The EU Sustainable
Finance Action Plan
Explore resources and solutions to make compliance your competitive advantage
The EU Action plan is a major policy objective that aims to leverage financial markets to support sustainable economic growth in Europe, while managing risks stemming from environmental, social and governance (ESG) issues. It has three core objectives:
1. Reorient capital flows towards a more sustainable economy
2. Mainstream sustainability into risk management
3. Foster transparency and long-termism
To meet its goals, the 10-point plan is centred on several key pieces of legislation:
EU Taxonomy Regulation: a classification framework to determine whether an economic activity is environmentally sustainable that requires the reporting on eligibility and alignment against six environmental objectives.
Sustainable Finance Disclosures Regulation (SFDR): requires managers to assess and disclose how sustainability risks are considered in their investment processes, and how they consider investment decisions that might result in negative effects on sustainability factors, known as Principal Adverse Impacts (PAIs).
EU Benchmark Regulation: requires investment benchmarks to disclose if—and how—they incorporate ESG criteria into their processes, as well as introducing two types of climate benchmarks.
Sustainability Preferences: amendments to the Markets in Financial Instruments Directive (MiFID II) and the Insurance Distribution Directive (IDD) mean ESG considerations must now be included in the advice process.
The EU Action Plan transforms the way that investment firms, wealth and asset managers, banks, insurers, pension funds, and investors consider ESG issues.
With three decades of ESG expertise, Morningstar Sustainalytics supports firms with compliance challenges and offers solutions at the company, fund, and portfolio level well ahead of regulatory deadlines.
The EU Action Plan: Q4 Update
The EU Action Plan and its components continue to influence the European sustainable investing landscape as more regulations and disclosures take effect this year. To help you navigate the latest regulatory developments, watch our Q4 update webinar.
Pension Providers and Insurers
- Stay on top of SFDR disclosures with comprehensive ESG data, including Principal Adverse Impact Indicators on over 13,000 companies and 172 companies.
- Go beyond traditional ESG data with a detailed breakdown of all three indicators for the EU Taxonomy: revenue, capital expenditures, and operating expenses. Comprehensive assessments of Do No Significant Harm and Minimum Safeguards also available.
- Delve into user-friendly company profiles and company data on EU Taxonomy eligibility and alignment.
- Evaluate portfolio eligibility and alignment in a convenient self-service platform or with full-service support.
Drive Transparency and Compliance With ESG Data
- Assess and report on how securities, funds, and portfolios align with EU Taxonomy, leveraging unmatched data on over 10,500 companies and full coverage for funds
- Stay on top of SFDR disclosures and reporting with extensive PAI data on 100% of mandatory corporate and sovereign indicators and 95% of voluntary indicators.
- Produce both the product and entity disclosures under SFDR, calculating and reporting on Principal Adverse Impact, EU Taxonomy and other ESG Analytics on any set of portfolios.
- Integrate sustainability risks and Principal Adverse Impacts into your investment decisions and due diligence.
- Create regulatory documents, European ESG Template (EET) and ESG factsheets using our range of portfolio reporting solutions to match your needs.
- Drive transparency using Morningstar Sustainability Benchmarks, including Climate transition and Paris-Aligned Benchmark
Wealth Managers & Advisers
Power Personalised Advice With ESG Data
- Discover client sustainability preferences and priorities with the ESG questionnaire.
- Screen and assess ESG funds to support selection and reporting using the European ESG Template (EET) data
- Calculate disclosures and analyse portfolio holdings for risk exposure.
- Report on Article 8 and 9 funds and product involvement at scale with full-service support
- Calculate PAI and Taxonomy alignment, in addition to other ESG metrics, at the client portfolio and entity levels with the support of our comprehensive holdings database.
- Create client factsheets using our range of reporting solutions for marketing and compliance needs.