SFDR Principal Adverse Impacts

This page describes Upright's SFDR Principal Adverse Impact (PAI) indicator metrics.

This document describes what SFDR PAI metrics Upright provides. Upright's methodology on producing PAI metrics is detailed here.

The SFDR Principal Adverse Impacts indicators

Principal Adverse Impact indicators (PAI indicators) are metrics introduced in the EU Sustainable Finance Disclosure Regulation (SFDR, formally EU regulation 2019/2088). Investors need to periodically assess and disclose information about the investee companies' principal adverse impacts, as defined by the indicators.

The objective of the disclosure requirement is to combat greenwashing by establishing set metrics along which investors need to disclose information. This reduces the potential to cherrypick convenient metrics and improves comparability between market participants.

PAI indicators are defined in the Level 2 Regulatory Technical Standards of the SFDR. They are split into 18 mandatory and 46 optional indicators, where investors are required to report on all mandatory and some optional indicators. Most indicators are related to investee companies, but both mandatory and optional indicators also include indicators relevant to investments in sovereigns, supranationals and real estate assets.

Upright's PAI indicator data

Upright provides data for all mandatory Principal Adverse Impact indicators defined for companies in the SFDR Technical Standards, for all companies within its coverage.

The provided indicators are based on direct company disclosures when they are available. When direct disclosures are not available, Upright provides estimated figures, except for the three optional PAI indicators marked with an asterisk (*) in the list below. Estimated figures are indicated in both the Upright Platform UI and API.

Supported indicators include:

  • Scope 1, 2 and 3 GHG emissions

  • Carbon footprint (separately for only Scope 1 and 2, as well as including scope 3)

  • GHG intensity (separately for only Scope 1 and 2, as well as including scope 3)

  • Fossil fuel sector activity

  • Non-renewable energy share (excluding production of energy)

  • Energy consumption by high impact climate sector (separately as High impact climate sector, Total energy consumption and Energy consumption intensity)

  • Activities negatively affecting biodiversity-sensitive areas

  • Emissions to water

  • Hazardous waste

  • UNGC/OECD norm violations

  • UNGC/OECD compliance mechanisms

  • Unadjusted gender pay gap

  • Board gender diversity

  • Involvement in controversial weapons

  • Production of chemicals (optional indicator)

  • Lack of human rights policy (optional indicator)*

  • Lack of anti-bribery/anti-corruption policy (optional indicator)*

  • Water usage (optional indicator)*

Is the lack of a policy a reported value?

Companies never directly report a lack of a human rights or anti-bribery/anti-corruption policy. Upright infers the lack of such a policy when a company's recent annual and/or sustainability reports do not state the existence of such policies.

As they are not directly reported, they are marked in the Upright API and the Upright Platform as "Upright modelled estimates", despite them being based on company reporting.

If not enough sufficiently recent reporting for making such is available, Upright does not provide any value for these indicators.

Indicators for sovereigns, supranationals or real estate assets, or portfolio-level aggregation of indicators are not currently supported.

PAI indicator data in the Upright API

In addition to the Upright Platform UI, all metrics listed above are available from the regulatory metrics endpoint in the Upright API.

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