Clarity AI has announced the launch of a solution designed for fund managers, portfolio managers, and ESG analysts to easily navigate the growing complexity of regulatory and labelling requirements for sustainable investment funds.
The firm writes that, with increasing regulatory demands and greenwashing scrutiny, new sustainability labels are emerging. Some of these requirements, like the UK FCA’s Sustainability Disclosure Requirements (SDR), are driven by regulators, while others, such as France’s SRI label and Germany’s FNG, are government or industry-led, the firm says.
Clarity AI’s solution addresses the challenges of monitoring funds across complex metrics and frameworks by providing a user-friendly platform that brings all the information into one single screen.
“The goal is to reduce the amount of time fund managers spend on identifying potential investments that fall short of the standards, and understanding the cause for non-compliance, in order to decide on the best course of action,” says Henry Waind, Product Lead at Clarity AI.
Recent guidelines from the European Securities and Markets Authority (ESMA) underscores the importance of maintaining high standards for funds using ESG-related terms in their names, including an 80 per cent minimum investment in sustainable assets, the firm says. These developments highlight the critical need for tools that can quickly adapt to regulatory changes.
“Sustainability regulations and labels are proliferating, making it increasingly challenging for fund managers to keep up”, says Tom Willman, Regulatory Lead at Clarity AI. “A significant amount of resources is tied up in regulatory obligations. These could be better used to develop sustainable solutions that support end-investors’ sustainability goals, and technology is key to making this process more efficient.”
