Clarity AI has brought its latest tool to market to help European fund managers, portfolio managers and ESG analysts navigate the growing complexity of regulatory and labelling requirements for sustainable investment funds.
With increasing regulatory demands and greenwashing scrutiny, new sustainability labels are emerging. Some of these requirements, such as the UK Financial Conduct Authority’s Sustainability Disclosure Requirements (SDR), are driven by regulators, while others, like France’s SRI label and Germany’s FNG, are government or industry-led.
Clarity AI’s solution is designed to address the challenges of monitoring funds across complex metrics and frameworks by providing a user-friendly platform that brings all the information onto one screen.
The tool supports fund managers with the German FNG, UK SDR Labels, with the French SRI label being added soon. It also helps screen for the Paris-Aligned Benchmark and Climate Transition Benchmark exclusions for the European Securities and Markets Authority’s (ESMA) Naming Rules.
Recent guidelines from ESMA underscore the importance of maintaining high standards for funds using ESG-related terms in their names, including an 80% minimum investment in sustainable assets.
“The goal is to reduce the amount of time fund managers spend on identifying potential investments that fall short of the standards, and understanding the cause for non-compliance, in order to decide on the best course of action,” said Henry Waind, product lead at Clarity AI.
“Sustainability regulations and labels are proliferating, making it increasingly challenging for fund managers to keep up”, added Tom Willman, regulatory lead at Clarity AI. “A significant amount of resources are tied up in regulatory obligations. These could be better used to develop sustainable solutions that support end-investors sustainability goals, and technology is key to making this process more efficient.”
