Principal Adverse Impacts (PAI)

Principal Adverse Impacts (PAI) are a set of mandatory sustainability indicators under the EU Sustainable Finance Disclosure Regulation (SFDR) that measure the most significant negative effects of investment decisions on environmental, social, and governance (ESG) factors. Financial market participants use PAIs to assess and disclose impacts such as greenhouse gas emissions, biodiversity loss, human rights issues, and board diversity, improving transparency for investors and other stakeholders.