Beyond SFDR Reporting: Analyze and Benchmark Your ESG Performance

Product Updates December 16, 2022

Clarity AI helps firms expand their business intelligence with reliable and comparable SFDR data

A recent survey conducted by EY around SFDR and EU Taxonomy shows that 77% of firms are looking to become market leaders in ESG to accommodate the shift in client preferences and avoid lagging behind. The survey reflects the views of firms managing a total of $37 trillion worth in assets (close to 33% of the global AUM), and their ambitions to go beyond ESG regulatory compliance. Competition to lead the industry is on, and will just keep growing in the future.

In order to lead the market, firms must first understand where they stand through reliable, comparable data across their industries.To this purpose, EU Regulations can be leveraged as a standard in ESG performance assessment. The Principal Adverse Impacts (PAIs) of the SFDR cover critical areas of sustainability such as greenhouse gas emissions, biodiversity, water and waste management, or social and employee matters.

Looking at a PAI number, such as GHG emissions, certainly helps in understanding the impact that the company has on the environment. However, it doesn’t provide context of how it compares against its peers in the industry. What is the standard for comparable economic activities? Is there room for improvement? And how much?

This is why Clarity AI’s users can now access the “Peer percentile” functionality, that will give them a new layer of useful information beyond their individual result for each PAI.  

This will help financial market participants to make better and more informed decisions about policies that are industry dependent, as well as excluding the worst performers from their investment strategies.

Starting January 2023, financial market participants will have to consider principal adverse impacts for their investment decisions, so this new feature –now live on our platform– becomes essential for SFDR compliance. 

Contact us to learn more about our SFDR solution and methodology and request a demo.

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