Clarity AI Introduces its First SFDR-aligned Sustainable Investment Index Methodology
Clarity AI, the leading sustainability technology platform, has launched a groundbreaking Sustainable Investment index and ETF methodology, which aligns with the Sustainable Finance Disclosure Regulation (SFDR).
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The methodology marks a significant step forward for index and ETF providers to build, define and/or market products that fall within the European Union’s definition of Sustainable Investment, outlined in Article 2(17) of the SFDR.
Clarity AI’s methodology is being used in indices that target companies at the forefront of key innovative industries — such as electric vehicles and sustainable infrastructure — and ETFs based on those indices. It can also be applied to broader market indices and funds where investors want to integrate sustainable objectives. It provides a transparent, clear, comprehensive, and robust framework for classifying organizations, funds, and indices as sustainable investments, ensuring greater confidence for investors who seek to align their portfolios with sustainable principles.
Importantly, as the regulation requires financial market participants to determine what is considered a sustainable investment, Clarity AI’s methodology is customizable. Financial market participants can utilize this methodology to determine how companies pass the sustainable investment assessment, including setting thresholds on UN Sustainable Development Goals (SDGs) and EU Taxonomy contribution, and SFDR Principle Adverse Impact indicators (PAIs), among other criteria, all within the ranges of what is accepted by the regulation.
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Ani Widham, Senior Product Manager at Clarity AI commented, “The successful implementation of Clarity AI’s Sustainable Investment methodology into Indices and ETFs sets a precedent for sustainable investing that can shape the future of the financial markets. We know that investors seek clarity and transparency when evaluating their portfolios, so providing them with this efficient methodology, aligned with the SFDR regulation, will enable them to make better sustainable investment decisions to benefit their companies and the wider sustainable investment industry.”
Clarity AI is a sustainability technology platform that uses machine learning and big data to deliver environmental and social insights to investors, organizations, consumers, and governments. Clarity AI’s capabilities are an essential tool for end-to-end sustainability analysis related to investing, corporate research, benchmarking, consumer e-commerce, and regulatory reporting. As of September 2023, Clarity AI’s platform analyzes 70,000 companies, 430,000 funds, 201 countries, and 199 local governments, which represents more breadth than any other player in the market. One way Clarity AI delivers on its mission to bring societal impact to markets is by ensuring its capabilities are delivered directly into clients’ workflows through integrations with partners like BlackRock – Aladdin, Refinitiv an LSEG business, BNP Manaos, CACEIS, and SimCorp. Additionally, Clarity AI’s sustainability insights reach more than 150 million consumers across more than 400,000 merchants on the Klarna platform. Clarity AI has offices in North America, Europe, and the Middle East, and its client network manages tens of trillions in assets and includes companies like Invesco, Nordea, BlackRock, Santander, Wellington, and BNP Paribas
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