On October 24th, 2022, FinDatEx published the latest version of the European ESG Template (EET) - called simply “Version 1.1”. We will summarize this latest update for you: in simple terms, this is not a major change in the way your Fund will report its ESG metrics. Instead, a couple of improvements were made to the previous version:
- New version makes adjustments to the mandatory/conditional/optional nature of fields following the SFDR/Taxonomy RTS as from 1 January 2023
- The wording of data fields has been reviewed and typos and other mistakes have been corrected
- 8 new fields were added: Are sustainability risks relevant for the financial product (SFDR art.6.1)?; Total AUM /Notional; Plus 6 fields in relation with structured products (Use of proceeds, derivative, SI, Taxonomy)
- Recently published amending regulation, such as on the inclusion of nuclear and gas into the SFDR will be subject to the next update cycle of the EET taking place in H1 2023.
Most importantly, if you are already working on your fund’s EET, we recommend that you already adopt the “Version 1.1”, because the first version (“Version 1.0”) should not be used after 30 April 2023.
But what is The European ESG Template (EET)?
The EET is a template introduced by FinDatEx to standardize the reporting of Environmental Social and Governance (ESG) metrics across Financial Institutions in Europe. Simply put: it’s a spreadsheet that you can download from FinDatEx’s website.
But it is more than a spreadsheet. It’s an attempt to walk you, sustainable investor, through an extensive list of metrics from hard data about ESG topics to more subjective analysis of your investment processes and policies. And after “filling in” the data requirements, your Fund will be able to more transparently communicate its sustainability profile to potential partners in the Financial Industry.
Thanks to this template, Financial Institutions have, for the first time, a tool to facilitate their communication about ESG risks in their portfolios. The expectation is that, starting from January 1, 2023, all Funds in Europe will solely use this template to report about ESG.
How Datia can help
In order to create a report with the EET, asset managers need to collect all necessary data, explain their investment policies and processes and, of course, make sure to report following the latest template available. This is an extraneous and time-consuming task to be completed before the expected date (January 1st, 2023).
In Datia’s platform, though, this process takes only about one hour. Here’s what generating an EET looks like for asset managers using Datia:
- Our team uploads the Fund’s portfolio as part of the onboarding process
- Datia makes sure all the hard sustainability data is collected across multiple asset classes, including stocks, bonds, mutual funds and more
- When it’s time for the Fund to generate the EET report, there is no need to be familiar with the template. Instead, Datia’s team created a smooth questionnaire. The answers, together with the hard data already collected by Datia, are automatically combined to generate the updated EET which can be exported and sent straight to the fund selectors and distributors