3.1.2 Alignment with ESG regulations

TICCS®+  has been designed to enable the alignment of identified impact and risk classes with various ESG standards, regulatory classifications, and reporting requirements.

For example, the work of the European Union's Sustainable Finance Disclosure Regulations (SFDR). SFDR requires "financial market participants and financial advisers (...) to disclose specific information regarding their approaches to the integration of sustainability risks and the consideration of adverse sustainability impacts" (SFDR, L317/2). While its primary public policy objective is to minimise adverse impacts on the environment and society, SFDR is also about the risks posed to financial asset values. It requires the disclosure of so-called sustainability risks that pose "an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the investment" (SFDR, L317/9). Finally, the description of what matters from an ESG standpoint is documented using Regulatory Technical Standards (RTS), which establishes a framework for reporting on principal adverse impacts and risks. The ESG data required by the RTS describes detailed indicators for environmental and social impacts. To ensure compatibility with the SFDR, the Scientific Infra & Private Assets infra ESG taxonomy allows mapping of the required disclosures to respective impact and risk classes. Given that TICCS®+ is an exhaustive list of ESG impacts and risks for the infrastructure sector, 100% of the mandatory disclosures can be (thematically) mapped to different sub-classes of this taxonomy.

The taxonomy thus serves as a meta-standard that allows the mapping of different reporting requirements and standards to one another and subsequently to individual impacts and risks material for infrastructure companies.