I need to align with SFDR

The Sustainable Finance Disclosure Regulation (SFDR), part of the European Commission’s Action Plan, aims to increase transparency across capital markets and set disclosure obligations for market participants on sustainability issues.

S&P Global's SFDR Data Solution

Focused on increasing transparency and consistency in the financial sector, the EU's Sustainable Finance Disclosure Regulations (SFDR) defines sustainability-related disclosures for financial products. S&P Global's EU SFDR solution helps Financial Market Participants (FMPs) assess and disclose the sustainability alignment of their products with comprehensive coverage of the mandatory and opt-in Principal Adverse Indicators (PAIs) for over 20,000 public and private companies across 464 business activities.

For customers required to disclose the Taxonomy alignment of their products, our data equips fund managers to analyze and track portfolio alignment to:

Articles 8 & 9: Evaluate and report on investments sustainability objectives and environmental or social characteristics.
Articles 5 & 6: Determine how investments' economic activities quality as environmentally sustainable
Article 7: Insights entities environmentally sustainable activities

Our coverage of the Principal Adverse Indicators (PAIs) covers 17 mandatory and 33 opt-in PAIs for:

Climate and related environmental indicators
Social and employee, respect for human rights, anti-corruption and anti-bribery matters
Investments sovereigns and supranationals

SFDR Disclosures

SFDR includes provisions on disclosure for certain large FMPs as of June 30, 2021 on due diligence policies with respect to the PAIs of investment decisions on sustainability factors. Firms which consider PAIs will also need to prepare to disclose how their products consider such impacts by December 30, 2022.

By June 30, 2023, FMPs must disclose detailed information related to a choice of 20 principal adverse impact indicators (PAIs):

Mandatory: 18 indicators
Flexible: 2 indicators can be selected from the remaining 46 social and environmental data points
Voluntary: Any other indicators than the FMP deems relevant to their investment decisions

The disclosure should cover investments made between January 1, 2022 and December 31, 2022

Under the SFDR, European-domiciled investment funds are generally categorized into three groups, each of which raises the bar on the robustness of disclosure required.

Find out more about our SFDR coverage

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Mandatory Indicators Covered
Opt-in Indicators Covered

S&P Global Coverage of Principal Adverse Impact Indicators (PAIs)

Climate and other environment-related indicators:

Greenhouse Gas (GHG) emissions
Carbon Footprint
GHG intensity of investee companies
Exposure to companies active in the fossil fuel sector
Share of non-renewable energy consumption and production
Energy consumption intensity per high impact climate sector
Activities negatively affecting biodiversity-sensitive areas
Emissions to water
Hazardous waste ratio

Social and employee, respect for human rights, anti-corruption and anti-bribery matters:

UN Global Compact/OECD guideline violations
UN Global Compact/OECD guideline compliance monitoring system
Unadjusted gender pay gap
Board gender diversity
Exposure to controversial weapons (anti-personnel mines, cluster munitions, chemical weapons and biological weapons)

Indicators applicable to investments sovereigns and supranationals:

GHG intensity
Investee countries subject to social violations

Indicators applicable to investments in real estate assets:

Exposure to fossil fuels through real estate assets
Exposure to energy-inefficient real estate assets

S&P Global Coverage of Principal Adverse Impact Indicators (PAIs)

Climate and other environment-related indicators:

Emissions of inorganic pollutants
Emissions of air pollutants
Emissions of ozone depletion substances
Investments in companies without carbon emission reduction initiatives
Breakdown of energy consumption by type of non-renewable sources of energy
Water usage and recycling
Investments in companies without water management policies
Exposure to areas of high water stress
Investments in companies producing chemicals
Land degradation, desertification, soil sealing
Investments in companies without sustainable land/agriculture practices
Investments in companies without sustainable oceans/seas practices
Non-recycled waste ratio
Natural species and protected areas
Deforestation
Share of securities not certified as green under a future EU legal act setting up an EU Green Bond Standard

Social and employee, respect for human rights, anti-corruption and anti-bribery matters:

Investments in companies without workplace accident prevention policies
Rate of accidents
Number of days lost to injuries, accidents, fatalities or illness
Lack of a supplier code of conduct
Lack of grievance/complaints handling mechanism related to employee matters
Insufficient whistleblower protection
Incidents of discrimination
Excessive CEO pay ratio
Lack of a human rights policy
Lack of due diligence
Lack of processes and measures for preventing trafficking in human beings
Operations and suppliers at significant risk of incidents of child labour
Operations and suppliers at significant risk of incidents of forced or compulsory labour
Number of identified cases of severe human rights issues and incidents
Lack of anti-corruption and anti-bribery policies
Cases of insufficient action taken to address breaches of standards of anti-corruption and anti-bribery
Number of convictions and amount of fines for violation of anti-corruption and anti-bribery laws

Indicators applicable to investments in real estate assets

GHG emissions
Energy consumption intensity
Waste production in operations
Raw materials consumption for new construction and major renovations
Land artificialization

Indicators applicable to investments sovereigns and supranationals:

Average income inequality score
Average freedom of expression score
Average human rights performance
Average corruption score
Non-cooperative tax jurisdictions
Average political stability score
Average rule of law score

Mandatory Indicators Covered
- Mandatory Indicators Covered
  
  S&P Global Coverage of Principal Adverse Impact Indicators (PAIs)
  Climate and other environment-related indicators:
  
  Greenhouse Gas (GHG) emissions
  
  Carbon Footprint
  
  GHG intensity of investee companies
  
  Exposure to companies active in the fossil fuel sector
  
  Share of non-renewable energy consumption and production
  
  Energy consumption intensity per high impact climate sector
  
  Activities negatively affecting biodiversity-sensitive areas
  
  Emissions to water
  
  Hazardous waste ratio
  
  Social and employee, respect for human rights, anti-corruption and anti-bribery matters:
  
  UN Global Compact/OECD guideline violations
  
  UN Global Compact/OECD guideline compliance monitoring system
  
  Unadjusted gender pay gap
  
  Board gender diversity
  
  Exposure to controversial weapons (anti-personnel mines, cluster munitions, chemical weapons and biological weapons)
  
  Indicators applicable to investments sovereigns and supranationals:
  
  GHG intensity
  
  Investee countries subject to social violations
  
  Indicators applicable to investments in real estate assets:
  
  Exposure to fossil fuels through real estate assets
  
  Exposure to energy-inefficient real estate assets
Opt-in Indicators Covered
- Opt-in Indicators Covered
  
  S&P Global Coverage of Principal Adverse Impact Indicators (PAIs)
  Climate and other environment-related indicators:
  
  Emissions of inorganic pollutants
  
  Emissions of air pollutants
  
  Emissions of ozone depletion substances
  
  Investments in companies without carbon emission reduction initiatives
  
  Breakdown of energy consumption by type of non-renewable sources of energy
  
  Water usage and recycling
  
  Investments in companies without water management policies
  
  Exposure to areas of high water stress
  
  Investments in companies producing chemicals
  
  Land degradation, desertification, soil sealing
  
  Investments in companies without sustainable land/agriculture practices
  
  Investments in companies without sustainable oceans/seas practices
  
  Non-recycled waste ratio
  
  Natural species and protected areas
  
  Deforestation
  
  Share of securities not certified as green under a future EU legal act setting up an EU Green Bond Standard
  
  Social and employee, respect for human rights, anti-corruption and anti-bribery matters:
  
  Investments in companies without workplace accident prevention policies
  
  Rate of accidents
  
  Number of days lost to injuries, accidents, fatalities or illness
  
  Lack of a supplier code of conduct
  
  Lack of grievance/complaints handling mechanism related to employee matters
  
  Insufficient whistleblower protection
  
  Incidents of discrimination
  
  Excessive CEO pay ratio
  
  Lack of a human rights policy
  
  Lack of due diligence
  
  Lack of processes and measures for preventing trafficking in human beings
  
  Operations and suppliers at significant risk of incidents of child labour
  
  Operations and suppliers at significant risk of incidents of forced or compulsory labour
  
  Number of identified cases of severe human rights issues and incidents
  
  Lack of anti-corruption and anti-bribery policies
  
  Cases of insufficient action taken to address breaches of standards of anti-corruption and anti-bribery
  
  Number of convictions and amount of fines for violation of anti-corruption and anti-bribery laws
  
  Indicators applicable to investments in real estate assets
  
  GHG emissions
  
  Energy consumption intensity
  
  Waste production in operations
  
  Raw materials consumption for new construction and major renovations
  
  Land artificialization
  
  Indicators applicable to investments sovereigns and supranationals:
  
  Average income inequality score
  
  Average freedom of expression score
  
  Average human rights performance
  
  Average corruption score
  
  Non-cooperative tax jurisdictions
  
  Average political stability score
  
  Average rule of law score