GRESB has conducted a market analysis of publicly available level 1 disclosures from GRESB Fund Managers with activities in Europe to determine whether these business practices mention product classifications.
SFDR from afar
Sustainable Finance Disclosure Regulation (SFDR), sets standards for classifying funds or products as “grey” Article 6, “light green” Article 8 or “dark green” Article 9, with each level of classification having different product documentation and marketing materials, with strict reporting requirements for “green” funds. You can find out more about SFDR developments here.
GRESB’s analysis explores both the Real Estate and Infrastructure domain.
Real Estate
Real Estate Findings
Based on our analysis of 100 Real Estate Fund Managers with activities in Europe, 11% mentioned having products falling under Article 8, with 4% under article 9, and 7% specifically mentioning being Article 6. This suggests a rather conservative and cautious approach into disclosing product categorization information most probably due to remaining unclarities over specific requirements for Article 8 and 9.
Product level disclosures are expected to come into force as of January 2022 with pre-contractual and periodic reporting and disclosure requirements. Findings also showed that no information relating to SFDR could be found for 71% of the 100 Real Estate Fund managers, and in addition to that, 17% of the Fund Managers researched have some level 1 disclosures in place but no product categorization at this stage.
Interestingly enough, 31% of the FMP’s with SFDR disclosures (29) , mention GRESB with some saying that GRESB is the data source they use to measure and/or monitor the characteristics promoted by their products.
Infrastructure
Infrastructure Findings
Based on our analysis of 33 Infrastructure fund managers with activities in Europe, 21% mentioned having products falling under Article 8, with 12% under article 9, only 3% specifically mentioning being Article 6. Note that 33% have some level 1 disclosures in place but no product categorization at this stage.
Findings also showed that no information relating to SFDR could be found for 30% of the 33 Infrastructure Fund managers. This suggests a rather conservative and cautious approach into disclosing product categorization information most probably due to remaining unclarities over specific requirements for Article 8 and 9.
Product level disclosures are expected to come into force as of January 2022 with pre-contractual and periodic reporting and disclosure requirements. Interestingly enough, 30% of the 20 FMP’s that have SFDR related disclosures, mention GRESB as being the data source they use to measure and/or monitor the characteristics promoted by their products.
GRESB is introducing an SFDR reporting solution to help GRESB participants to meet their regulatory disclosure obligations. At the forefront of ESG reporting, GRESB is well placed to bridge the identified gaps and provide a simple way for the industry to meet their regulatory obligations with minimum reporting burden. Discover more here