EU SFDR: ICE launches data solution for ESG regulation in Europe

Rick Steves

The ESG regime requires market participants and financial advisors to identify and disclose sustainable impacts and whether and how each financial product considers enumerated Principal Adverse Impacts (PAIs).

Intercontinental Exchange has launched a data solution for the European Union Sustainable Finance Disclosure Regulation (EU SFDR).

The EU SFDR requires more transparency and standardization in the products offered by asset managers in order to help investors compare among the growing number of investments with sustainable objectives.

ICE’s SFDR PAI Solution provides event-triggered updates for all of the mandatory adverse sustainability indicators applicable to investments in companies, sovereigns, and supranationals.

The regime requires specifically formatted disclosure on ESG-related indicators, including greenhouse gas emissions, board gender diversity, and energy consumption ratios.

These indicators are available in a formatted file or web viewing tool to clients as part of ICE’s SFDR PAI Solution, a service that links equity and fixed income securities to the closest disclosing corporate entity.

PAI disclosure to affect many market participants and advisors in the EU

Elizabeth King, President of ESG and Chief Regulatory Officer at ICE, said: “The transparency ambitions of the EU SFDR places new demands on asset managers and investment advisers. ICE’s SFDR PAI Solution offers updated, granular values for the SFDR’s adverse sustainability indicators needed by market participants to meet SFDR requirements.”

Principal Adverse Impacts (PAI) disclosure is expected to affect a meaningful portion of global asset managers, asset owners, portfolio managers and financial advisors with customers in the EU.

ICE’s solution collects, calculates and normalizes data into formats closely aligned with the regulatory technical standards for ease of use by clients.

More ESG solutions as industry moves toward net zero

As governments move to take action on sustainable finance, there is a growing number of fintech firms developing and bringing to market new solutions that address the new challenges for market participants.

This week, Xignite launched a new Environmental, Social and Governance (ESG) data API in partnership with ESG Book, a global leader in ESG data and technology. The market data API’s goal is to help brokerage, wealth, and media customers to increase user engagement and retention with sustainability trading products.

This is the time when brokers and wealth managers look to leverage ESG data to increase client engagement around their portfolios and differentiate their offerings in a very fragmented marketplace.

Xignite’s new ESG API serves this purpose. Designed to fast track the launch of ESG-powered products, the API offers access to transparent, well-structured and easy to understand ESG datasets that eliminate the need for in-house ESG expertise.

The solution includes advanced screener endpoints that further simplify development by eliminating the need to maintain a database.

XigniteGlobalESG API covers a comprehensive universe of public companies domiciled in North America, EMEA, APAC, and Latin America. In addition to ESG scores, this API provides Global Compact scores, involvement data, temperature scores, and raw emissions data.

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