file or web viewing tool.
Users will also be able to link equity and fixed income securities to the closest disclosing corporate entity thereby quickly matching a security to the nearest parent entity with disclosed data.
“The transparency ambitions of the EU SFDR places new demands on asset managers and investment advisers,” said Elizabeth King, President of ESG and chief regulatory officer at ICE.
She added, “ICE’s SFDR PAI Solution offers updated, granular values for the SFDR’s adverse sustainability indicators needed by market participants to meet SFDR requirements.”
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