Background/Problems faced by clients: 

As the investment landscape continues to evolve, a prominent Investment Manager recognized the need to enhance its Environmental, Social, and Governance (ESG) integration capabilities to meet the growing demands of responsible investing. Specifically, the client sought to convert its existing fund from Article 6 to Article 8 under the European Union's Sustainable Finance Disclosure Regulation (SFDR), requiring a comprehensive sector-agnostic ESG framework to ensure compliance and responsible investing practices across its portfolio companies.

Solution provided:

To address the client's needs, CRISIL provided a comprehensive solution that included: 

• Responsible Investment (RI) Policy: We prepared a detailed RI Policy outlining the client's approach to ESG considerations and responsible investing practices.
• ESG Integration Framework: We helped the client establish a comprehensive sector-agnostic framework to integrate ESG criteria across the investment lifecycle, including pre-investment, stewardship, and exit.
• Sector-Specific ESG Assessment: We developed customized ESG assessment framework for six key sectors: Automobile, Cement, Financial Services, FMCG, Pharmaceuticals, and Steel. This enabled the client to collect data and rate its portfolio companies in each sector, providing a nuanced understanding of ESG risks and opportunities.
• ESG Implementation and Monitoring: We assisted the client in implementing the ESG framework, including monitoring and reporting aspects, to ensure effective tracking and evaluation of ESG performance.
• SFDR Compliance and Disclosure: We helped the client enhance the ESG disclosure of its fund, which was converted from an Article 6 to an Article 8 (light-green) fund under the SFDR, ensuring compliance with regulatory requirements and enhancing the fund's ESG transparency.
  

Impact  on Client: 

Our solution enabled the client to embed sustainable investing practices into its operations, comply with emerging regulations and standards related to ESG disclosure and transparency, and optimize its investment strategies to achieve long-term value creation and responsible investing.