What Compliance and Reporting does
Connect Earth's Compliance and Reporting product helps asset managers and financial institutions produce the regulatory reporting required under EU sustainable finance law.
What it produces
The product covers four main regulatory outputs:
- PAI Statement — your entity-level Principal Adverse Impacts disclosure under SFDR Article 4
- Periodic Report — fund-level SFDR disclosures for Article 8 and Article 9 funds
- EET (European ESG Template) — a standardised data file shared with distributors and advisers
- EU Taxonomy Alignment — the percentage of a fund's investments that are taxonomy-aligned, broken down by Turnover, CapEx, and OpEx
Data flows through from your uploaded portfolio holdings. Connect Earth maps ISINs to issuers, applies the relevant ESG and regulatory datasets, and generates compliant outputs you can export as PDF, Word, or Excel.
Frameworks supported
SFDR — Sustainable Finance Disclosure Regulation
SFDR requires investment managers to disclose how they consider sustainability in their investment decisions. Compliance and Reporting supports SFDR obligations at two levels:
Entity level: Your firm must publish a Principal Adverse Impacts (PAI) statement each year, describing the negative ESG effects of your investments across all funds. This is due by 30 June of the year following the reporting period.
Product level: Each fund must be classified as Article 6, 8, or 9. Article 8 and 9 funds must publish a Periodic Report at least annually, setting out how the fund's sustainability characteristics or objectives were met during the period.
PAI values are calculated automatically from portfolio holdings using a weighted approach. Different indicators use different calculation methods.
EU Taxonomy
The EU Taxonomy is a classification system defining what counts as environmentally sustainable economic activity. The product calculates taxonomy alignment for your portfolio holdings across three KPIs:
- Turnover — percentage of revenue from taxonomy-aligned activities (the primary metric for fund-level reporting)
- CapEx — percentage of investment expenditure that is aligned
- OpEx — percentage of operational spend that is aligned
For an activity to count as taxonomy-aligned, it must make a Substantial Contribution (SC) to at least one of six environmental objectives, Do No Significant Harm (DNSH) to the others, and meet Minimum Safeguards (MS). Activities that fall within covered sectors but have not been fully assessed are taxonomy-eligible — eligible does not mean aligned.
EET — European ESG Template
The EET is a standardised Excel file developed by FinDatEx. Fund managers use it to share ESG data — taxonomy alignment percentages, PAI indicators, and SFDR product classification — with distributors and financial advisers, so they can fulfil their own obligations under MiFID II and IDD.
Using the EET is voluntary as a format, but the underlying disclosures it contains are required by regulation. The product auto-populates the quantitative ESG fields from your portfolio data; you complete the general questions (reporting period, fund classification, sustainable investment share) and export.
MiFID II — Sustainability Preferences
MiFID II requires investment advisers and portfolio managers to ask clients about their sustainability preferences — whether they want a minimum share of taxonomy-aligned investments, SFDR sustainable investments, or investments that consider PAIs. Compliance and Reporting supports this through the MiFID II end client report, which shows how a portfolio aligns with a client's stated preferences.
TCFD — Task Force on Climate-related Financial Disclosures
The product supports TCFD-aligned climate risk reporting, including portfolio-level temperature scores and Science-Based Targets initiative (SBTi) alignment data.
PCAF — Partnership for Carbon Accounting Financials
The product applies PCAF-aligned methodologies for calculating financed emissions — the GHG emissions attributable to a portfolio's investments.
API
The Compliance and Reporting product has its own API, separate from the Carbon Measurement API. See the Compliance and Reporting API reference.