Alter Domus looks to offer more standardized ESG reporting

Fund administrator Alter Domus’s new ESG reporting solution for alternatives managers gives them a more standardized option to collect and report the data most often being requested by investors and regulators.

Alter Domus managing director Antonis Anastasiou said other ESG reporting products are designed for more traditional asset classes and listed investments, leaving alternatives managers without an option for collecting, storing and reporting the ESG data they need. The ESG Reporting Solution gives managers an online portal to collect and share ESG data and provides scoring and ratings for a fund or portfolio company.

The reports are customizable based on the assets held by the fund, investor requests and regulatory requirements. The solution also features sharable data analysis on disclosure, compliance and other reporting requirements.

The fund administrator worked with clients to figure out what they need and then built a solution to meet those needs. Anastasiou added that they worked with different ESG data providers so that they could tailor to their clients’ requirements. And the data can be mapped so managers can compare their ESG programs with their peers.

“With other ESG reporting solutions out there, there wasn’t anything that was really a fit for different assets classes offered by alternatives managers, so we started working with our tech solutions partners to come up with something more tailored to private assets, and on an asset-per-asset basis.”

Anastasiou explained that the ESG reporting questionnaire that is part of the solution is “50 to 60 percent standardized,” and the rest of the information is focused on each specific asset class and industry.

There is also a regulatory reporting component of the ESG Reporting Solution that is modeled on the Sustainability Finance Disclosure Regulation (SFDR) in Europe. Under SFDR, financial market participants and financial advisers must disclose indicators of principal adverse impacts (PAIs) on sustainability factors.

Anastasiou said the asset scoring component of the ESG Reporting Solution is available globally, but added that the regulatory component is currently only available to European clients. He expects it to be expanded globally, however.

“We believe in the next 18 months there will be more clarity around regulatory requirements in the US and Asia. We expect to be able to roll out the product more on the regulatory side as this develops.”

Even though regulatory reporting is not yet available globally, clients in other regions are still interested in it, Anastasiou said.

“We’re getting a lot of requests from US managers who want to be prepared for tomorrow. They want to make sure these reporting requirements are in place from a regulatory standpoint when the data is needed.”