Principal adverse impacts (PAI)

Roles that need it

• ESG Investment Analyst
• ESG Research Analyst
• ESG Reporting Specialist
• Compliance Officer
• Portfolio Analyst

Skills it belongs to

• Sustainable finance regulation (SFDR, EU Taxonomy, ISSB)
• ESG frameworks and rating criteria
• Emissions accounting (Scope 1, 2, 3)

Related concepts

• SFDR (Sustainable Finance Disclosure Regulation)SFDR requires asset managers, insurers and advisers to disclose how they integrate sustainability risks and adverse impacts, at entity and product level. Funds are commonly labelled Article 8 (promoting E or S characteristics) or Article 9 (sustainable investment objective). The Commission proposed a revision in 2025.
• Greenhouse gas emission scopes (Scope 1, 2, 3)Scope 1 covers direct emissions from sources a company owns or controls, Scope 2 indirect emissions from purchased energy, and Scope 3 all other indirect emissions in the value chain. For banks and investors, financed emissions in Scope 3 category 15 are usually the largest part.
• Double materialityDouble materiality is the CSRD principle that a sustainability matter must be reported if it is material from either angle: the company's impacts on people and the environment (impact materiality) or the matter's effects on the company's finances (financial materiality).

Sources

• Commission Delegated Regulation (EU) 2022/1288 (SFDR technical standards), EUR-Lex (external site) accessed 31 Oct 2026
• Regulation (EU) 2019/2088 (Sustainable Finance Disclosure Regulation), EUR-Lex (external site) accessed 31 Oct 2026

Updated 31 Oct 2026.