#SFDR

[esgdatainrate]

Can New Regulations Solve Greenwashing Concerns in Sustainable Finance?

Excerpt of insights from our Founder: Christoph Müller

As the sustainable finance sector continues to grow, so do concerns about greenwashing. Recent regulations like the EU Taxonomy and SFDR aim to address these issues, but can they truly solve the problem? Let’s delve into this complex question.

The Challenge of Defining Sustainability

Our founder, Christoph Müller, aptly points out that sustainability is a broad concept lacking a universally accepted definition applicable to financial markets. This ambiguity has led regulators to focus on process-level requirements and controls.

While regulations like the EU Taxonomy and SFDR are steps in the right direction, defining the processes Financial Market Participants (FMPs) must follow to label investments as “sustainable,” it’s debatable whether this approach is sufficient to prevent greenwashing.

The Limitations of Process Compliance

Process compliance alone may not meet customer and general market expectations. As Mueller notes, “The final decision about greenwashing is made by the market and therefore by the customers.” This insight highlights the gap between regulatory compliance and market perception.

The Cost-Benefit Analysis of Process Regulations

Greenwashing has been pervasive in the sustainable finance market; one could argue that this is largely due to a lack of availability of what parameters to look at when labelling something as “green”. New regulations are changing this equation. However, the impact of these regulations is unclear, as they increase the cost of both genuinely sustainable products and greenwashing attempts. This shift could have two potential outcomes:

A reduction in ‘sustainable’ assets under management due to increased costs.

An incentive for FMPs to integrate regulators’ definition of ‘sustainable’ more deeply into their investment selection process.

The Regulatory Impact: A Double-Edged Sword

While regulations aim to improve transparency and reduce greenwashing, their impact is still to be seen in the market. As Mueller points out, “It’s not yet clear whether all the efforts to avoid greenwashing will lead to a fall in sustainable investments or improve the quality of what investments we consider sustainable.”

[educationisimp0]

Understanding the Sustainable Finance Disclosure Regulation (SFDR) of the EU

Globally, businesses are incorporating sustainable financing into their daily operations. The European Commission has put new and revised legislation into place as part of the transition to a low-carbon and resource-efficient economy to enhance its action plan on sustainable financing. The action plan’s foundational element is thought to be the EU Taxonomy. A few additional rules are being introduced for organizations to become familiar with. One of these is the Sustainable Finance Disclosure Regulation (SFDR), which helps financial institutions become more transparent about sustainability and shift resources towards more sustainable firms.

Describe SFDR. 

The Sustainable Finance Disclosure Legislation (SFDR), the first legislation put in place by the EU, attempts to shift capital flow in favor of sustainable finance. To avoid greenwashing, SFDR offers transparency on sustainability in the financial market.

When did SFDR become effective? 

The European Union (EU) joined the net-zero campaign to enact financial disclosure standards through the NFRD and the CSRD because it takes sustainability and climate change seriously. To bring sustainable finance back into the spotlight for the EU, the Sustainable Finance Disclosure Regulation, or SFDR, was introduced. On March 10th, 2021, the SFDR framework went into effect to include crucial activities for organizations to comply with schedule.

SFDR Articles 6, 8, and 9 and their Requirements for Disclosure Asset managers must adhere to the mandatory ESG data disclosure standards set forth under the SFDR framework. The articles’ main goals are to increase organization investment strategy transparency and discourage “greenwashing.” Additionally, it aids in refuting claims made by businesses that say their goods are sustainable.

According to the SFDR categorization, a fund can be categorized as an article 6, 8, or 9 funds depending on its qualities and degree of sustainability:

Funds without a sustainability focus, per Article 6

Article 8: Funds promoting social or environmental traits

Article 9: Funds whose primary goal is sustainable investment

Regardless of whether the fund is marketed as ESG or not, article 6 essentially requires asset managers to present the incorporation of sustainability risks in their funds. Contrarily, investments that are marketed as ESG must be classified as either an article 8 …………

Read more- blog/what-is-sustainable-finance-disclosure-regulation/

[rotary-supercollider]

Tumblr horse race!

Before the race starts, let’s run down the racer’s profiles.

(Note: horses 2, Mamba, and 3, Crap, have been removed from the race, for poor health and DUI charges, respectively.)

Horse 1, Paul Revere, is right here, and if the weather’s clear, sure thing. He’s the ghost of the horse that won last year.

Horse 4, Taboo, [DATA LOST]

Horse 5, Big Louise, is said to be the largest horse ever entered in our competition. Her secret? Instead of never skipping leg day, her routine is exclusively leg day!**

Horse 6, Serious Stanley, shot the previous 2 announcers for trying to make a joke about him, so I’m not going for it.

Horse 7, midnight revolver, smokes an entire pack of cigarettes at once before every race. We don’t know what their eyes look like, since behind their sunglasses is only another pair of sunglasses, stretching into a terrifying infinity.

Horse 8, *, wanted to be a chef growing up, but he couldn’t fit onto the guys head to Ratatouille him. He lives his dreams vicariously by pretending the racetrack is potatoes that need to be mashed.

Horse 9, Princess Peach, wields the Dark Lady’s Unspeakable Greatsword of Killing, retrieved from the Wastes of Dal’iaa. He also enjoys gardening.

Horse 10, Rosencrantz and Gildenstern Go To White Castle, claims to have escaped a secret facility where he was forced to fight an army of mantis-men. We’re not sure if that’s true, but he’s got six good legs, so that’s something.

Horse 11, Declan’s royal Jack of Spades, is former prime minister of England Boris Johnson, who made an ill-advised pact with the fey and will be trapped in this form forever unless he wins this race.

Horse 12, Dr. Capaldi, is hurnnjj glabuuu Alena shave fUsft she’d sfDr fesog dir Signs einriebest signse Sofnsbholdn. Isn’t that neat?

The announcer will chime in with commentary on who’s winning the race every 24 hours. The race’s winner will receive a lifetime supply of salmon and ownership of Dal’iaa’s Maw, an eternal storm and the only place the Dark Lady’s Unspeakable Greatsword of Killing can be unmade.

**(Drawing fanart of any of the participant horses without the express written consent of the THRL is a violation of copyright law. We understand that the community of Tumblr is composed of understanding, law-abiding citizens and that this will not be an issue.)

*Face-off, starring Nicolas Cage and Kevin Bacon

[esgtrends]

Inrate's Business Activity Impact (BAI) Assessment

Move beyond biased reports. Leverage Inrate’s BAI to objectively assess a company’s environmental & social impact for informed ESG investing. Discover sustainability champions and laggards based on real over reported impact.

Inrate’s Business Activity Impact (BAI) assessment provides an objective evaluation of a company’s environmental and social impact by analyzing the actual business activities rather than relying solely on corporate disclosures.

Key Features:

Objective Analysis: BAI uses a proprietary framework to assess the real impact of business activities, helping investors identify sustainability leaders and laggards. 

Balanced Approach: The assessment balances financial materiality with impact, aligning with leading sustainability regulations like the EU Taxonomy, CSRD, and SFDR.

Granular Insights: Inrate offers detailed impact scores for each corporate business activity, covering aspects like GHG emissions, resource exploitation, and social equity.

Mitigating Bias: By focusing on actual business activities, BAI reduces susceptibility to greenwashing and biased reporting.

Customizable Data Models: Inrate’s research can be tailored to meet specific investment objectives and regulatory requirements.

Features of Inrate’s Business Activity Impact (BAI)

1. Align with Leading Sustainability Regulations 

2. Mitigate Bias

3. Reduce Susceptibility to Greenwashing

4. Discover Sustainability Leaders and Laggards

Inrate’s BAI assessment empowers investors with actionable insights, enabling them to make informed decisions based on the true sustainability impact of their investments.

Why Choose Inrate: 1. Impact Lens 2. Flexible Data Models 3. Dedicated Client Support 4. Regulatory Alignments

Read More : https://inrate.com/esg-data-solutions/inrates-business-activity-impact/

About Inrate:

Inrate, a Sustainability Data and ESG Ratings company, helps financial institutions view sustainable finance from an “impact” lens. The contemporary responsible investor needs data that supports a variety of use cases and stands up to scrutiny. Inrate scales the highest quality and standards and deep granularity to a universe of 10,000 issuers, allowing portfolio/fund managers, research, and structured product teams to make confident decisions.

[zehub]

SFDR : les fonds article 9 dans le creux de la vague

Les fonds durables semblent ne plus faire recette, même s’ils restent dominants en parts de marché en Europe.

[amoraworldz]

sfdr trabalho de merda

[raglobal1]

The Global Perspective: ESG Assurance Trends Around the World

In today’s rapidly evolving business landscape, the importance of Environmental, Social, and Governance (ESG) assurance cannot be overstated. Companies worldwide are recognizing that sustainable practices are not just beneficial for the planet and society but are crucial for their long-term success and credibility. As such, ESG assurance — the process of verifying and validating ESG claims — has become a cornerstone of corporate transparency and accountability. This blog explores the current trends in ESG assurance globally, with a special focus on the role of organizations like RA Global in driving sustainability assurance forward.

The Rise of ESG Assurance

ESG assurance has emerged from the need to validate the sustainability information that companies report. This need is driven by increasing regulatory requirements, investor demands, and consumer expectations. As the global economy moves towards more sustainable practices, the assurance of these practices ensures that the reported data is accurate, reliable, and comparable across different jurisdictions.

Regional Trends in ESG Assurance

Europe: Europe leads the way in ESG regulation and assurance. The EU’s Sustainable Finance Disclosure Regulation (SFDR) and the Non-Financial Reporting Directive (NFRD) set high standards for transparency and reporting, pushing companies towards rigorous ESG assurance practices.

North America: In the United States and Canada, ESG assurance is becoming more standardized with the Securities and Exchange Commission (SEC) proposing rules for enhanced ESG disclosures. This regulatory push is making ESG assurance an integral part of corporate reporting.

Asia-Pacific: Countries like Japan and Australia are rapidly catching up, with voluntary guidelines increasingly giving way to mandatory reporting requirements. This shift is boosting the demand for ESG assurance services to verify compliance and enhance credibility.

Middle East and Africa: In regions like the UAE, where RA Global operates, there is a growing emphasis on aligning economic development with sustainability goals. RA Global plays a pivotal role in providing ESG assurance services, ensuring that companies in these regions meet both local and global sustainability standards.

The Role of Sustainability Assurance

Sustainability assurance goes beyond traditional audit and compliance roles. It involves a holistic approach to assessing not just the accuracy of data, but also the effectiveness of a company’s sustainability strategy. This form of assurance evaluates the long-term viability of ESG initiatives, ensuring that they are not just for show but are genuinely embedded in the company’s operations.

The Impact of Technology on ESG Assurance

Advancements in technology are playing a critical role in shaping the future of ESG assurance. Automated tools and AI-driven platforms are making it possible to collect and analyze large volumes of ESG data more efficiently. This not only reduces the time and cost associated with ESG reporting but also enhances the accuracy and reliability of the data being reported.

Conclusion: The Path Forward

As we look towards the future, ESG assurance will undoubtedly become more integral to business operations worldwide. The trends indicate a move towards stricter regulations, greater transparency, and higher accountability. Companies like RA Global are at the forefront of this shift, providing crucial sustainability assurance services that not only help businesses comply with regulations but also build trust with stakeholders and contribute to a more sustainable world.

In conclusion, ESG assurance is more than just a trend — it’s becoming a business imperative. As companies globally strive to meet the increasing demands of stakeholders for more sustainable and responsible business practices, the role of ESG assurance in building a transparent, accountable, and sustainable future cannot be underestimated.

[techtrends-today]

7 Emerging Trends in ESG

What's Changing the ESG Landscape?

Environmental, Social, and Governance (ESG) factors are becoming increasingly significant for businesses worldwide. Here are seven key trends reshaping the ESG landscape:

Climate Resilience: Companies are prioritizing long-term climate strategies. The World Economic Forum reports that climate-related risks top global concerns.

Green Finance: Investment in sustainable projects is on the rise. Green bonds hit a record $300 billion in 2022.

Transparency and Reporting: More stringent regulations are emerging. The Sustainable Finance Disclosure Regulation (SFDR) by the EU seeks to improve transparency.

Social Equity: Companies are focusing on diversity and inclusion. For example, Salesforce has committed to a diverse workforce with 50% women by 2025.

Supply Chain Responsibility: Brands are ensuring sustainability across their supply chains. Nike’s “Move to Zero” initiative aims to achieve zero carbon and zero waste.

Technological Integration: AI and blockchain are used for better ESG data management. IBM’s blockchain technology helps track ethical sourcing.

Stakeholder Engagement: Businesses are involving stakeholders in their ESG initiatives. Unilever’s Sustainable Living Plan has garnered significant consumer support.

How to Extract Value from ESG?

Enhanced brand reputation, investment opportunities, and regulatory compliance are key benefits for companies with strong ESG practices. Positive public attention, outperforming ESG funds, and adherence to regulations like the EU’s CSRD highlight the importance of sustainability.

FAQs

Q1: What is ESG?

A1: ESG stands for Environmental, Social, and Governance, crucial factors in measuring a company's ethical impact.

Q2: Why is ESG important?

A2: ESG factors contribute to long-term sustainability and can improve financial performance.

Q3: How can companies start with ESG?

A3: Begin by assessing current practices, setting clear goals, and regularly reporting progress.

Case Studies

Patagonia is known for its environmental initiatives, including using recycled materials in products.

Google has achieved 100% renewable energy for its global operations, setting a benchmark for tech companies.

For more detailed insights, visit the World ESG and Climate Summit.

By staying ahead of these emerging ESG trends, businesses can not only contribute to a sustainable future but also unlock significant value.

[esgdata1992]

Sustainable Finance Disclosure Regulation (SFDR) Data

Transcend the challenge of scarce data on Principal Adverse Impact (PAI) indicators with insights into issuers’ involvement across 14 mandatory and 33 voluntary PAI indicators. Leverage Inrate’s sustainability impact assessment on 10,000+ issuers for comprehensive SFDR reporting.

Detailed PAI Indicator Research

Detailed PAI indicator research that delves deep into sustainability issues and identifies truly material disclosures

Assessment of Real Impact

Assessment of real impact by evaluating corporate policy and action, company involvement in products with an adverse sustainability impact, and ESG controversies

Proactive Tracking of Regulatory Changes

Proactive tracking of regulatory changes by a dedicated research team that ensures your analyses are aligned with evolving regulatory standards

Read More: https://inrate.com/esg-data-solutions/compliance-data/sfdr/

[esgdatainrate]

Understanding the Role of ESG Data in Sustainable Finance

In today’s investment landscape, Environmental, Social, and Governance (ESG) data has become indispensable for making informed and responsible investment decisions. As investors increasingly prioritize sustainability, the demand for comprehensive ESG data and solutions has surged.

Understanding ESG Data

ESG data encompasses a wide range of metrics that evaluate a company’s environmental impact, social responsibility, and governance practices. This data is crucial for investors aiming to align their portfolios with sustainable and ethical standards.

Why ESG Data Matters

Informed Decision-Making: ESG data provides investors with the insights needed to assess the sustainability and ethical impact of their investments. This leads to more informed and responsible investment choices.

Risk Management: By analyzing ESG data, investors can identify potential risks related to environmental, social, and governance issues, helping them mitigate these risks effectively.

Regulatory Compliance: With increasing regulatory requirements, such as the EU Taxonomy and SFDR, having access to reliable ESG data ensures compliance and transparency.

Inrate’s ESG Data Solutions

Inrate offers a comprehensive suite of ESG data solutions designed to empower investors with the tools they need to navigate the complexities of sustainable investing. Their solutions cover a broad spectrum of ESG metrics, providing deep insights into company performance across various indicators.

Unmatched Granularity: Inrate’s ESG data delves beyond basic metrics, offering detailed insights across environmental, social, and governance categories.

Customization: Tailor your ESG analysis to align with your specific values and investment goals, moving beyond generic assessments.

Transparency: Inrate ensures transparency by providing clear rationales behind every insight, empowering investors to make confident decisions.

The Future of ESG Investing

As the focus on sustainability continues to grow, the role of ESG data in investment decisions will only become more significant. Investors need to stay ahead by leveraging robust ESG data solutions that offer transparency, reliability, and comprehensive insights.

For more information on how Inrate can help you achieve your sustainable investment goals, visit their ESG Data Solutions page.

[educationisimp0]

Understanding the Sustainable Finance Disclosure Regulation (SFDR) of the EU 

The European Union (EU) has joined the net-zero movement to introduce financial disclosure standards through the NFRD and the CSRD because it takes sustainability and climate change seriously. The Sustainable Financing Disclosure Regulation, or SFDR, was introduced by the European Union in 2021 to highlight sustainable financing in the EU. Financial institutions must disclose their PAI, including greenhouse gas emissions, biodiversity, waste management, and human rights, to adhere to the SFDR framework. PAI disclosures are becoming increasingly crucial, and companies that don't disclose or don't comply with the fundamental criteria could suffer multifaceted short- and long-term implications.

[lizseyi]

JOIN SCI FOR ESG LEADERS’ SECURITISATION SUMMIT

Transition towards more concrete ESG outcomes and better risk management is a key priority for regulators, with banks and investors subject to increasing prescription regarding the management of their exposure to climate and sustainability risks. Several significant climate legislation and reporting mandates have recently been advanced or enacted, indicating that 2024 will be an important year for financial services providers to address sustainability in the securitisation market. SCI’s ESG Leaders’ Securitisation Summit examines the key themes and debates in this burgeoning sector, including the ramifications of the EU Green Bond Standard and the SFDR. The event also explores the role that securitisation can play in the emerging areas of transition finance and nature finance.

[esgtrends]

ESG Risk Ratings vs ESG Impact Ratings

With the emergence of regulations such as the EU Taxonomy, CSRD, and SFDR, the concept of impact materiality has proliferated in the market, marking an increased scrutiny on the comprehensiveness of ESG risk ratings. In this context, there has been increased interest in impact ratings leading investors to question, what really is the difference between ESG risk and ESG impact ratings?

Overview of Risk vs Impact

ESG risk ratings primarily assess how well a company manages its exposure to ESG-related risks that could potentially affect its financial performance. These ratings focus on the materiality of ESG factors to the specific industry and company, evaluating how effectively the organization mitigates these risks.

In contrast, ESG impact ratings measure the actual effect a company’s operations have on environmental and social outcomes, regardless of the financial implications for the company itself. These ratings attempt to quantify a company’s positive or negative contributions to issues such as climate change, biodiversity, human rights, or community development.

In terms used by global sustainability regulations, ESG risk ratings focus on financial materiality while impact ratings focus on impact materiality.

Methodology of Risk Ratings vs Impact Ratings

The methodology of risk ratings and impact ratings also vary significantly, with risk ratings often collecting data from publicly available disclosures, while impact ratings focus primarily on uncovering the operational impact of companies across the value chain. In the table below we compare the scope and methodology of conventional risk ratings to Inrate’s impact ratings.

Implications for Investors

The distinction between ESG risk ratings and ESG impact ratings has significant implications for investors. Impact ratings, while focused on externalities, extensively uncover reputational and regulatory risks for companies in the current landscape. The shortening time frame within which these risk manifest into factors causing value erosion has put impact at the forefront of the minds of even the sceptics.

Risk Management vs. Impact Generation

Risk-focused investors:

Those prioritizing ESG risk ratings are typically more concerned with protecting their investments from potential ESG-related downside. They aim to identify companies that are less likely to face regulatory challenges, reputational damage, or operational disruptions due to poor ESG practices. This approach may be particularly relevant for institutional investors with fiduciary responsibilities or those with a lower risk tolerance.

Impact-oriented investors:

Investors emphasizing ESG impact ratings are often looking to generate positive social or environmental outcomes or minimise negative sustainability impact alongside financial returns. This approach aligns with the growing trend of impact investing and may appeal to investors who want their capital to drive positive change.

Engagement and Stewardship Opportunities

Understanding both risk and impact ratings can inform investor engagement strategies. Investors can use this information to identify areas where companies can improve their ESG performance and engage with management to encourage positive changes.

For active investors, these ratings can guide proxy voting decisions and help prioritize which ESG issues to focus on in shareholder resolutions.

Portfolio Construction and Diversification

Investors can use insights from both risk and impact ratings to construct more balanced and diversified sustainable portfolios. This might involve selecting companies with strong risk management practices as a core holding, while allocating a portion of the portfolio to high-impact companies in emerging sustainable industries. A key factor in successfully integrating insights from different sources is ensuring that data providers offer full transparency, allowing data to be homogenized for method and context.

Why Choose Inrate: 1. Impact Lens 2. Flexible Data Models 3. Dedicated Client Support 4. Regulatory Alignments About Inrate: Inrate, a Sustainability Data and ESG Ratings company, helps financial institutions view sustainable finance from an “impact” lens. The contemporary responsible investor needs data that supports a variety of use cases and stands up to scrutiny. Inrate scales the highest quality and standards and deep granularity to a universe of 10,000 issuers, allowing portfolio/fund managers, research, and structured product teams to make confident decisions.

Read More :https://inrate.com/blogs/esg-risk-ratings-vs-esg-impact-ratings/