SFDR PAI 7: investee sites in or near biodiversity-sensitive areas
Principal adverse impact indicator 7 in the SFDR regulatory technical standards (Delegated Regulation (EU) 2022/1288, Annex I, Table 1) is 'activities negatively affecting biodiversity-sensitive areas': the share of investments in investee companies with sites or operations located in or near biodiversity-sensitive areas, where the activities of those companies negatively affect those areas. The definition of a biodiversity-sensitive area is borrowed from the EU Taxonomy — Natura 2000, World Heritage, Key Biodiversity Areas and other protected areas. The indicator therefore has two halves: a site question and an impact question. ERWAY Legality Assessment answers the site question per polygon.
An asset manager rarely has the investee's site polygons; a bank lending to the same company often does, and a company answering its investors' questionnaires always does. Whoever holds the polygons can screen them: every site checked against international protected-area records, World Heritage and biosphere sites, protected wetlands and land-tenure records, with the overlap in hectares, the relation to each designation and the date of the check. The result is the 'in or near' record the indicator rests on, kept per site so it can be re-run when the reference data changes. The ESRS E4 page shows the same record on the reporting company's side; the EU Taxonomy DNSH page covers the definition it shares.
The site half and the impact half
'Located in or near' is a spatial fact that can be established per site from records. 'Negatively affect' is a judgement about the activity that no spatial record can make. The product answers the first and leaves the second visibly open: an outcome of 'Restricted' or 'Verification needed' says a designation is present and what it restricts, not that the investee is harming it. Keeping the two apart is what makes the indicator defensible when the data is challenged.
What the screening carries
Per investee site: protected-area overlap with category and class; heritage and wetland relation with the footprint's confidence; Indigenous and community land tenure; species context alongside the outcome. Key Biodiversity Areas are not a layer in the product and Natura 2000 sites appear only where the international records carry them; both limits are stated on the page and in the export, so nobody reports a coverage the tool does not have.
From site register to indicator
The CSV export lists every site with its outcome, its designations and their dates; the GeoJSON carries the geometry for a GIS. Aggregating to the share of investments — by investee, by portfolio — is the manager's step, as is the engagement that follows a finding. The TNFD Locate page describes the same site record inside the nature-risk framework many managers use alongside the SFDR.