The disclosure of ethical and sustainability criteria is becoming increasingly important, as one in three euros already goes into sustainability funds (Morningstar, 2020).
ESG stands for
Environmental: impact on the environment, e.g. through environmental management, resource consumption, emissions
Social: social aspects, e.g. working conditions, equal opportunities, social commitment
Governance: corporate management, e.g. in terms of leadership ethics, anti-corruption, tax transparency
As of December 2019, customers who expressly want ESG-friendly financial products have the right to only be offered those that meet the relevant criteria.
As of March 2021, providers must indicate whether or not sustainability has been a consideration in the development of their products. If not, they must explain why.
What this means for your reporting
Since many private and institutional investors require an ESG rating before they invest,an evaluation of funds and portfolios is necessary to gain full market access.
Financial and non-financial companies that are already obliged to make a non-financial declaration will have to disclose how and to what extent their activities and transition activities are conducive to the European ESG taxonomy.
The challenge is to aggregate ESG data from all assets in a fund or portfolio and to provide a meaningful overall rating.
Our solution: arep ESG
The arep platform and our managed services allow you to automatically generate ratings and overall ratings for all stocks, products, funds, portfolios and target investments, reducing your costs and effort on the basis of data you have already provided.
- Uniform ESG ratings determined for funds, portfolios, financial products and illiquid assets
- Rating determination based on inventory data for financial reports or, for insurance companies, based on Solvency II data
- Generation of uniform overall ESG ratings for all holdings, products, funds, portfolios and target investments
- Optional use of the scores of Refinitiv, Morningstar or MSCI as the basis for determining the overall ESG ratings
- Fully digitised and automated consolidation of data, minimising your workload
- Creation of own scoring models, based on European taxonomy, for illiquid products such as real estate, private equity, bonds or deptfunds
- All key figures required in the future will be reported in accordance with the ESG standard
- Standardisation of different providers’ ratings (if necessary, e.g. to provide look-through data)
The advantages of the arep solution
- Using a single integrated platform to collect all CSDR-related data, to calculate risks and costs and to create and distribute reports increases the efficiency of all processes
- The modular arep system can be used immediately. It is hosted in our certified Luxembourg datacentre and, thanks to its browser-based user interface and underlying Oracle database, no additional IT infrastructure is required.
- Rapid implementation and a comprehensive support service ensure all regulatory and client-specific requirements are metautomated data management and report creation reduce the time and money you have to invest
- web-based arep dashboard guarantees full transparency over the entire reporting process.
- reporting process you will have access to extensive support and consulting services.
- By choosing our optional Business Service you could outsource the entire process to acarda
- Service Level Agreement: how our Software as a Service works can be configured according to your needs. You pay only for the service you use and on the basis of a contractual agreement.