The purpose of FinDatEx is to streamline the exchange of data between stakeholders in the European Financial Market, through the use of standardized technical templates. To this end, they recently introduced the European ESG Template (EET), which provides a comprehensive overview of the regulatory requirements set by the Sustainable Finance Disclosure Regulation (SFDR) level 1 and related delegated acts.

The EET focuses on the exchange of ESG data between the manufacturer and distributor of financial products and the establishment of clients' sustainability preferences during advice processes. The template covers various aspects of SFDR, including disclosure and sustainability preferences, EU Taxonomy related information, and information on Principal Adverse Impact (PAI) indicators.

While the EET is not a mandatory reporting tool, it is a standardized template for the banking, fund, and insurance sectors that was developed by the industry (FinDatEx). It contains data fields related to SFDR level 1, MiFID II and IDD. The content of the EET is determined by the regulations that apply to the specific financial product in question.

There are two key regulatory deadlines for the submission of the EET: the MiFID II & IDD sustainable preferences deadline is August 2, 2022, while the SFDR & EU Taxonomy Level 2 deadline is January 1, 2023. FinDatEx recommends that financial participants adhere to intermediary deadlines to collect, compute, and produce the necessary data. The data in the EET should reflect the latest information disclosed in the pre-contractual and periodic impact statements, as well as any changes made to the product's characteristics.

The EET will simplify the ESG data exchange process by enabling the exchange of machine-readable ESG data for financial products. It will allow manufacturers and distributors to fulfill their own SFDR reporting requirements and PAI statement at both the product and company level. The EET also includes a wide range of ESG indicators, including those related to environmental, social, and governance aspects, which will empower financial market participants to accurately explain a fund's ESG characteristics.

At Wequity, we are closely monitoring the development of the EET to ensure its seamless integration into our solution, allowing our clients to access a full range of services for the successful implementation of their SFDR and EU Taxonomy requirements.

Click here to try Wequity for free for 30 days. We'll provide you with a free, personalized 45-minute onboarding call with one of our ESG experts.

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