Key Takeaways
- In 2024, Clarity AI launched automated reporting tools that cut compliance time by up to 90% and consolidated 700 sustainability metrics into a single dashboard. AI-driven insights simplified portfolio analysis, helping investors align with mandates and make faster decisions.
- In 2025, financial institutions face escalating regulatory demands, driving the need for data quality, transparency, and adaptability. More holistic risk management approaches will emerge to address market volatility, while innovative sustainability products—focused on transition finance and nature-related data—will meet growing investor demand.
- Automated tools and AI-powered assistants will enable financial institutions to do more with fewer resources, helping them adapt quickly to regulatory shifts, streamline sustainability analysis, and focus on strategic growth—all critical in a dynamic and competitive market.
This year has brought increased attention to regulatory complexity, heightened awareness of climate risks, and growing interest in sustainability products aligned with investors’ mandates.
To help institutional investors, asset managers, and banks navigate these challenges, we focused our efforts on three critical dimensions—data, insights and analytics, and integration. In this article, we highlight key product developments from 2024 that supported financial institutions in overcoming three major challenges around:
1. Growing complexity of regulatory requirements
2. Multidimensional integration of sustainability factors
3. Deeper insights from vast and more complex data
2024 Focus: Simplifying Compliance and Sustainability Analysis
1.
REGULATORY COMPLIANCE
Up to 90% Time Saved in Reporting
Challenge
Adapting to complex and evolving regulatory requirements without increasing the burden on teams.
How We Solved It
Our automated reporting tools result in a 90% reduction in time typically spent on compliance processes.
Automated Reporting Tools For:
Expanding Our Offerings
We stayed ahead of the curve with robust and intuitive solutions
for new regulatory frameworks, including:
ESMA Naming Rules for fund labeling
UK SDR (Sustainable Disclosure Requirements)
Why This Matters
By reducing the administrative burden of compliance, we gave investment and banking entities the peace of mind, time, and resources to focus on strategic priorities and innovation.
Looking Ahead
“2025 is shaping up to be a critical year for testing the effectiveness of these regulations. Firms that prioritize data quality, transparency, and adaptability will be better positioned to navigate this evolving landscape and seize the opportunities it presents.”
Tom Willman
Regulatory Lead at Clarity AI
2.
PORTFOLIO MANAGEMENT
All Sustainability Metrics in One Single Screen
Challenge
Managing sustainability factors across diverse portfolios, often with disparate tools and fragmented data.
How We Solved It
We consolidated 700 sustainability metrics, including climate, SDGs, regulations, and more, into a single-screen dashboard. This intuitive tool allowed investors to build, edit, and monitor portfolios with ease and align investments with their sustainability mandates or institutional policies.
Expanding Our Offerings
We reduced the complexity of climate-related analysis with better visualizations
for climate transition and risk analysis and reporting:
Measure portfolio alignment with Net Zero commitments
Scenario modeling to evaluate financial risks under varying climate conditions
Why This Matters
By bringing all sustainability dimensions into one place, we enabled investors to ensure their portfolios meet clients' and market expectations while uncovering new opportunities for growth.
Looking Ahead
“Protecting investments, minimizing losses, and seizing opportunities in adaptation will be critical in the years ahead. Regardless of political discourse, the financial imperative to address climate risks and capitalize on the transition to a sustainable economy will drive meaningful action.”
Patricia Pina
Head of Product Research & Innovation at Clarity AI
3.
SUSTAINABILITY ANALYSIS
Unlimited Insights Generated with AI
Challenge
Increasing data explainability and insights from vast and complex datasets in less time.
How We Solved It
We brought GenAI to the front line to improve portfolio analysis. We supported our clients in making better decisions faster with instant insights, increasing their confidence and trust in company research and portfolio analysis.
Expanding Our Offerings
Available in early access, the AI Assistant provides:
Insights drawn from over 200,000 reports for company research
Conversational intelligence for company-level analysis and comparisons
Why This Matters
By blending AI with sustainability and financial expertise, we turn complexity into clarity, reducing analyst biases and the time spent on data collection and analysis, to focus on actioning insights.
Looking Ahead
“The growing use of AI-powered assistants—allowing users to interact dynamically with their portfolios—will enhance understanding of sustainability performance at a granular level.”
Lorenzo Saa
Chief Sustainability Officer at Clarity AI
Our Continued Commitment to Delivering Explainable, Quality Data
We recognize the challenges posed by sustainability data, both in coverage, and quality, and we are committed to addressing these head-on. While no dataset is without its limitations, we make it our priority to deliver explainable, high-quality data that supports informed decision-making.
By providing access to the source, raw data, and methodologies, we equip institutional investors and asset managers with the tools they need to critically assess and confidently rely on the insights they derive. Through our collaborative approach with all stakeholders, including associations and regulatory bodies, we are committed to driving the industry forward, enabling users to make smarter, more effective decisions that factor in the real-world impact of sustainability-related issues.
Looking Ahead to 2025: Trends Shaping the Future
As we look toward 2025, we see three key trends reshaping the sustainability space for financial institutions, coupled with a need for greater efficiency.
1
Coping with Complex Regulations
From the first compliance reports under the EU’s Corporate Sustainability Reporting Directive (CSRD) and the UK’s Sustainability Disclosure Requirements (SDR) to the continued rollout of ESMA’s naming guidelines, the focus will remain on preventing greenwashing and ensuring credibility in sustainability claims. Success in this evolving regulatory landscape will hinge on adaptability, data quality, and a commitment to meaningful action.
2
A More Sophisticated and Holistic Approach to Risk Management
Increased market volatility, the need for proactive risk management to build more resilient portfolios, and a growing focus on private markets for untapped new opportunities are pushing investment firms to adopt a more holistic and sophisticated approach to traditional ESG integration. Firms that prioritize technology upgrades, workforce training, and robust data governance will be better equipped to identify opportunities, manage risks, and deliver value in a rapidly changing market.
3
Innovation in Sustainability Products
The growing demand for sustainable finance from investors is driving the creation of innovative products that align with their values and mandates. Transition finance, nature, and biodiversity data will gain prominence, as the industry learns how to utilize this data for engagement, and ultimately long-term financial growth.
The Role of Efficiency and Technology
These trends will unfold in an environment that demands greater efficiency—doing more with fewer resources. To stay competitive, asset managers and other financial institutions will increasingly rely on AI and advanced technology to achieve their goals. From automating reporting to informing decision-making, tech-driven solutions will support institutions in navigating complexity and seizing opportunities in a rapidly changing market.
As we go into 2025, our commitment remains steadfast: to deliver the tools, data, and collaboration needed to help the financial system integrate the largest inflows of extra-financial information to thrive in a highly competitive and volatile market.
