Screening vs. monitoring

Two phases of ESG evaluation

OpenSFDR supports two distinct phases of evaluating an asset's sustainability performance:

• Screening — During due diligence, before you invest. You check whether an asset complies with your ESG rules, apply thresholds and exclusions, and score how well it fits your strategy.
• Monitoring — After you invest, during the holding period. You regularly measure how assets evolve over time. At this stage there are typically no thresholds or exclusions — it's about tracking performance and generating SFDR-compliant reports.

Which indicators are used for each phase is controlled at the strategy level. Each indicator representation can be marked for screening, monitoring, or both. See Managing ESG strategies.

Screening

Screening is part of your due diligence process. You send a screening request to an asset, asking it to provide data for a specific date and specifying the expected investment size. The resulting screening report shows whether the asset meets your criteria.

Scoring

Screening reports include a normalized score between 0 and 1 for each indicator, giving you a clear signal of how well the asset performs against your rules.

What makes OpenSFDR's scoring powerful is that it's adaptive — your scoring rules can vary based on the actual characteristics of the company being screened. Instead of relying on sector-based benchmarks (which compare companies within an industry but ignore factors like size, geography, or years of operation), you define rules that account for the conditions that actually matter.

For example:

• Unadjusted gender pay gap — Only score this if the company has more than 100 employees, since the metric is only meaningful with a representative workforce.
• International standards compliance — Only apply if the company operates internationally.
• Governance requirements — Apply stricter thresholds for larger companies where more accountability is expected.

Each indicator can have multiple scoring rules with different thresholds, evaluated in priority order. The first rule whose conditions match is the one that applies. This means a single indicator can automatically adapt its expectations based on what's relevant for each specific asset.

Monitoring

Once an investment is active, monitoring tracks your portfolio companies' ESG performance throughout the holding period. The monitoring period automatically aligns with the investment period — and adjusts if the investment is extended or shortened.

Monitoring focuses on:

• Tracking how data evolves over the investment period
• Identifying gaps in reporting across your portfolio
• Generating SFDR-compliant reports with configurable timeframes and simulation methods

You can see a monitoring overview at the fund level, showing which portfolio companies have reported, which are pending, and which have data gaps.

Data reuse between screening and monitoring

Data provided during screening is automatically available for monitoring — you don't need to collect it twice. However, screening data often relates to an earlier period that may not be directly relevant for monitoring.

For example, you might run due diligence during Q2 2025 and collect data for that timeframe, but the investment only begins in Q4 2025. The Q2 data won't apply to the monitoring period.

What's next?

• Creating reports — Generate screening and monitoring reports
• Managing ESG strategies — Configure which indicators are used for screening vs. monitoring
• Managing ESG data — Enter and manage sustainability data