We are a few weeks away from the deadline for adjusting your European ESG Template files in accordance with its latest version, V 1.1.1.
In this article, we will explain what changes were made to the EET to help you get ready for meeting the deadline.
For starters, we are loosely using the word “deadline”. The EET is actually not a mandatory template and FinDatEx, the industry-led group responsible for creating the template, can not enforce deadlines. On its website, FinDatEx states that "following the end of the transition period on 30 April 2023, V1.1.1 will be the only version of the EET that should be used".
So April 30th is a recommendation. But why? Some of the recipients of the EET (for example, fund of funds) have their own SFDR deadline: they need to publish their entity-level Principal Adverse Impact (PAI) statement by June 30, 2023. Therefore, explains FinDatEx, distributing the EET V 1.1.1 no later than April 30 would give your stakeholders some time to work on aggregating the correct data of their portfolios in their PAI statements.
If your team has not yet shared a European ESG Template with stakeholders, remember that you should ignore the previous versions and work only using version 1.1.1.
What changes were made to version 1.1.1
The changes on the EET reflect the latest updates made to the SFDR templates of the pre-contractual disclosure and periodic report. The European Supervisory Authorities (ESA)'s new Regulatory Technical Standards established that from January 1, 2023 on financial market participants need to disclose if their financial products invest in fossil gas and/or nuclear energy. If the answer is "yes", they also have to disclose the EU Taxonomy alignment of these financial products.
These changes were, then, also made to the EET: 27 new fields were added to the previous version (V 1.1). V 1.1 itself also carried many other updates, including 8 new fields and adjustments to the mandatory/conditional/optional nature of fields. Read Datia's team article to understand the changes to V 1.1 in more detail.
In the table below, you can get an overview of how each version has been contributing to increasing the scope of what information is shared through the EET.
EET's two latest revisions (EET V 1.1 and V 1.1.1) were created in a very small window of time - only four months. In Q4 2022, the SFDR Level 2 RTS was not yet approved, but FinDatEx had already accumulated feedback from the financial industry participants who had adopted the very first version of the template (V 1). That is why EET V1.1 was created. Then, shortly after V 1.1 was published, the SFDR Level 2 RTS was approved. Hence, the need for yet another version.
FinDatEx is in the works for producing a 4th version of the EET before the end of 2023. But your work with the EET 1.1.1 will not be in vain. In all three versions, the template did not change dramatically. Instead, more fields were added or previous optional fields were made mandatory. Therefore, most of your work will be transferrable into the upcoming version.
How Datia can help
Datia offers a tool that takes care of the majority of the heavy lifting for our customers: we interpreted the EET data requirements and translated the questions to fit human reading as opposed to machines. In order words: we transformed the excel template into a questionnaire that is intuitive and easy to complete.
About half of the EET questions are automatically pre-filled, considering data already available about your fund in the platform. For example: all the mandatory PAI indicators, additional PAIs considered by the fund and their indicators, as well as the coverage for the calculations.
Thanks to this solution, Datia’s customers are able to create a full EET for Article 6 funds in a few minutes. The process takes no more than one hour for Article 8 and 9 funds - given that their pre-contractual and periodical reports were previously produced.
Reach out to our team of experts to understand how Datia can help you with creating EET files for your financial products.