PRI Launches Taxonomy Case Studies

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    Stockholm (NordSIP) – The launch of the EU Taxonomy at the end of this spring represents an important step for environmental investors. While it is inevitably imperfect, it set the first official definition of what constitutes a green activity across the entire spectrum of the economy. At the beginning of September, the PRI released a report discussing how to use the EU Taxonomy based on several case studies it collected from among its members.

    Case Studies

    The study began in 2019 before the Taxonomy had taken final shape. Nevertheless, the report summarises insights asset managers experiences and provides advice about their approach to common challenges in implementing the Taxonomy. The project’s page has been updated several times since the beginning of September and now contains from 36 unique case study discussions by 35 different asset managers

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    So far, KLP, PKA Pension, VidaCaixa, Wellington, responsAbility, SEB, Foresight, Amundi, KBI, Nordea, AP Pension, Aberdeen Standard Investments (Case 1 and Case 2), Credit Suisse, MN, Royal London Asset Management, ESG Portfolio Management, Carmignac, CORESTATE, BlueBay, Neuberger Berman, La Française, Robeco, the International Woodland Company, Wells Fargo, BlackRock, Swedbank Robur, the StepStone Group, Osmosis Investment Management, La Financiere de l’Echiquier, Invesco, Impax, AXA, Morgan Stanley and Ostrum provided case studies, which can be accessed individually.


    Informed by the case studies, the asset managers came up with a set of recommendations for asset managers as well as for policymakers and regulators. Asset managers should follow a four-step approach, establishing a framework, developing a process, identifying challenges and finding solutions, while policy recommendations focused on Data, guidance and Taxonomy development.

    The framework should be built in such a way that ensures adequate resources are set aside, and management is aware of this regulatory requirement. Asset managers should also integrate the taxonomy into the investment strategy and manage their expectations to be consistent with the advisory and evolving nature of the Taxonomy criteria. Processes for the implementation of the Taxonomy should be developed early and with appropriate time and expertise allocation. The report recommends that the process should focus on concrete, quantifiable findings in one sector, product or region. The approach should be incremental and bottom-up. To identify challenges, asset managers should stick to thresholds wherever possible, carefully consider reliability levels for different sources of data, verify with companies when in doubt and provide context for results. Lastly, to find solutions, asset managers should engage on data, share insights with partners, cooperate with data providers, support innovation and improvement from data providers and investigate validation and external assurance.

    Regarding policy recommendations, the study highlighted the need for policymakers to ensure that the right data, at the right level of granularity, and for the right issuers, is available. According to the report, investors also need clear guidance from regulators and realistic expectations from supervisors. Finally, investors expressed concern regarding competing international taxonomy frameworks.

    Image by Angelo Giordano from Pixabay

    Image courtesy of Pixabay
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