Navigating sustainable finance regulatory reporting
As the shift towards sustainable investing continues to grow, meeting the increased reporting and compliance requirements has created a more complex landscape to navigate. We can help.
To help simplify compliance with sustainable finance regulatory reporting obligations, we have introduced an EU Taxonomy solution that delivers access to comprehensive data feeds underpinned by a powerful combination of LSEG ESG data.
OVERVIEW
Shaping tomorrow creates new sustainable finance opportunities to drive a greener economy and brings new regulations to allow market participants to navigate the investment landscape more safely. But more regulation means more compliance and reporting obligations, which can become challenging.
LSEG Post Trade can help simplify compliance with your sustainable regulatory reporting obligations.
The EU Taxonomy and your reporting obligations
The EU Taxonomy is a classification tool created to help investors, companies, issuers and project promoters navigate the transition to a low-carbon, resilient and resource-efficient economy.
The taxonomy helps investors and companies consistently determine whether an economic activity is environmentally sustainable or not, through a robust framework for identifying and classifying investment opportunities.
It provides specific, quantitative thresholds on environmental performance for economic activities to be compliant with what the EU considers environmentally sustainable. This ensures investors can reorient capital flows towards sustainable investment, to achieve sustainable and inclusive growth.
Learn more about the EU Taxonomy here
EU Taxonomy reporting requirements
Since the end of 2021, EU financial institutions have been required to report alignment of their portfolios with the EU Taxonomy. There is a need to report “as reported” data but because not all corporate firms are required to report this data, regulators allow the use of derived data.
Investors can use sound estimates that are based on equivalent metrics reported by the corporates. Financial institutions are also expected to actively engage with the companies in their portfolios, to obtain as much relevant and required information about their alignment with the EU Taxonomy as possible.
Companies in scope of the Non-Financial Reporting Directive are required to report on the activities (portion of revenues, capital expenditures and operational expenditures where relevant) that are aligned to the EU Taxonomy. The focus is on shifting financial flows towards a sustainable economy, which will have major implications for many sectors, not only the financial industry. The expectation is that this will greatly accelerate the transition to sustainable economic and social growth in the future.
SFDR
SFDR Reporting Obligations
The Sustainable Finance Disclosure Regulation (SFDR) introduced disclosure standards for financial market participants, advisors and products. Institutional investors and asset managers in the EU now have disclosure obligations around sustainability, including:
- Sustainability risk policies on investment strategies
- Adverse sustainability impacts
- Remuneration policies consistent with sustainability risk integration
Fulfilling these obligations requires an automated reporting solution that is as efficient and scalable as possible, with the highest level of data coverage.
Learn more about LSEG's sustainable finance regulation solution here
How we can help
Our Regulatory Reporting EU Taxonomy and SFDR solutions helps simplify your sustainable reporting compliance obligations through access to comprehensive data feeds underpinned by a powerful combination of LSEG ESG data.
Our solution allows :
Identify and report
on the percentage of their portfolios eligible for or aligned to the EU Taxonomy objectives
Identify exposure
to climate transition risks and opportunities for investment in companies undertaking green activities
Comply with your regulatory reporting obligations
more easily and with confidence.
