As part of the European Union (EU) Action Plan on Sustainable Finance, the Sustainability Financial Disclosure Regulations (SFDR) provide standards to help asset managers and financial market participants (FMPs) publicly disclose the impact of Environmental, Social, and Governance (ESG) factors on their investments and financial products.
To help increase the transparency of the sustainability-related risk and impact of your financial portfolio, you can supplement your Workiva ESG solution with additional templates to prepare SFDR-ready ESG reporting. These templates include:
- A pre-built ESG Program, with metrics based on all SFDR annex indicators that apply to your portfolio and a custom dimension to enable data collection based on assets or Article 8 or 9 financial products
- A Data Collection spreadsheet for Annex 1 indicators, with a separate sheet for each financial product
Tip: For Article 8 and 9 financial products, collect responses through Workiva Tasks. Workspace members can also collect values for Annex 1 indicators through the streamlined Workiva Tasks instead the spreadsheet.
- A Factbook spreadsheet and sample report document based on SFDR Annex 1 indicators
- Additional Factbook spreadsheets for Article 8 and Article 9 financial products, as applicable
- A sample report for each product, based on its applicable annex
SFDR annexes
The SFDR include annexes with indicators for:
-
Principle Adverse Impacts (PAI), or the negative effects of investments on ESG factors, including human rights and anti-corruption factors
Note: Article 4 of the SFDR requires FMPs with at least 500 employees to publish a PAI statement for the financial year on their website.
- Financial products referred to in Article 8 of the SFDR, which promote investments with positive ESG impacts — such as those that consider ESG ratings and foster ESG factors
- Financial products referred to in Article 9 of the SFDR, which target sustainable investments and economic activities that contribute to ESG objectives, with benchmarks to measure each fund's achievement
Your supplemental SFDR templates support indicators from Annex 1 and additional annexes applicable to your portfolio's financial products:
Annex | Includes indicators for |
---|---|
1 | PAI statement, including the mandatory disclosure of ESG impacts |
2 | The pre-contractual disclosure for Article 8 financial products |
3 | The pre-contractual disclosure for Article 9 financial products |
4 | The periodic disclosure for Article 8 financial products |
5 | The periodic disclosure for Article 9 financial products |
Tip: For Article 8 products, the Factbook includes Annexes 2 and 4; for Article 9, Annexes 3 and 5.
Step 1. Customize the Asset Listing dimension
Your ESG Program for SFDR includes a custom Asset Listing dimension to help enable the collection of multiple values for the same metric, based on your portfolio of financial products. From ESG Program , a Workspace Owner can click Dimensions to update this dimension to better represent your portfolio.
For example, when you update the dimension, you can:
- Rename default values to reflect your financial products.
- Add new values for additional products in your portfolio.
Tip: Workspace Owners should periodically update the Asset Listing dimension to reflect changes to your portfolio, such as to add values for new products or archive values based on divestments. For more information, refer to Manage dimensions for ESG Program metric values.
Step 2. Collect ESG Program metric values
By default, your ESG Program for SFDR also includes metrics based on all of your applicable annexes' indicators. From these metrics, you can collect the values to disclose for your portfolio's impacts and products.
To collect a metric's values from ESG Program :
- From the Configure metric panel, set up the metric's data collection, such as the type of values to collect, and how often. To collect multiple values for a metric, such as based on your financial products or the SFDR annexes, select the dimension in Row.
- In Metric details, add context around the metric and its values:
- In Related ESG content, add references to ESG Explorer content that the metric aligns with, such as guidance from Task Force on Climate-related Financial Disclosures (TCFD).
- In Reference attachments, upload files with additional context, such as a PDF of the SFDR annex as downloaded from the EU.
- Assign workspace members to prepare and approve the metric's value or — if the Product dimension is applied — each product's value.
- In Metric value, enter the value to disclose, or set up its collection through Workiva Tasks or a connected source, such as the Data collection spreadsheet for Annex 1 indicators.
- To notify assigned workspace members to begin data collection, click Send tasks.
For more information, refer to Collect values for ESG Program metrics.
Step 3. Disclose values in ESG reports
The SFDR templates include multiple Factbook spreadsheets, based on:
- Annex 1 indicators
- Article 8 annexes, if applicable
- Article 9 annexes, if applicable
Each product also has a corresponding sample report template, with examples of how to disclose its values for the SFDR. With these files, you can curate values from ESG Program and include them in your reporting outputs.
Note: The sample SFDR reports are only examples, which you can customize or refer to as you create reporting outputs. For example, in Documents or Presentations, you can create highly-designed ESG reports that include your corporate branding and style in addition to the disclosures required for the SFDR.
To use a Factbook spreadsheet as a source for a reporting output:
- From the spreadsheet's Connections panel, click Refresh to get the latest values from ESG Program.
- To disclose a value, create a source link from the spreadsheet to the destination reporting output.
- To update reporting outputs with their linked values, click Publish.