Apex Group, a global financial services provider, has launched Invest Check, a tool to help financial market participants collect the necessary data to report on and comply with the upcoming EU Sustainable Finance Disclosure Regulation (EU SFDR).

As of March 2021, the EU SFDR will require asset managers to incorporate sustainability risks across their investment process, product governance and wider internal processes and systems.

Despite this imminent legislation, many managers lack an understanding of its implications for their business and require urgent support if they are to comply with the reporting demands.

Andy Pitts-Tucker, Managing Director of Apex ESG Ratings & Advisory, said: “The new EU regulation sets a new minimum bar for disclosure of ESG integration practices in investments. This raises the standard globally including in African markets.”

“As a region, Africa is particularly exposed to both the physical and transition risks related to climate change. There is clear demand from investors globally to allocate towards companies that are better managing ESG risks and scaling the technologies and services that will be needed in the low-carbon transition,” he told Africa Global Funds.

Pitts-Tucker said that from March 2021 the EU Sustainable Finance Disclosure Regulation will apply not just to all investors based in the EU, but also those based outside the EU and investing into the region and those with investors from the EU.

“In addition, regulations will require all asset managers, not just ESG-focused funds, to disclose how they manage sustainability risks. Impact investors as well as fund houses that claim to invest in accordance sustainability principles would need to provide evidence,” he stressed.

Invest Check is underpinned by Apex’s proprietary software and simplifies the process of regulatory alignment through robust data collection, benchmarked against best-in-class international regulations and standards defined by EU SFDR, TCFD, UNPRI and more.

Invest Check evaluates an asset manager’s sustainability strategy at both manager and product level, tracks performance and identifies key gaps against an ESG data set based on regulatory standards.

The ESG data is then presented in an easy to use format that mirrors the SFDR template, streamlining the submission process for managers. 

Beyond supporting regulatory ESG reporting requirements, Invest Check allows asset managers to identify, understand and act on key gaps to support a company’s journey towards ESG best practice and to stay ahead of upcoming regulatory or disclosure requirements.

“With the deadline looming, investors based in Africa but with operations, entities or holdings in Europe need to urgently assess whether they fall within scope of this regulation.To help navigate the new EU SFDR requirements, Apex ESG has created a tailored service to collect, evaluate and report ESG data,” Pitts-Tucker said.

“Invest Check gives investment managers the ability to assess their sustainability strategy at both manager and product level, tracking performance and identifying key gaps against a data set based on regulatory standards, ensuring alignment,” he added.