A Bloomberg Professional Services Offering

The PAI reporting challenge

Our comprehensive data solution

One of the key challenges posed by SFDR is the annual
disclosure of Principle Adverse Impact (PAI) indicators,of which 18 are mandatory (with four applying only toreal estate or sovereign investments). Firms are also
required to publish at least two more optional indicatorsfrom a list of 46. The indicators cover environmental,social and governance (ESG) issues, including asubstantial number of fields where many corporations
do not currently disclose meaningful data.

To meet their SFDR requirements, firms need data
they can trust from a provider that can clearly
demonstrate the measures taken to ensure data
quality and explain how the data is processed.
Bloomberg has mapped our available sustainability
data directly to SFDR’s PAI indicators to give firms
clarity and confidence in their SFDR reporting.

Calculation and reporting of the PAI indicators will
require vast amounts of new ESG-linked datasets.
With the first reporting of this dataset required fromJune 2023, for a reference period that begins inJanuary 2022, firms do not have much time to identify
their data gaps and source new datasets.

Sustainable Finance

Under the EU’s new Sustainable Finance Disclosure Regulation (SFDR), from 10 March
2021 financial market participants will need to consider whether adverse sustainability
indicators apply to their investment strategy. SFDR is part of a broader legislative
package under the European Commission’s Sustainable Finance Action Plan aimed atboosting sustainable investment and transitioning the EU to a low-carbon and moreresource-efficient economy. With the final report on the draft regulatory technicalstandards (RTS) on the content, methodologies and presentation of disclosures now
published, financial market participants must get ready to implement the new complex
requirements from 1 January 2022.

Bloomberg Terminal

Prepare your firm for
SFDR with market-leading
ESG datasets

ESG data

Carbon emission data

Bloomberg has been collecting and normalizing ESG
non-financial disclosure data since 2006, drawing from
corporate sustainability reports and public filings covering
more than 410,000 active securities across 102 countries.
Our ESG data now includes information on more than 11,700
public companies (representing 84% of global marketcapitalisation) organized into 1,300+ fields, and includes
as-reported data, derived ratios and sector- and countryspecific metrics. Our ESG Disclosure Scores rate companies
on their level of ESG disclosure and span key sustainability
topics, including:

A key part of compliance with the SFDR reporting
requirements is a comprehensive carbon footprint ofinvestments made during the reference period. Bloomberg’s
new carbon dataset estimates historic emissions for over
50,000 international companies and provides the option topull the estimates at the 99th percentile, should your firmwish to adopt the precautionary principle. Data is currently
available for scopes 1 and 2 carbon emissions, with scope 3
expected prior to the January 2023 phase-in requirement.

• Air quality• Climate change• Water & energy management• Materials & waste• Human capital• Audit risk & oversight• Compensation• Diversity• Board independence, structure & tenure• Shareholders’ rights

About Bloomberg Professional Services
To succeed today, financial institutions must respond to challenges that are not addressed by traditional approaches. They requireworld-class solutions that integrate people, processes, information and technology for the front office, middle office and operations.
Our full suite of sustainable finance solutions, available on the Bloomberg Terminal and through our Enterprise Data feed, empowers
asset owners, asset managers, issuers and regulators to identify, analyze and capitalize on material business risks such as climate
risk and emerging sustainability opportunities such as low-carbon energy transition.

Take the next step.

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The data included in these materials are for illustrative purposes only. ©2021 Bloomberg

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