​New publication: Survey findings on principal adverse impacts reporting under SFDR

Reporting annually on principal adverse impacts (PAI) of investment decisions on sustainability factors is one of the key requirements of the SFDR Level 2. Sourcing and reporting on the PAI indicators will present significant challenges for asset managers. In order to assist managers in their preparations, Irish Funds has issued a new publication – “Principal Adverse Impacts Reporting – practical insights for the next stage of SFDR implementation”.

The paper provides a Q&A on implementing PAI reporting and the findings of a survey of ESG data vendors conducted by our ESG Servicing Data WG. The findings reveal patchy coverage on several ESG data points and a wide range of variance in the reported data with low levels of comparability. The paper notes that guidance from regulators would be welcome on how to address data gaps and on the use of “best efforts” until such time as sustainability reporting standards are in place under the CSRD.