Sustainability Frameworks for Asset Managers

Sustainability frameworks are no longer an optional consideration. They’re essential for asset managers, allowing them to better navigate the ever-changing landscape of responsible investment.

Global demand for transparency is growing, and investors expect funds to show not just strong financial performance and returns, but also follow ESG principles.

This means that sustainability and reporting frameworks should be at the heart of asset manager decisions. In this blog post, we’ll go through exactly what this means, and how they can streamline ESG efforts.

What Is A Sustainability Framework?

Sustainability frameworks are a structured approach to reporting. They guide the measuring, managing, and reporting of ESG impacts. For asset managers, the frameworks are in place as a roadmap to portfolio alignment, ensuring that the investment is sticking to the sustainability goals and regulatory requirements.

Why are they important for asset managers?

Sustainability frameworks are put in place to:

• Enhance transparency: This shows accountability to investors and stakeholders.

• Risk mitigation: By identifying potential ESG risks, asset managers are able to make informed decisions to keep the portfolio performing well.

• Regulatory performance: This improves compliance with legal requirements, such as the EU Sustainable Finance Disclosure Regulation (SFDR).

• Boost credibility: This positions your fund as a leader in responsible investment.

Asset managers can choose which framework to follow, depending on the goals of the fund and stakeholders. Choosing the right sustainability framework is important for effective reporting and ensuring that investments align with sustainability trends.

Examples of sustainability frameworks

There are a few sustainability frameworks for asset managers to choose from, which are available in GaiaLens’ on-demand solution. These include:

• Sustainable Finance Disclosure Regulation (SFDR)

• Task Force on Climate-related Financial Disclosures (TCFD)

• EU Taxonomy

• ESG Data Convergence Initiative (EDCI)

• Science Based Targets initiative (SBTi)

• Net Zero Tracker

• Sustainable Investments

• Impact Screen

Your specific needs, portfolio, and stakeholder priorities will determine which framework is best suited for you. Get started with our free on-demand software, giving you access to two portfolio uploads and two controversy alerts on us.

Why Is Sustainability Reporting So Important?

Sustainability reporting is the bridge between responsible investment strategies and investor trust. Asset managers must prepare these reports to provide quantitative evidence of how well a fund is committed to ESG values. This level of clarity can then instil a level of confidence to stakeholders, allowing them to make informed investment decisions.

This is especially important when societal and political changes affect investment opportunities. The results of the US elections, for example, could bring change in reporting and investment regulations that asset managers must take into consideration. Trump’s inauguration into the White House has sparked conversation about the climate policies and ESG commitments required by organisations.

For asset managers, having a clear and robust sustainability framework allows them to better navigate any potential roadblocks or scrutiny from investors.

Speed Up Sustainability Reporting With Gaialens

Navigating ESG reporting doesn’t need to be complex, or even take hours. GaiaLens allows you to speed up reporting through our AI-powered software, giving you the power to analyse ESG reports at the click of a button.

Sign up for our free version to enjoy two portfolio uploads ready for analysis, as well as two free controversy alerts, so you’re always ahead of the curve.

Our sustainability frameworks offering removes any guesswork, allowing you to easily spot your ESG performance depending on your chosen framework.

Get in touch with our team to find out more.