Sustainable Finance & Transition Strategy

Structure sustainable finance products, meet SFDR obligations, and build credible transition strategies that withstand regulatory and investor scrutiny.

  • SFDR product classification, EU Taxonomy alignment, and the emerging SFDR 2.0 overhaul are reshaping how financial products are designed, labelled, and disclosed. We help asset managers, banks, and institutional investors build the compliance architecture and strategic positioning required to operate credibly in this evolving landscape.

Who This Is For

Heads of Sustainable Finance, Portfolio Managers, Product Development teams, Fund Structuring teams, and Compliance Officers at asset managers, banks, insurers, and pension funds navigating SFDR classification, EU Taxonomy reporting, and green bond framework requirements.

What We Deliver

SFDR Compliance & Product Classification

SFDR requires financial market participants to classify products under Article 6, 8, or 9 and make pre-contractual, periodic, and website disclosures accordingly. We conduct product-level classification assessments, design Principal Adverse Impact (PAI) monitoring frameworks, draft regulatory disclosure templates, and prepare for the anticipated SFDR 2.0 overhaul — including potential reclassification under the proposed categorisation system.

EU Taxonomy Alignment

The EU Taxonomy sets the technical screening criteria for environmentally sustainable economic activities. We help financial institutions assess portfolio-level Taxonomy alignment, design data collection processes for investee companies, calculate Taxonomy-eligible and Taxonomy-aligned revenue, CapEx, and OpEx ratios, and produce the disclosures required under the Taxonomy Regulation's Article 8 reporting obligations.

Green & Transition Bond Frameworks

For institutions issuing or investing in labelled bonds, we develop use-of-proceeds frameworks aligned with the EU Green Bond Standard, ICMA Green Bond Principles, and emerging transition bond guidance. This includes eligible project categorisation, allocation methodology, impact reporting design, and second-party opinion preparation.

Transition Planning for Portfolios

Regulators and investors increasingly expect financial institutions to articulate credible transition plans. We design portfolio-level transition strategies covering sectoral decarbonisation targets, engagement frameworks for high-emitting counterparties, portfolio alignment metrics (PACTA, TPI, SBTi portfolio tools), and governance structures for escalation when engagement fails.

Impact Measurement & Reporting

Beyond regulatory compliance, impact measurement frameworks for Article 9 products and impact-labelled strategies. We design theory-of-change models, output and outcome indicator sets, attribution methodologies, and reporting templates aligned with GIIN IRIS+, IMP, and emerging EU standards for impact claims.

Regulatory Context

This practice is driven by:

    • European Climate Law (Regulation (EU) 2021/1119) — Legally binding EU-wide target of climate neutrality by 2050 and a minimum 55% net greenhouse gas emission reduction by 2030.

    • EU Emissions Trading System (EU ETS) (Directive 2003/87/EC, revised 2023) — Cap-and-trade carbon pricing system covering power generation, industry, and aviation; free allocation phase-out underway.

    • Carbon Border Adjustment Mechanism (CBAM) (Regulation (EU) 2023/956) — Carbon import levy on cement, iron/steel, aluminium, fertilisers, electricity, and hydrogen; transitional reporting since October 2023, full financial implementation from 2026.

    • Energy Efficiency Directive (EED) (Directive (EU) 2023/1791) — Mandatory energy audits for non-SME enterprises, binding energy savings obligations, and efficiency-first principle.

    • Renewable Energy Directive (RED III) (Directive (EU) 2023/2413) — 42.5% renewable energy target by 2030; affects PPA strategies, Scope 2 accounting, and renewable fuel use.

    • CSRD / ESRS E1 (Climate Change) — Mandatory transition plan disclosure and greenhouse gas emissions reporting under the European Sustainability Reporting Standards. → CSRD Guide | → ESRS Guide

    • ESPR (Regulation (EU) 2024/1781) — Product-level carbon footprint declarations under the Ecodesign for Sustainable Products framework. → ESPR Guide

    • EU Batteries Regulation (Regulation (EU) 2023/1542) — Battery lifecycle carbon footprint requirements, including manufacturing emissions thresholds. → EU Batteries Guide

    • F-Gas Regulation (Regulation (EU) 2024/573) — Phase-down of fluorinated greenhouse gases affecting Scope 1 emissions in HVAC, refrigeration, and industrial applications.

    • Methane Regulation (Regulation (EU) 2024/1787) — Methane leak detection, measurement, and reduction requirements for the energy sector.

    • Industrial Emissions Directive (IED) (Directive 2010/75/EU, recast pending) — Best Available Techniques reference documents for industrial decarbonisation across high-emission sectors.

    • Fit for 55 Package — The EU’s comprehensive legislative bundle delivering the European Climate Law’s 2030 targets across energy, transport, buildings, and industry.

    • EFRAG Implementation Guidance on Transition Plans (ESRS E1) — Technical guidance on the mandatory transition plan disclosures under the climate change standard.

    • European Commission Recommendation on Transition Plans (C/2023/6453) — Non-binding guidance on credible corporate transition planning, including science-based target pathways.

    • National Climate Laws and Carbon Budgets — France (Strategie Nationale Bas-Carbone), Germany (Klimaschutzgesetz), UK (Climate Change Act 2008); binding national decarbonisation frameworks shaping corporate obligations.

    • EBA Guidelines on ESG Risk Management — Bank ESG risk expectations that cascade to borrowers through lending conditions and green loan eligibility criteria. Article forthcoming.

    • GHG Protocol — Corporate Accounting and Reporting Standard, Scope 2 Guidance, and Scope 3 Calculation Guidance; the foundational methodology for corporate greenhouse gas inventories.

    • SBTi Corporate Net-Zero Standard — Science-based target-setting methodology defining near-term and long-term decarbonisation pathways consistent with 1.5 degrees Celsius.

    • ISSB / IFRS S2 (Climate-Related Disclosures) — Global climate disclosure standard including Scope 3 emissions; relevant for multi-jurisdictional reporting. → ISSB Guide

    • ISO 14064-1:2018 — Specification for quantification and reporting of greenhouse gas emissions and removals at the organisation level.

    • ISO 14067:2018 — Requirements and guidelines for the quantification of the carbon footprint of products.

    • ISO 50001 — Energy management systems standard supporting Energy Efficiency Directive compliance.

    • ISO 14001:2015 — Environmental management systems standard providing the operational framework for environmental controls.

    • TNFD Recommendations (v1.0) — Nature and biodiversity framework relevant for identifying nature co-benefits and trade-offs of decarbonisation strategies. Article forthcoming.

    • ICVCM Core Carbon Principles — Integrity benchmark for voluntary carbon credits; defines quality thresholds for credit procurement.

    • VCMI Claims Code of Practice — Rules governing how companies can credibly claim the use of carbon credits alongside science-based reduction targets.

    • CDP Climate Change Questionnaire — Annual corporate climate disclosure platform used by investors and purchasing organisations.

    • Transition Plan Taskforce (TPT) Framework (UK) — Best-practice framework for credible corporate transition plans, increasingly referenced by EU guidance.

    • ACT Initiative (ADEME) — Sector-specific transition assessment methodology developed by the French Agency for Ecological Transition.

    • RE100 / EV100 / EP100 — Corporate commitment platforms for 100% renewable electricity, electric vehicle fleets, and energy productivity respectively.

    • Gold Standard / Verra VCS — Leading voluntary carbon credit registries and methodological frameworks.

Enhanced by Data & Intelligence

SD-KPI provides the sector-specific materiality data required for PAI monitoring and Taxonomy alignment assessment. The SD-KPIndex Family demonstrates a live institutional track record — investable indices on STOXX and Solactive platforms, tracked by VanEck ETFs — proving that rigorous ESG materiality screening translates into portfolio performance.

Explore our data capabilities →