How Data Science Can Enable SFDR Reporting

The European Union’s Sustainable Finance Disclosure Regulation (SFDR) could revolutionize sustainability reporting—and, in turn, rescope the data that companies track to measure their ESG performance. The purpose of SFDR is to improve the transparency of ESG disclosures by financial product and service providers. As not every piece of relevant data is available at scale yet, compliance with SFDR also requires financial market participants to somehow run before they walk. In the intermediary phase, when data providers are in the process of ramping up their offer, this could be counterproductive and result in poor or misreporting. Data science can help.