ESG Viewpoint:
ICE
# RepRisk interviews Becky Palmer, Director of Sustainable Finance at ICE
# March 2023
1. RepRisk: ICE and RepRisk teamed up in 2020 as part of ICE’s launch of an innovative ESG data service, and have most recently enhanced this collaboration to develop a solution to address certain requirements of the Sustainable Finance Disclosure Regulation (SFDR) Principle Adverse Impacts (PAI). Can you explain what the SFDR PAIs are, why market participants need them, and your motivation for developing a solution?
Becky Palmer: I’m a senior member of the ICE Sustainable Finance Team, which offers a range of cross asset sustainable finance data and tools. We provide a comprehensive view of ESG issues across the market to help clients uncover opportunities, manage risk, and provide transparency to their clients and regulators. My main focus is regulations which are emerging in the EU and UK, and how they interoperate (or not!) with requirements in other regions. I’ve been working with RepRisk on our SFDR PAI solution since its inception and feel confident we have a service that can help clients meet their reporting obligations.
The PAI Indicators are a set of metrics defined in the SFDR, which larger financial market participants must use to measure their adverse impacts on sustainability matters through their investments. However, the PAI Indicators have been woven into other aspects of the regulation, forming the means by which issuers of funds subject to Article 8 or Article 91 describe how they have considered principal adverse impacts, ensuring these are embedded into their investment decision making. With this information becoming a key component of the investment process, there’s a clear need for robust quality data to support the requirement.
To ensure quality in our SFDR ESG data, our research process is subject to quality controls. These include an open and transparent challenge process for issuers and clients to submit inquiries for continuous validation of the data.
Our dataset includes over 550 company-reported data points from publicly-available sources and reports, and combines this with RepRisk’s outside-in ESG risk data to provide clients a comprehensive SFDR solution.
2. RR: Why is comprehensive ESG risk data an important building block for this solution and how does the RepRisk data fit in?