SFDR & CSRD Compliance

The EU Sustainable Finance Disclosure Regulation (SFDR) and Corporate Sustainability Reporting Directive (CSRD) create mandatory reporting requirements for fund managers and corporates operating in Europe. DPX produces transaction-level ESG data in formats that map directly to these obligations — making every DPX settlement a source record for sustainability reporting.

What SFDR and CSRD require

SFDR (effective 2021, Level 2 RTS in force 2023) requires:

Asset managers and financial advisers to disclose how they integrate sustainability risks
Article 8 funds to demonstrate they promote environmental or social characteristics
Article 9 funds to demonstrate sustainable investment as their objective
Principal Adverse Impact (PAI) indicators at the portfolio and product level

CSRD (in force 2024–2028 phased rollout) requires:

Large companies and listed SMEs to report sustainability impacts, risks, and opportunities
Double materiality assessments — financial materiality AND impact materiality
Reporting against ESRS (European Sustainability Reporting Standards)
Assurance by an external auditor

Both require transaction-level data — the ability to demonstrate that specific financial activities either support or do not undermine sustainability objectives. This is where DPX enters.

What DPX provides

Every DPX settlement produces a compliance record that includes:

Per-transaction ESG fields

{
  "settlement": {
    "id": "dpx-93e89fe0",
    "txHash": "0x...",
    "timestamp": "2026-06-03T14:22:00Z",
    "amount": "250000.00",
    "currency": "USD",
    "settlementAsset": "USDC"
  },
  "esg": {
    "score": 74,
    "tier": "GOOD",
    "settlementSurcharge": "0.10%",
    "components": {
      "environmental": 71,
      "social": 76,
      "governance": 75
    },
    "sfdr": {
      "adverseImpactFlag": false,
      "paiIndicators": {
        "ghgEmissions": "BELOW_THRESHOLD",
        "carbonFootprint": "MODERATE",
        "biodiversityRisk": "LOW",
        "waterUsage": "MODERATE",
        "wasteGeneration": "LOW",
        "socialViolations": false,
        "boardGenderDiversity": "COMPLIANT",
        "controversialWeapons": false
      },
      "article8Compatible": true,
      "article9Compatible": false,
      "taxonomyAligned": false
    },
    "dataSourceCount": 8,
    "lastUpdated": "2026-06-03T14:00:00Z"
  },
  "compliance": {
    "fatfR16Compliant": true,
    "micaCompliant": true,
    "geniusCompliant": true
  }
}

PAI indicator mapping

DPX maps its ESG scoring dimensions to the SFDR Annex I Principal Adverse Impact indicators:

SFDR PAI Indicator	DPX Source	Field
GHG Emissions (Indicator 1)	World Bank CO2 per capita	`esg.sfdr.paiIndicators.ghgEmissions`
Carbon Footprint (Indicator 2)	Climate Monitor CO2 ppm	`esg.sfdr.paiIndicators.carbonFootprint`
Biodiversity (Indicator 7)	Earth systems tipping point proximity	`esg.sfdr.paiIndicators.biodiversityRisk`
Water (Indicator 8)	Supply chain water level signals	`esg.sfdr.paiIndicators.waterUsage`
Hazardous Waste (Indicator 9)	EPA ECHO violation data	`esg.sfdr.paiIndicators.wasteGeneration`
Social Violations (Indicator 10)	UN SDG 8.8 labour rights	`esg.sfdr.paiIndicators.socialViolations`
Board Gender Diversity (Indicator 13)	UN SDG 5.5.2 women in management	`esg.sfdr.paiIndicators.boardGenderDiversity`
Controversial Weapons (Indicator 14)	Sanctions / industry classification	`esg.sfdr.paiIndicators.controversialWeapons`

CSRD double materiality

For CSRD reporting, DPX provides both dimensions:

Impact materiality: The environmental and social impacts of the counterparty’s activity — captured in the E and S score components
Financial materiality: The ESG risk exposure to the institution — reflected in the settlement surcharge rate

These map directly to ESRS E1 (climate), E3 (water), S1 (own workforce), S4 (consumers), G1 (governance).

Using ESG data for fund reporting

Article 8 fund managers

For funds promoting environmental or social characteristics, DPX settlement records can demonstrate that:

Counterparties meet a minimum ESG score threshold (configurable per fund mandate)
PAI indicators are within acceptable ranges for the fund’s disclosed policy
Transactions are routed away from counterparties with active social or environmental violations

# Get ESG score for a counterparty before settlement
GET https://esg.untitledfinancial.com/esg-score?lei=5493001KJTIIGC8Y1R12

# Response includes sfdr block
{
  "score": 74,
  "sfdr": {
    "article8Compatible": true,
    "paiIndicators": { ... }
  }
}

Article 9 fund managers

For funds with sustainable investment as their objective, the ESG Oracle’s article9Compatible flag indicates whether a counterparty meets the threshold for sustainable investment classification under SFDR Article 2(17). This requires:

Composite ESG score ≥ 80
No active PAI violations
Taxonomy alignment flag (requires counterparty NACE code mapping)

Corporate treasuries (CSRD)

Under CSRD, large corporates must report on their own value chain sustainability impacts. DPX settlement records provide:

Counterparty ESG profiles for Scope 3 supply chain disclosures
Transaction-level ESG data for ESRS E1 (climate) and S4 (value chain) reporting
On-chain audit trail auditable by external assurance providers

Audit trail

Every DPX settlement produces an immutable on-chain record. For SFDR/CSRD assurance purposes:

Record	Location	Access
Settlement transaction	Base mainnet	`txHash` on Basescan
VoP compliance attestation	`DPXVerificationOfPayee` contract	On-chain, verifiable by any auditor
ESG score at settlement time	Compliance Oracle D1	API: `GET /vop/history/:wallet`
PAI indicators at settlement time	ESG Oracle D1	API: `GET /esg-score?lei=:lei`

Because ESG scores are recorded at settlement time and the txHash is on-chain, auditors can independently verify the ESG profile applied to any historical transaction.

Integration for European institutions

To integrate DPX ESG data into your SFDR/CSRD reporting workflow:

Pre-trade ESG screening — call GET /esg-score?lei=:lei before initiating settlement to get SFDR PAI indicators for the counterparty
Settlement execution — the ESG score is automatically embedded in every settlement response
Reporting export — use the esg.sfdr block in settlement records as a source record for PAI disclosure
Audit support — reference txHash and the DPXVerificationOfPayee contract for external assurance

For SFDR reporting templates or CSRD data mapping documentation, contact case@untitledfinancial.com or apply via the beta access page.