Introduction
The Sustainable Finance Disclosure Regulation (SFDR) requires financial market participants and financial advisers to disclose how they consider Principal Adverse Impacts (PAIs) on sustainability factors. This process can be complex and time-consuming, often necessitating external assistance. While the costs associated with helping investors comply with SFDR are typically borne by the investor, it is reasonable to forward invoices to portfolio companies (portcos) for extensive support provided to them. Here are some best practices and example communications to ensure a smooth invoicing process.
Best Practices for Invoicing Portcos
Clear Agreement on Services and Costs:
Define Scope: Clearly outline the services provided to the portco and the associated costs in the initial agreement.
We recommend to include at least a few hours of guidance to report of the PAIs and SFDR
Limited time to improve
A reasonable limit would be 4-5 hours
Transparency: Ensure that both parties understand the terms, including when and how additional costs will be invoiced.
We recommend discussing a maximum amount of hours or
A limit in scope such as restriction of the services to the PAIs
When in doubt, do not refrain from asking us for advice as well. We are able to send invoices for consulting instalment to fund manager, funds or portco. Please note though that the minimum instalment is 10 hours.