Sustainable Finance Solutions

Regulators in the European Union are taking some of the most ambitious steps globally to integrate sustainability into investment processes.

Our EU Sustainable Finance Module forms a comprehensive toolkit designed to help clients align with EU regulatory requirements, including the Sustainable Finance Disclosure Regulation (SFDR), the EU Taxonomy for Sustainable Activities (EU Taxonomy), the revised Market in Financial Instruments Directive (MiFID II), the Insurance Distribution Directive (IDD), and the European Banking Authority’s (EBA) ESG Pillar 3 disclosures.

Clients use our solutions to report on SFDR principle adverse impacts (PAIs), sustainable investment (as defined by Article 2(17) of the SFDR), and taxonomy alignment for issuers, funds and indexes. They also leverage our toolkit to further integrate sustainability into their investment processes and report on progress.

Data and reporting for SFDR, Taxonomy, CSRD, MiFID II and EBA Pillar 3 requirements

Get Ready for CSRD Reporting

The European Union (EU) is raising standards for mandatory ESG and climate reporting by corporates, including large companies, banks, and insurers.

The Corporate Sustainability Reporting Directive (CSRD), which replaces and extends the scope of reporting requirements set by the EU’s Non-Financial Reporting Directive (NFRD), is expected to require approximately 50,000 companies to report on sustainability issues annually.¹

MSCI’s off-the shelf CSRD-aligned solution cuts through the complexities of CSRD reporting for CSO offices at financial institutions, advisors, and corporates to help you facilitate CSRD alignment:

• Conduct a double materiality assessment to determine the sustainability factors that are material and reportable for your company.
• Report alongside the European Sustainability Reporting Standards (ESRS), which include cross-cutting, sector-agnostic, and sector-specific guidelines.
• Benchmark your performance and practices against your peers.
• Leverage ESRS aligned metrics in your investment process including engagement, research and portfolio construction.

• CSRD Aligned Dataset:

  ESRS-aligned metrics: initial set of 350+ metrics³ designed to align with the ESRS that will be complemented over time. Full Ttransparency provided on the nature of the datapoints and how closely it matches to the ESRS.

• MSCI Double Materiality Assessment:

  • Financial materiality: MSCI ESG Industry Materiality map provides an assessment of the long-term resilience of companies to ESG issues and is publicly available.
  • Impact materiality: MSCI ESG Industry Impact Materiality map provides an assessment of the positive and negative impact of companies.

• MSCI Reporting Solution

  • Generate reports using a streamlined and intuitive workflow that includes advanced reporting capabilities such as batch portfolio loading.
  • Climate Risk Report and Total Portfolio Footprinting solutions available now to calculate GHG Scope 3 emissions (Category 15).

• Private Company Data Connect on CSRD

  • Platform allowing collection of data for private companies, including suppliers and counterparties.
  • Based on the ESG Integrated Disclosure Project (IDP) questionnaire: around 80% of the IDP questions can be matched to at least one ESRS datapoint.

• GeoSpatial

  A global dataset containing information on physical assets (e.g. offices, production facilities) owned or operated by public and private companies

  It includes 1 million asset locations linked to 70,000 public and private companies²

Double Materiality Assessment

A cornerstone of CSRD compliance is the double materiality assessment, which evaluates the significance of sustainability factors. MSCI's framework is designed to assist companies in identifying what is material for reporting purposes. To gain insight into our impact materiality assessment framework please download the sample below and get in touch with our team to explore how we can assist you in your CSRD reporting journey.

SFDR-ready

The SFDR requires large asset owners and managers, investment advisers, banks, insurance companies and other financial market participants in the EU to assess and disclose sustainability risks and impacts annually. Disclosures cover how market participants consider sustainability as part of financial decision-making and the principal adverse impacts of their investments.

Our SFDR dataset is designed to help clients prepare and file disclosures for SFDR reporting requirements at both the entity and product level, including the SFDR’s PAIs as well as pre-contractual and periodic disclosures. For more details, please refer to the MSCI SFDR Adverse Impact Metrics methodology (PDF, 369 KB).

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  Issuer-level
  data
  (144 KB) (opens in a new tab)

  See mandatory and optional PAIs for more than 11,000 companies. The dataset equips investors and managers of ESG- and sustainability-focused funds (so-called Article 8 and 9 funds) to manage and report on sustainability adverse impacts of portfolio companies.

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  Fund-level metrics
  data

  Classify approximately 53,000 equity and fixed income equity and fixed income mutual and exchange-traded funds according to the SFDR’s product-level disclosures and detail their adverse impacts.

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  Index-level metrics
  data
  (155 KB) (opens in a new tab)

  Report on adverse impacts for more than 6,000 indexes and show how ESG factors are reflected in investment benchmarks.

• Sustainability Reporting Services

  Our ESG and Climate reports are designed to manage evolving regulatory requirements and address your growing reporting needs through a scalable reporting framework, giving you a clear vision of the risks and opportunities ahead.

• Real estate climate solutions

  Data and metrics to help real estate investors detail exposure to PAIs, including fossil fuels and energy-efficient assets, together with greenhouse gas emissions and other key impacts for property and building portfolios.

Get taxonomy aligned

The EU Taxonomy, a companion to the SFDR, requires financial institutions subject to the Non-Financial Reporting Directive (NFRD), including banks, insurance companies, asset managers and investment managers, to publish their exposure to taxonomy-aligned economic activities. This disclosure includes a green asset ratio that shows a financial institution’s “green assets” as a proportion of total assets. To be taxonomy-aligned, an activity must contribute substantially to at least one of six environmental objectives, must do no significant harm to any of the other objectives, and must meet minimum social safeguards.

To be taxonomy-aligned, an activity must contribute substantially to at least one of six environmental objectives, must do no significant harm to any of the other objectives, and must meet minimum social safeguards. MSCI's EU Taxonomy User Guide (PDF, 979 KB) aims to help users navigate the reporting requirements outlined in Commission Delegated Regulation (EU) 2021/2178, which supplements Article 8 of the EU Taxonomy Regulation.

Identify and measure companies’ involvement in taxonomy-aligned activities

Our taxonomy dataset includes both reported and estimated metrics to measure taxonomy eligibility and alignment for more than 11,000 companies, 53,000 funds and 6,000 indexes.

For more details, please refer to the MSCI EU Taxonomy Methodology

Regulatory reporting and risk analytics

Data management and reporting of metrics required by the EU taxonomy for multiple asset classes, customized for clients’ needs and reporting framework, managed by MSCI. Learn more.

Stay ahead of the EU Green Bond Standard

The EU Green Bond Standard aims to help investors know they are funding projects aligned with the EU Taxonomy. The standard obligates issuers to show how activities to be financed are green.

Investors can use MSCI’s data to classify the environmental impact of bonds labeled as green based on seven categories of economic activity, comprising:

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  Alternative energy

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  Energy efficiency

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  Pollution prevention

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  Sustainable water

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  Green building

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  Climate adaption

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  Other activities, sustainable forestry, agriculture and biodiversity conservation

All-in-one tools for MiFID II and IDD reporting

MiFID II integrates sustainability into investment advice by requiring investments firms to:

• Ask clients for their sustainability preferences
• Provide them with solutions that meet their sustainability needs if any
• Report on how the product meets their needs

We deliver all-in-one data, metrics and tools for navigating sustainability preferences under the new MiFID II and IDD requirements. That includes a reporting-ready definition of “sustainable investment” (SI) as described in Article 2(17) of the SFDR together with a large set of data covered by the EU ESG template (EET).

• Wealth managers, banks and other distributors of financial products can use our solutions to address clients’ sustainability preferences conduct due diligence, and assess and convey the relevant characteristics of investment products.
• Manufacturers of investment products can use our SI definition, build their own, report on the sustainability characteristics of their products and target distribution accordingly.

Navigate EBA ESG Pillar 3 requirements

The European Banking Authority’s (EBA) ESG Pillar 3 disclosure standards require banks with securities traded on a regulated market of any EU member state to report information about climate risks in four main categories starting in 2023:

• Exposure to carbon-related assets or assets subject to climate-change related risks
• Support for counterparties through the low-carbon transition
• Key performance indicators on sustainable finance activity based on the EU Taxonomy
• How the bank integrates ESG considerations into its business and risk management

Disclosure solutions for banks

• Measure and report on climate-related risks in line with the EBA’s ESG Pillar 3 framework. Our data and solutions support granular reporting required by the EBA disclosure mandates.

Built for investors

• Holistic solutions

  Our data, indexes and analytical tools span asset classes to help clients achieve their sustainability targets and fulfill their regulatory requirements.

• Matched with the latest requirements

  Our participation in working groups in the EU and APAC allows us to stay ahead of the latest regulatory requirements and technical standards.

• Depth of data and insights

  Our sustainable finance solutions draw on MSCI ESG Research’s decades of experience in extracting value from ESG and climate data.

• Institutional-strength reporting

  The world’s largest investors leverage our next-generation technology for reporting to regulators and other stakeholders across thousands of portfolios enterprise-wide.

• Defined by our mission

  Every analytical tool and reporting solution we build reflects our fundamental mission to power better investment decisions.

• ¹ Corporate sustainability reporting - European Commission (europa.eu)
• ² As of April, 2024.