The problem we solve

We support asset managers seamlessly transition to SFDR regulations.

Global Traditional Asset Manager

Bespoke solution for transparent and audit-ready SFDR reporting.

Client Challenges

A Canadian-HQ global traditional asset manager-based asset manager wanted to assess and evaluate potential funds for classification as Article 8/9 under SFDR regulations. However, they faced challenges in aligning their existing policies and processes with the stringent SFDR requirements, addressing data gaps, and ensuring transparent, auditable fund-level disclosures.

Our Approach

Crisil's approach involved,

Assess alignment against Article 8/9 requirements

• We studied the client’s ESG integration approach in detail to assess alignment with SFDR requirements. This included assessing the methodology adopted to mitigate principal adverse impact, good governance assessment, and engagement strategy.
  
• We adopted a bottom-up approach to aggregate the PAI metrics with appropriate sourcing and attribution to ensure transparent and auditable data sets. We addressed data gaps using reliable industry average / regional proxies with detailed assumptions and workings. We later consolidated these metrics at a portfolio-level.
• We used our bespoke EU Taxonomy assessment methodology to assess entity -level and portfolio-level EU Taxonomy alignment. The granular approach provides detailed context across NACE mapping, technical screening, do no significant harm assessment, and minimum social safeguard assessment.
  

Benchmarked with peer funds: We leveraged publicly available peer fund disclosures to conduct benchmarking study on ESG integration approach, PAI performance, and EU Taxonomy alignment. Based on the assessment, we recommended potential fund category classification and action plans to address gaps (if any).

Supported in SFDR reporting: Supported in SFDR-related disclosure including creating portfolio-level dashboards for ongoing monitoring and providing datasets for PAI statements and product-level disclosures.

Impact Delivered
 

• Preliminary analysis helped identify potential sustainable fund classification and get buy-in from respective portfolio managers.
  
• Addressed gap in existing policies and process to ensure alignment with regulatory requirements.
  
• Set up required datasets in place for SFDR-related disclosures – assessed 200+ companies across multiple funds.

Questions

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