Clarity AI Regulatory Disclosures
Resources and Disclosures
Regulatory Overview
Methodologies
ESG Ratings
Clarity AI ESG Ratings measure financially material environmental, social, and governance (ESG) risks and opportunities compared to their peers within the same industry classification. The assessment provides a standardized numerical rating from 1 to 100, where 100 represents the highest performance level (i.e., lowest risk level).
SDGs Alignment Scores
Clarity AI’s Sustainable Development Goals Alignment methodology evaluates corporate contributions to the United Nations framework by assessing both commercial activities and operational practices. Designed for asset managers and asset owners, this framework helps them build, monitor, and report on sustainable portfolios. It is also used by companies seeking to benchmark and disclose their own SDG alignment. The coverage spans approximately ninety-nine percent of firms within major global indices, enabling consistent comparison across companies and sectors.
Climate Transition - Net Zero Alignment
The Climate Transition – Net Zero Alignment rating is a forward-looking analytical product designed to evaluate the alignment of companies’ decarbonization trajectories with the net zero trajectories required by the Paris Agreement.
The primary objective is to support investors and ESG managers in analysing corporate climate performance, monitoring portfolio alignment, and informing engagement strategies as part of their decarbonisation planning. Grounded in the Net Zero Investment Framework (NZIF) issued by the Institutional Investors Group on Climate Change (IIGCC), the methodology uses a rules-based, primarily impact-focused model, prioritizing real-economy GHG emission reductions as the key to mitigating systemic financial transition risks.
Transition Plan Assessment
The Transition Credibility Assessment is a sector-specific analytical framework designed to evaluate the credibility of corporate plans to decarbonise their business models in line with global net-zero goals.
The primary objective is to help investors identify companies exposed to low-carbon transition risks and opportunities, particularly those with carbon-intensive business models, and to support their decision-making across three key use cases: portfolio monitoring and risk management, stewardship and engagement, and regulatory compliance.
The approach is industry-specific, integrating a quantitative assessment of corporate performance with an evaluation of climate-related disclosures. This combined approach enables a more comprehensive assessment of transition plan credibility.
Global Norms Violations
The objective of the Global Norms Screening Methodology is to establish a robust, transparent, and criteria-driven framework for assessing corporate alignment with internationally recognized standards on sustainable business conduct. The methodology is grounded in granular evaluation criteria aligned with the specific expectations set out in:
- United Nations Global Compact (UNGC) Principles,
- OECD Guidelines for Multinational Enterprises (OECD), and
- United Nations Guiding Principles on Business and Human Rights (UNGP) Principles.
SFDR Sustainable Investment
The Clarity AI SFDR Sustainable Investment Methodology provides a rules-based framework for assessing whether individual investments in organisations and/ or securities satisfy the sustainable investments (SI) criteria set out in Article 2(17) of Regulation (EU) 2019/2088 (SFDR).
Its objective is to provide financial market participants with a consistent, transparent analytical input to support their own determination of the proportion of sustainable investments held within Article 8 and Article 9 funds, and to assist in the preparation of the related regulatory disclosures. The output of this methodology constitutes Clarity AI’s opinion and does not represent a legal determination of regulatory compliance, which remains the responsibility of the financial market participant.
MiFID II Sustainability Requirements
The Markets in Financial Instruments Directive, also known as MiFID II, is a European Directive that came into effect in 2018. It aims to strengthen investor protection and improve the functioning of financial markets, making them more efficient, resilient, and transparent.
In 2021, MiFID II was amended to incorporate sustainability requirements, as part of the EU’s broader Sustainable Finance agenda. This amendment requires financial advisors to:
- Ask users about their sustainability preferences as part of the suitability assessment
- Integrate those preferences into product recommendations
- Consider three dimensions of sustainability preference:
- Taxonomy-aligned investments (EU Taxonomy for sustainable activities)
- Sustainable Investments as defined under Article 2(17) of SFDR
- Principal Adverse Impacts (PAIs) — products that consider negative sustainability impacts
In that context, Clarity AI provides a comprehensive dataset that allows financial institutions to classify the products they offer to investors in line with the three dimensions of the suitability requirements of MiFID II.
Ratings Governance
Clarity AI is committed to ensuring the independence, integrity, and impartiality of its products and services, including its ESG rating activities. Consistent with its values and culture of openness, accountability, and excellence, Clarity AI has updated its governance framework for the determination and issuance of its ESG rating products to detail its approach to ensuring the independence, integrity, transparency, quality, and good governance of its ESG rating products.
Purpose
The ESG Ratings Governance Policy describes the governance bodies, roles and responsibilities that govern the development, approval, maintenance, and oversight of our methodologies, and the calculation and approval of our ESG ratings.
Effective governance is paramount to maintaining the integrity and credibility of our ESG ratings, fostering trust, and supporting informed decision-making in the sustainable finance ecosystem.
Scope
This Policy applies to all the ESG rating activities of Clarity AI and to all personnel involved in ESG rating activities.
Principles
Clarity AI’s ESG ratings are rule-based assessments formed by applying Clarity AI’s published methodology to information about rated items. The principles set out below govern how those assessments are formed, reviewed, disclosed and applied. Clarity AI’s ESG ratings represent its opinion at the date of issuance, issued non-solicited, unless otherwise disclosed, and do not represent statements of fact in respect to the sustainability characteristics, risks or impact of a rated item.
The following core beliefs underpin the governance of our ESG Rating Activities, and ensure Clarity AI methodologies are independent, transparent, rigorous, systematic, applied on a continuous basis, and capable of justification, and that the resulting ESG ratings are independent, comparable, impartial, of adequate quality and based on reliable information.
- Independence and impartiality: Ensuring that Clarity AI ESG ratings are determined independently, free from undue influence from internal or external parties, conflicts of interest, or external pressures. Any conflicts of interest, including potential or perceived, are managed according to Clarity AI Conflict of Interest Management Framework and underlying Policies.
- Integrity: Upholding high ethical standards and honesty in all activities, with mechanisms to prevent misconduct and conflicts of interest. Our personnel act in accordance with applicable laws, regulations and Clarity AI’s internal Policies.
- Transparency enabling comparability: Providing clear, accessible information about methodologies, data sources, key assumptions and limitations, the meaning of our ESG rating scales, and the processes through which ratings are determined, reviewed and updated, to build trust and enable stakeholder verification of data sources, and understanding and comparability of ESG ratings, if needed. Where applicable, we present environmental, social and governance factors separately, and disclose any aggregation weights, so that users can understand the drivers of an ESG rating.
- Consistency and Reliability: Clarity AI ESG ratings reflect a documented, evidence-based assessment, based on a uniform application of the defined methodologies across rated items within the same scope. Furthermore, ratings are based on thorough analysis of all relevant information available to us, that is relevant to the analysis according to our methodologies, ensuring their reliability. Analytical judgement, where and if exercised, is bounded by methodology, subject to peer review and approval by the Methodology Committee and Ratings Approval Group, and free from considerations external to the analytical framework.
- Rigorous: Clarity AI leverages existing scientific standards and best practices, and applies adequate controls and reviews during the methodology development and ratings calculation processes.
- Engagement with rated items: Clarity AI notifies rated items of ESG ratings prior to publication where the regulation requires to do so, and provides them with an opportunity to flag factual inaccuracies through a documented process. Complaints are handled in accordance with our published Complaints and Reasoned Concerns Handling Policy.
- Use of publicly available information: Clarity AI aims at informing its ESG ratings by publicly available information.
- Adequate resources and competence: ESG Ratings Activities are carried out by dedicated Personnel, who are assigned specific roles and responsibilities such as to safeguard the independence of the ESG rating activities and the resulting ESG ratings. Personnel involved in ESG rating activities possess knowledge, skills and experience appropriate to their roles.
- Records, documentation and auditability: Decisions, methodology changes, individual ESG ratings, complaints, conflict-of-interest disclosures and ESG ratings-related decisions are documented and retained in accordance with applicable law and our internal record-keeping policies, so that they can be reconstructed and reviewed.
- Regular reviews and updates: Clarity AI reviews its methodologies on an ongoing basis and at least annually, according to the applicable Methodology Development and Review Procedure, and makes information available to the public, as well as to rated items and users accordingly.
The principles provide the strategic foundation of Clarity AI ESG rating activities and are embedded into our day-to-day behavior.
Governance and Oversight
The governance structure of Clarity AI ESG rating activities is designed to ensure independence, clear accountability, and effective oversight at each stage of the ESG rating determination process, and includes:
- The Oversight Function, that is mandated to ensure the oversight over all aspects of the provision of Clarity AI ESG ratings;
- The Methodology Committee, that is mandated to ensure Clarity AI methodologies are fit for purpose, rigorous, transparent, systematic, independent of undue influence, and capable of justification, and that they include all the relevant information as required by applicable laws
- Ratings Approval Group, that is mandated to confirm the ESG ratings have been determined in accordance with the relevant methodology, that has been applied transparently and continuously, and that the resulting ESG ratings meet the quality conditions of Clarity AI, including that they are reliable and independent of undue influence.
Policy Review and Updates
Clarity AI monitors and evaluates the adequacy and effectiveness of this ESG Ratings Governance Policy on a regular basis and at least annually.
Version 1.0 – Effective June 2026
Clarity AI reserves the right to update this summary from time to time to reflect changes in applicable law, regulatory requirements, business activities or governance arrangements.
Conflicts of Interest
Clarity AI is committed to ensuring the independence, integrity and impartiality of its products and services, including its ESG Rating Activities. Consistent with its values and culture of openness, accountability and excellence, Clarity AI has implemented a conflict of interest management framework designed to identify, assess, prevent, manage and, where appropriate, disclose conflicts of interest.
The framework applies across Clarity AI’s business operations and supports the proper management of both institutional and personal conflicts of interest, helping to ensure that ESG Rating Activities are performed independently and free from improper influence.
Main Sources of Conflict of Interest Risks
Conflicts of interest may arise from Clarity AI’s organizational structure, business relationships, commercial activities, ownership interests, personnel activities or access to information. Such conflicts may be actual, potential or perceived and may arise at either an institutional or personal level.
Clarity AI periodically reviews the principal categories of actual, potential and perceived conflicts of interest and where appropriate, conducts in depth conflict of interest assessments of client relationships and other business relationships to identify situations that may require additional review, safeguards or mitigation measures. The principal categories identified where conflicts of interest could potentially arise are set out below.
To see our conflict of interest risk inventory, please go here.
Independence of ESG Rating Activities
- Clarity AI maintains independence from any political or economic influences or constraints and implements appropriate policies and procedures to ensure its business interests do not impair the independence, impartiality or integrity of its products and services, including its ESG rating activities.
- ESG rating activities and the resulting ESG ratings are independent and are not influenced by commercial relationships, fees or other business considerations.
- Clarity AI maintains separation between analytical and commercial functions and implements organisational, operational and technological safeguards designed to support the independence of ESG rating activities.
- Personnel performing core ESG rating activities are subject to enhanced independence requirements, including disclosure, recusal and conflict management obligations. Such personnel do not participate in commercial or sales activities, are not influenced by business relationships or revenue considerations, and their remuneration is not linked to the outcome of any ESG rating.
- The Oversight Function provides independent supervisory oversight of the implementation of independence safeguards and the Compliance Function’s conflict of interest management activities.
Key Controls
Clarity AI implements a range of controls designed to identify and manage conflicts of interest, including:
- Separation of analytical and commercial functions;
- Role-based access controls and information barriers;
- Restrictions on inappropriate influence over ESG Rating Activities;
- Training and awareness programs;
- Conflict of interest disclosure requirements;
- Conflict registers and escalation procedures;
- Recusal requirements where conflicts arise;
- post-employment restrictions (cooling-off periods) for rating analysts and senior management; and
- Periodic review and monitoring of conflicts of interest.
Governance and Oversight
- The Compliance Function oversees the implementation of Clarity AI’s Conflict of Interest Management Framework. This includes reviewing disclosures, maintaining conflict registers, monitoring compliance with applicable policies and procedures and assessing the effectiveness of mitigation measures.
- The Oversight Function provides independent supervisory oversight of the Compliance Function’s implementation of the Conflict of Interest Management Framework, including reviewing the adequacy of mitigation measures and escalating significant concerns to senior management where appropriate.
- Clarity AI maintains procedures for identifying, assessing and managing conflicts of interest and retains relevant records of such disclosures, assessments and mitigation measures. Conflicts of interest are assessed on a risk-based basis and may be escalated to senior management where appropriate.
- Clarity AI periodically reviews its conflict of interest risk inventory and related controls to ensure they remain appropriate and effective.
Business Activities
Clarity AI currently does not provide consultancy, advisory, investment advice, credit ratings, benchmark administration or audit services. If Clarity AI were to provide such services in the future, appropriate measures would be implemented to comply with applicable regulatory requirements, including any required structural separation of activities.
Raising Concerns
Concerns regarding potential conflicts of interest may be raised through Clarity AI’s established compliance channels or by contacting the Compliance Function, including through Clarity AI’s confidential whistleblowing channels. Personnel raising concerns in good faith will be protected in accordance with Clarity AI’s Whistleblower Policy.
Framework Review
This Framework is reviewed on a yearly basis or as needed, by Clarity AI Compliance Function.
Version 1.0 – Effective May 2026
Clarity AI reserves the right to update this summary from time to time to reflect changes in applicable law, regulatory requirements, business activities or governance arrangements.
Corporate Structure
Pricing Policy
Clarity AI is committed to ensuring the independence, integrity and impartiality of its products and services, including its ESG rating activities. Consistent with its values and culture of openness, accountability and excellence, Clarity AI has updated its pricing policy to detail its approach to ensuring fair, reasonable, transparent, and non-discriminatory treatment of the users of its ESG ratings and other related products and services.
Purpose
This Pricing Policy sets out the principles, operational framework and governance arrangements that apply to the determination and application of fees charged by Clarity AI for its ESG ratings and other related products and services.
Scope
This Policy applies to all pricing and any related discount approvals for Clarity AI developed ESG ratings and other related products and services, for both business models it operates.
Specifically, the policy covers: (i) all ESG ratings within scope of Regulation 2024/3005 offered by Clarity AI Europe S.L.; and (ii) other related products and services offered together with such ESG ratings.
Business Model and Client Segments
Clarity AI operates a subscription-paid (investor-paid) business model for the products in scope of this policy – Investor Segment. Fees are charged to clients who subscribe to Clarity AI’s products for their investment decision-making, portfolio analytics, or business purposes.
Clarity AI also operates an issuer-paid business model and does charge fees to entities that are the subject of an ESG rating – Corporate Segment.
At this point in time, less than 2% of Clarity AI revenue is derived from the issuer-paid business model.
Core Principles
- Fairness – All clients are offered pricing based on transparent, pre‑defined parameters. Prices may only vary according to predefined criteria, as set out in this Policy, ensuring that pricing remains proportionate and commercially appropriate across all client segments. Prices are derived algorithmically from product characteristics, and usage.
- Reasonable – Prices are proportionate to the value delivered and to the cost of producing the service.
- Transparency – Pricing principles, the components of the price formula and the bases on which prices may differ between clients are documented, capable of being explained, and disclosed externally on Clarity AI’s website.
- Non‑Discrimination – No general differentiation by client identity, geography, or other non‑commercial factors.
- Traceability – Each quote is stored in a transparent database for audit and review.
- Independence from rating outcomes – No price, discount, refund, credit, rebate or other commercial concession is linked to the level or content of any ESG rating, to changes to a rating, or to a client’s response to it.
- Separation between business models – Pricing, commercial decisions and revenue streams from Clarity AI’s subscription-paid business and its issuer-paid business are kept separate. No commercial benefit conferred under one business model is offered or made conditional on activity in the other.
Pricing Determination
Pricing determination comprises four distinct components:
(1) Determination of the base price for each module is anchored in the costs Clarity AI actually incurs to produce and deliver the module, and the competitiveness of the product/market.
Scaling of the price and application of discounts is permitted only on the following basis, each supported by a written justification referencing one of these bases: (a) Client size (AuM or Revenues); (b) Number of coverage companies and modules; (c ) Access method and service-level configuration; (d) Contract duration; (e) Pre-defined client categories where these are documented in advance (e.g. academic, non-profit, public sector); (f) permitted use case; and (g) Commercial discounts.
(2) Scaling of the base price, based on (a) Client Size (AuM or Revenues); (b) access method and service-level configuration. Base price may also be scaled based on permitted use cases. All list prices, multipliers, and exchange rates are centrally controlled. No manual overrides of price formulas are permitted. Equivalent clients receive equivalent pricing for the same configurations.
(3) Application of discounts, which is automated and based on clear and strictly controlled rules, such as resulting prices remain fair.
(4) Calculation of the final price is made based on the formula:
List Price = Base Price × Size Multiplier × Exchange Rate × Access Method Factor
Final Price = List Price × (1 − Bundle Discount) × (1 − Contract length Discount) × (1 − AE Discount)
Governance
The Director of GTM Strategy owns this Pricing Policy. The Policy is subject to regular review, at least annually, to ensure alignment with current costs, market reality and regulatory requirements. Records are retained according to the Records Retention Policy.
Version 1.0 – Effective June 2026
Clarity AI reserves the right to update this summary from time to time to reflect changes in applicable law, regulatory requirements, business activities or governance arrangements.
Complaints & Reasoned Concerns
What’s the area of application of this policy?
This policy applies to all ESG ratings activities and ESG ratings products of Clarity AI within the scope of the ESG ratings regulation (EU Regulation 3005/2024). It does not apply to any other activity of Clarity AI.
What’s in scope?
This policy applies to Complaints and Reasoned concerns submitted to Clarity AI, in respect to the products and activities in its area of application.
A Complaint is an allegation of dissatisfaction, communicated to Clarity AI, regarding a group of or an individual ESG rating, on at least one the following topics:
(a) the sources of data used for an individual ESG rating, factual errors and mistakes;
(b) the way in which the rating methodology in relation to an individual ESG rating has been applied;
(c) whether an individual ESG rating is representative of the rated item or the issuer of the rated item.A Reasoned concern is an allegation of dissatisfaction, communicated to Clarity AI on matters related to the provision of ESG ratings that:
(a) are not a complaint; AND
(b) are in respect to any non-compliance with the ESG ratings regulation.Who can reach out?
You may file a Complaint, if you are a natural or legal person, and are:
(a) a user of ESG ratings; and/ or
(b) a rated item or a representative thereof; and/ or
(c) an issuer of rated items or a representative thereof.You may file a Reasoned concern if you are a natural or legal person who is:
(a) A client or a user of ESG ratings;
(b) A rated item or an issuer of a rated item
(c) A person accessing Clarity AI publicly available information
(d) Any stakeholder or industry organizationHow to reach out?
If you want to submit a complaint, use this dedicated email: complaints@clarity.ai
If you want to submit a reasoned concern, use this dedicated email reasonedconcerns@clarity.ai
How do we handle your submission?
Assessment and resolution of your Complaint or Reasoned Concern are subject to the following principles:
- Independence and Fair handling: Investigations are carried out independently, under Compliance independent oversight and coordination. Relevant impartial and free from conflicts of interest experts may also support the investigation.
- Timely resolution: Investigation and resolution timelines depend on the complexity of each Complaint or Reasoned Concern. Clarity AI is committed to investigate and communicate the outcome of such investigation within a reasonable period of time, unless such communication is contrary to applicable law. Where not prescribed otherwise by applicable law, the reasonable period of time is estimated at 4 weeks from the date of confirming the receipt of such Complaint of Reasoned Concern.
- Confidentiality: Complaints and Reasoned Concerns are subject to confidentiality rules and the identity of the Complainant and/ or Relevant Stakeholder is protected, according to the relevant legislation. Handling thereof is also subject to whistleblowing protections rules, if and where applicable.
- No retaliation: Retaliation against a sender is strictly prohibited, even if the investigation does not confirm any wrongdoing.
What is not scope?
The following communications are not in scope for this policy:
(a) Standard requests for information or general inquiries.
(b) General disagreement with the methodology or products that do not allege error or non-compliance.
(c) Communication in respect to any other activities carried out by Clarity AI, that are not related to the provision of ESG ratings
(d) Contractual disputes and claims relating to technical malfunction of Clarity AI services.
(e) Communications from Regulators or Public Authorities acting in their official capacity.Want to know more?
If you have further questions about our Complaints and Reasoned Concerns handling policy, you may contact our Compliance department.