Clarity AI releases sustainability tools for fund managers, portfolio managers, and ESG analysts

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With increasing regulatory demands and greenwashing scrutiny, new sustainability labels are emerging. Some of these requirements, like the UK FCA’s Sustainability Disclosure Requirements (SDR), are driven by regulators, while others, such as France’s SRI label and Germany’s FNG, are government or industry-led.

Clarity AI’s solution addresses the challenges of monitoring funds across complex metrics and frameworks -unique to each market- by providing a user-friendly platform that brings all the information into one single screen. “The goal is to reduce the amount of time fund managers spend on identifying potential investments that fall short of the standards, and understanding the cause for non-compliance, in order to decide on the best course of action,” said Henry Waind, Product Lead at Clarity AI.

Adaptive technology to keep up with market changes

Recent guidelines from the European Securities and Markets Authority (ESMA) underscore the importance of maintaining high standards for funds using ESG-related terms in their names, including an 80% minimum investment in sustainable assets. These developments highlight the critical need for tools that can quickly adapt to regulatory changes.

“Sustainability regulations and labels are proliferating, making it increasingly challenging for fund managers to keep up”, said Tom Willman, Regulatory Lead at Clarity AI. “A significant amount of resources is tied up in regulatory obligations. These could be better used to develop sustainable solutions that support end-investors’ sustainability goals, and technology is key to making this process more efficient.”

Clarity AI supports fund managers with the German FNG, UK SDR Labels, and will soon introduce additional labels, such as the French SRI label and the Belgian Towards Sustainability label. The solution also helps screen for the Paris-Aligned Benchmark (PAB) and Climate Transition Benchmark (CTB) exclusions for ESMA Naming Rules.