• Sustainable Finance Disclosure Regulation
  • SFDR
  • ESG
  • Asset Managers
  • Taxonomy Regulations
  • Taxonomy
April 27, 2021

Race to comply with SFDR and taxonomy rules

Product positioning and data infrastructure worries persist, multi-dimensional integration and datasets needed to meet rising product benchmarks and enhance credibility

The sustainable investment and financing landscape is set to be redefined as Sustainable Finance Disclosure Regulation (SFDR) and EU taxonomy regulations take effect. We spoke with multiple asset managers to understand the level of preparedness and their approach towards the EU rules. In this issue, we provide our insights around strategic product choices, operational challenges and best practices. We observe

 

  • Caution and concerns over low-alignment and degree of alignment for justifying Article 9 classification. Many evaluating ways to upgrade Article 6 and Article 8 funds
  • Most face significant challenges over overall data infrastructure compounded by in-house bandwidth, lack of end-to-end market solutions, and regulatory ambiguity

While the compliance with SFDR and taxonomy regulations can be challenging in the near term, we believe asset managers can also use these regulations to enhance multi-dimensional ESG integration, bolster investor perception, build granular data sets, strengthen ESG monitoring, and improve ESG engagement.

 

To know more about CRISIL’s ESG research capabilities click here.