SFDR · CSRD · EDCI
The ESG disclosures
Four disclosures, one portfolio, and a great deal of overlap that nobody documents. This is what each one actually asks for, and where an answer given once satisfies more than one of them.
On this page
SFDR — Principal Adverse Impacts
SFDR asks a fund to state, in a fixed template, how its investment decisions harm sustainability factors. The template is Annex I of the Regulatory Technical Standards, and the hard part is not the disclosure — it is that eighteen numbers have to come from portfolio companies that have never been asked for them before.
- Instrument
- Regulation (EU) 2019/2088, with RTS in Delegated Regulation (EU) 2022/1288
- Who reports
- Financial market participants — including PE and VC managers above the threshold
- Mandatory above
- 500 employees at group level; voluntary comply-or-explain below
- Reference period
- 1 January – 31 December, published by 30 June the following year
- Template
- Annex I, Table 1 (mandatory) plus Tables 2 and 3 (at least one from each)
What Table 1 actually contains
Table 1 is often described as fourteen indicators. It has eighteen, numbered 1 to 18 — the count differs because indicators 15 to 18 only apply to asset classes many funds do not hold.
Indicators 1 to 14 cover investments in investee companies. That is the set a private equity fund almost always reports. Indicators 15 and 16 apply to sovereign and supranational exposure; 17 and 18 apply to real estate assets. A fund holding only corporate equity reports fourteen and marks the rest not applicable — it does not get to omit the rows.
| # | Indicator | Where the number comes from |
|---|---|---|
| 1 | GHG emissions — Scope 1, 2, 3 and total | Portfolio company carbon accounting, attributed by ownership share |
| 2 | Carbon footprint | Total financed emissions per €M invested |
| 3 | GHG intensity of investee companies | Company emissions per €M of revenue, weighted |
| 4 | Exposure to companies active in the fossil fuel sector | Revenue-derived flag per company |
| 5 | Share of non-renewable energy consumption and production | Energy mix, in MWh, from the company's own meters |
| 6 | Energy consumption intensity per high-impact climate sector | MWh per €M revenue, split by NACE section |
| 7 | Activities negatively affecting biodiversity-sensitive areas | Site location against protected-area registers |
| 8 | Emissions to water | Tonnes of priority substances discharged, per €M invested |
| 9 | Hazardous waste and radioactive waste ratio | Tonnes generated, per €M invested |
| 10 | Violations of UN Global Compact and OECD Guidelines | Controversy screening plus company self-declaration |
| 11 | Lack of processes to monitor UNGC / OECD compliance | Policy existence — a yes/no with evidence attached |
| 12 | Unadjusted gender pay gap | Payroll data: average male vs female gross hourly earnings |
| 13 | Board gender diversity | Board composition at the reporting date |
| 14 | Exposure to controversial weapons | Activity screening per company |
The two opt-ins nobody tells you are compulsory
Tables 2 and 3 are labelled additional, which reads as optional. They are not. A fund must select at least one indicator from Table 2 (additional climate and environment) and at least one from Table 3 (additional social, employee, human rights, anti-corruption and anti-bribery).
Most funds pick the cheapest available: emissions of air pollutants from Table 2, and either the number of identified cases of severe human rights issues or the absence of an anti-corruption policy from Table 3. Choosing an indicator you can actually evidence matters more than choosing an impressive one — the statement is a comply-or-explain document, and a blank cell is worse than a modest number.
Where statements get sent back
Four failure modes account for most of the rework we see.
- Coverage is not disclosed. If eleven of your twenty-two companies reported Scope 1, the statement must say so. A figure presented as portfolio-wide when it covers half the portfolio is the single most common finding.
- Attribution uses the wrong denominator. Financed emissions attribute by enterprise value including cash (EVIC), not by equity value or by revenue share. Getting this wrong moves the headline number by a factor, not a percentage.
- Prior-year comparison is missing. From the second reporting year, each indicator needs the previous period alongside it, on the same basis. Changing your carbon methodology between years without restating breaks the comparison.
- Actions are generic. The template asks what was done and what is planned. "Continue to engage with portfolio companies" is not an action. A named initiative with an owner and a date is.
How the platform computes it
The PAI statement is not a separate data collection exercise. Every input is already an indicator in the ESG questionnaire, tagged to its PAI code, plus the financial data entered for the reporting period — invested amount, enterprise value, revenue, headcount.
Because the tags live on the dataset rather than on question numbers, two portfolio companies can answer differently worded questionnaires and still feed the same PAI input. Coverage is reported per indicator, so the statement says what it is actually based on. The whole thing recomputes when a late answer lands.
Common questions
How many PAI indicators are mandatory?
Eighteen are listed in Annex I, Table 1, but they are scoped by asset class. A fund invested only in companies reports indicators 1 to 14; indicators 15 and 16 apply to sovereign exposure and 17 and 18 to real estate. On top of that, at least one indicator from Table 2 and one from Table 3 must be selected.
Does a sub-threshold fund have to publish a PAI statement?
No. Below 500 employees at group level the regime is comply-or-explain: a manager may state that it does not consider principal adverse impacts, and explain why. In practice LPs increasingly ask for the statement regardless, which is why many smaller funds produce one voluntarily.
What is the difference between SFDR PAI and EDCI?
SFDR is a disclosure regulation with a fixed template; EDCI is a voluntary benchmarking initiative with its own metric set. They overlap on emissions and board diversity but differ on definitions and on the denominator used for intensity. Collecting once and mapping to both is the only sane approach.
When is the PAI statement due?
The reference period is the calendar year, and the statement is published by 30 June of the following year on the manager's website.
CSRD and the ESRS
CSRD is the directive that turns sustainability reporting into something closer to financial reporting: a defined standard, a defined place in the management report, and assurance. For a fund, the operational question is rarely whether the fund is in scope — it is which of its portfolio companies are, in which year, and what that obliges the fund to collect.
The Omnibus package reopened both the scope thresholds and the phase-in dates for CSRD. The timing below reflects the position as reviewed in August 2026 — confirm against the current consolidated text before relying on it.
- Instrument
- Directive (EU) 2022/2464, reporting standards in the ESRS
- Reported in
- The management report, not a separate sustainability document
- Assurance
- Limited assurance initially, with a path towards reasonable assurance
- Basis
- Double materiality — impact outwards and financial risk inwards
- Status
- Scope and timetable amended by the Omnibus package — verify current text
Double materiality, in practice
Double materiality is the part that generates the most confusion and the most consultancy invoices. It means a topic is reportable if it matters in either direction: because the company's activity has a material impact on people or the environment, or because a sustainability matter poses a material financial risk or opportunity to the company.
The practical consequence is that the assessment determines the report. A company does not report all of the ESRS — it reports the datapoints attached to the topics its materiality assessment identified, and it must be able to show how it reached that conclusion. Two companies in the same sector can legitimately report different topic sets if their assessments differ and both are documented.
What it means for a fund
Most funds are not themselves in scope, and most of their smaller portfolio companies are not either. The exposure arrives from two directions.
- A large portfolio company in scope must report under the ESRS, which is a far heavier exercise than an annual ESG questionnaire — and it will need support the fund is often expected to provide.
- A small portfolio company selling to a large one gets asked for the data anyway, because its customer's value chain reporting depends on it. This is how CSRD reaches companies that will never be directly in scope.
- LP expectations move ahead of the law. Once an LP is accustomed to ESRS-shaped disclosure from part of its book, it starts asking the same of the rest.
How to prepare without over-building
The sensible position for a fund is to keep collecting on a harmonised base — France Invest, or your own dataset — and to add ESRS datapoints for the companies that genuinely need them, rather than pushing the full standard across a portfolio of SMEs that will never be in scope.
What is worth doing early, for everyone, is the traceability: knowing which company, which respondent and which document each number came from. That is the part of CSRD readiness that cannot be bought late, because assurance is about evidence rather than about numbers.
Common questions
Is my fund in scope of CSRD?
Most fund management companies are not directly in scope, though large ones can be. The more common exposure is indirect: a portfolio company in scope, or a small portfolio company whose large customer needs value chain data. Check the current thresholds, which the Omnibus package amended.
What is the difference between CSRD and SFDR?
CSRD is a corporate reporting directive — companies describe their own sustainability performance. SFDR is a financial disclosure regulation — fund managers describe the sustainability characteristics and adverse impacts of their products. CSRD data feeds SFDR reporting, not the other way round.
Do portfolio companies need a double materiality assessment?
Only those in scope. But the assessment is useful well beyond compliance: it is the exercise that decides which indicators are worth collecting at all, which is why we run a version of it when configuring a dataset.
France Invest — ESG questionnaire 2023
France Invest's ESG questionnaire exists because French portfolio companies were being asked the same things four times a year in four different shapes. It is a harmonisation effort by the industry association, aligned to European standards but written for companies that are not large enough to have a sustainability department.
- Author
- France Invest, through its ESG Commission
- Current version
- 2023
- Audience
- French portfolio companies, typically SMEs and mid-caps
- Alignment
- European standards, with French specificities retained
- Nature
- Industry standard, not a legal obligation
How it is structured
The questionnaire runs across the three ESG pillars with a governance and general-information block at the front. It is deliberately answerable by a finance director with an HR colleague — no specialist knowledge is assumed, and questions that require it carry guidance.
The design decision that matters for a GP is that most questions are quantitative with a defined unit. That is what makes portfolio-level consolidation possible at all. Free-text questions are the ones that never consolidate, and the questionnaire keeps them to a minimum.
Why it is a good starting point, not an endpoint
For a French fund, the France Invest set is the right base layer: it satisfies most LP expectations, it maps onto SFDR PAI inputs, and portfolio companies increasingly recognise it, which shortens the explaining.
It is a base layer rather than the whole thing because it is deliberately generic. A fund with an industrial thesis needs energy intensity by process; a healthcare fund needs patient safety indicators; a software fund needs almost none of the environmental block but does need data governance. Adding those on top of the harmonised core is what makes the answers useful for something other than compliance.
- Keep the harmonised core intact so answers stay comparable to the sector and reusable for SFDR and EDCI.
- Scope by NACE code rather than asking everything of everyone — an unanswerable question is the fastest way to lose a respondent.
- Add thesis-specific indicators that you will actually act on at board level, not ones that merely look thorough.
Running it across a portfolio
The failure mode is not the questionnaire — it is the operation around it. Twenty-two companies, one spreadsheet each, three chasing emails, and an analyst rebuilding the consolidation by hand three weeks before the LP deadline.
In the platform, France Invest 2023 is available as a dataset. Indicators are scoped by NACE code, phrased in French and English question by question, and sent by invitation with per-question ownership so finance, HR and operations each answer their own part. Completion and red flags update live, and the answers feed the PAI statement and the consolidation workbook without re-entry.
Common questions
Is the France Invest questionnaire mandatory?
No. It is an industry standard published by the association, not a regulation. Its weight comes from adoption: LPs recognise it, and portfolio companies asked for it repeatedly by different funds benefit from the harmonisation.
Does answering it satisfy SFDR?
Not on its own, but it covers a large share of the inputs. The PAI statement additionally needs the financial data for the period — invested amount, enterprise value, revenue — to compute attribution and intensity.
Can it be combined with our own indicators?
That is the intended use. Keep the harmonised core so answers stay comparable, and add sector or thesis-specific indicators on top. Scoping the additions by NACE code keeps the burden proportionate for each company.
EDCI — ESG Data Convergence Initiative
EDCI is the private markets answer to everyone asking portfolio companies for slightly different numbers. It is voluntary, it is a benchmark rather than a disclosure regime, and its value is comparative: your company's injury rate means little on its own and quite a lot against a sector cohort.
- Started
- 2021, by a group of GPs and LPs including CalPERS and Carlyle
- Nature
- Voluntary benchmarking initiative, not a regulation
- Reported by
- GPs, on behalf of portfolio companies, once a year
- Reference period
- Prior calendar or fiscal year
- Output
- An anonymised benchmark, cut by sector, geography and company size
The core metric set
EDCI keeps the required set deliberately short. The point was never comprehensiveness — it was getting enough GPs to report the same handful of things that the comparison becomes meaningful.
| Metric | What is asked | Overlaps SFDR PAI? |
|---|---|---|
| Scope 1 emissions | tCO₂e, direct | Yes — PAI 1, same underlying data |
| Scope 2 emissions | tCO₂e, market and location based | Yes — PAI 1 |
| Scope 3 emissions | tCO₂e, categories reported | Yes — PAI 1, but PAI phase-in differs |
| Renewable energy consumption | % of total energy consumed | Partly — PAI 5 is the inverse framing |
| Board diversity | % women on the board | Yes — PAI 13, same definition |
| Work-related injuries | Rate per 100 employees, plus fatalities | No EDCI-only |
| Net new hires | Headcount added in the period | No — EDCI only |
| Employee engagement | Whether a survey was run, and participation | No — EDCI only |
Where the definitions diverge
The metrics that overlap with SFDR are not always the same number. Board diversity is defined identically and can be reported once. Emissions are the same measurement but a different denominator: SFDR intensity uses revenue and attribution uses enterprise value including cash, while EDCI reports company-level absolutes alongside revenue.
Renewable energy is the clearest trap. EDCI asks for renewable consumption as a share of total; PAI 5 asks for the share of non-renewable consumption and production. They are not complements — production is in one and not the other. Reporting one as the other produces a number that survives a spreadsheet and fails a review.
Collect once, map twice
The practical approach is to treat neither framework as the collection format. Ask the portfolio company for the underlying quantity — kilowatt-hours by source, headcount at period end, recordable injuries — and derive both EDCI and PAI presentations from it.
In the platform, EDCI mapping sits on the dataset alongside the PAI tags, so one questionnaire feeds both. The EDCI submission exports as a workbook per portfolio company, with the fund-level aggregate computed from the same answers rather than re-entered.
Common questions
Is EDCI mandatory?
No. It is a voluntary initiative. In practice, LPs that participate increasingly expect their GPs to submit, so for many funds it is contractually rather than legally required.
Can EDCI figures be reused for the SFDR PAI statement?
Some directly, some not. Board diversity transfers cleanly. Emissions need re-attribution using enterprise value including cash. Renewable energy needs recomputing, because EDCI and PAI 5 frame it differently.
Who submits — the GP or the portfolio company?
The GP submits on behalf of its portfolio companies. The companies supply the underlying data, which is why the collection exercise usually rides on the same annual ESG questionnaire.