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Open Protocol Expands To ESG And Digital Assets

The Open Protocol, a risk framework chaired by investment consultant Albourne and the Standards Board for Alternatives Investments, has received its 2021 update. New this year is a module for potential ESG risk exposure and a new tab for Digital Assets reporting.

The new ESG module enables investors to better understand the potential ESG profile of their portfolio as a starting point for further discussion with investment managers. The new tab for Digital Assets allows investors to assess their exposure to different types of digital assets and changes in allocation over time. The data can be aggregated across funds, thereby providing investors with an overall understanding of exposure.

“At the SBAI, our mission is to improve industry outcomes by promoting responsible practice, partnership, and knowledge. Key to this is making the industry more transparent and efficient. We are excited to expand the Open Protocol framework in the important areas of ESG and crypto risk reporting to facilitate better investment decision making by institutional investors,” says Thomas Deinet, Executive Director of the SBAI.

The changes to the Open Protocol framework were developed in consultation with the Open Protocol Working Group, the SBAI Responsible Investment Working Group and other parties with interest in Open Protocol and Digital Assets.

“After over a decade of providing a consistent framework to enable investors in alternatives to compare ‘apples to apples’ – we are delighted to be taking risk transparency to the next level. Both ESG and Digital Assets hold their own challenges when it comes to consistency and transparency.  By incorporating them into an established framework with reporting managers representing over $2.37trn of AUM (Reporting to Albourne, figures as of August 2021) - we are starting the journey in pushing the boundaries on ESG and Digital Asset Reporting,” says Gaurav Amin, Albourne’s Head of Fintech and Implementation.

Launched in August 2011, Open Protocol is a free and publicly available exposure and risk reporting framework for Alternative Investment Funds. The new Open Protocol template can now be accessed in SBAI’s Toolbox, alongside the updated Open Protocol manual and a document highlighting all 2021 changes. Funds are expected to switch to the 2021 Open Protocol template after a 6-month implementation period.

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