MiFID II Sustainability Requirements Methodology Document

This document is a methodology guide detailing the MiFID II Sustainability Requirements, which were amended in 2021 to incorporate sustainability preferences for financial advisors in the EU. It outlines the framework that financial institutions must follow to align their product offerings with these sustainability requirements. The guide describes the analytical framework, including sustainability indicators that assist financial advisors in integrating sustainability preferences into product recommendations. It also explains the Clarity AI Classifier, which categorizes financial products based on their sustainability characteristics. The document further details the scoring dimensions, including EU Taxonomy alignment, sustainable investment criteria, and considerations for Principal Adverse Impacts. Additionally, it addresses data sourcing, governance, and the limitations of the methodology, ensuring that financial institutions can effectively meet the regulatory requirements while promoting sustainable investment practices.