Understand the PAI module
How Principal Adverse Impacts are calculated and disclosed at portfolio and entity level.
Principal Adverse Impacts (PAIs) are a set of standardised ESG indicators measuring the negative effects investments may have on people and the environment. SFDR defines 14 mandatory indicators that apply to investments in investee companies (further indicators apply to sovereigns and real estate assets). PAI values are calculated from your portfolio holdings using a weighted approach — different indicators use different calculation methods (simple weights, value weights, market value multiplier, and others).
Who must report
Firms with more than 500 employees have been required to report PAIs at entity level since 2023. Smaller firms may choose to report voluntarily.
The 14 mandatory indicators
These are the 14 indicators applicable to investee companies — 9 environmental and 5 social and governance.
Climate and environment
- GHG emissions (Scope 1, Scope 2, and Scope 3)
- Carbon footprint
- GHG intensity of investee companies
- Exposure to companies in the fossil fuel sector
- Share of non-renewable energy consumption and production
- Energy consumption intensity per high climate impact sector
- Activities negatively affecting biodiversity-sensitive areas
- Emissions to water
- Hazardous and radioactive waste ratio
Social and governance
- Violations of UN Global Compact (UNGC) principles and OECD Guidelines for Multinational Enterprises
- Lack of processes and compliance mechanisms to monitor UNGC and OECD compliance
- Unadjusted gender pay gap
- Board gender diversity
- Exposure to controversial weapons (anti-personnel mines, cluster munitions, chemical and biological weapons, nuclear weapons)
Portfolio level vs entity level
PAIs are calculated and disclosed at two scopes with different rules and audiences.
At portfolio level
Per-fund PAI calculations are used in the Periodic Report and drive "Do No Significant Harm" tests for Article 8 and 9 funds. You can also view company-level contributions for engagement targeting.
At entity level
PAIs are aggregated across all in-scope funds at the management company level. The annual PAI Statement is due by 30 June of the year following the reporting period. It covers both quantitative indicators and qualitative statements on actions taken or planned.
Common questions
Do I have to report PAIs at entity level? Firms with more than 500 employees must report. Smaller firms may opt in voluntarily.
For PAI 11 (processes to monitor compliance) — is it UNGC and OECD, or UNGC or OECD? The PAI module implements PAI 11 as "and" — a company must have processes in place to monitor compliance with both the UNGC principles and the OECD Guidelines to be considered compliant on this indicator.
Can I generate a PAI statement that covers multiple funds combined? Yes. Navigate to the entity-level view (not an individual fund) and export from there. See Generate a PAI Statement for full steps.
How do I include both years in a PAI statement? Each export covers a single reporting year. To show prior-year comparison data, generate separate exports for each year and combine them. The Word export format is the most practical for this.