Judiciousness. Attention to detail. Passion. Adaptability. No shortcuts.
Sustainable finance is about considering environmental, social and governance (ESG) criteria when making investment decisions. These extra‑financial aspects complement traditional financial analysis and portfolio construction techniques.
measure dimensions such as: environmental preservation, climate change mitigation, reduction of carbon footprint or greenhouse gases, biodiversity preservation, increasing energy efficiency, combating water and air pollution, combating deforestation.
measure the respect of human values such as: equality, diversity and inclusion, education and training, respect for human rights, fair and equitable labour relations, prohibition of child labour, development of local communities.
help to ensure sound organisational rules in public and private organisations such as: diversity on boards of directors, guidelines for executive remuneration, transparency of information, employee relations, traceability in the supply chain, fight against corruption.
Supporting the objectives of the European Green Deal, the EU launched the Sustainable Action Plan with the aim to channel investments into the transition to a climate neutral, resilient and resource‑efficient and fair economy. Further to the application of the Sustainable Action Plan, Regulation (EU) 2019/2088 on sustainability‑related disclosure requirements in the financial services sector (SFDR) establishes harmonised disclosure rules and promotes transparency at entity and product level.
At entity level, the SFDR requires AIFMs to disclose according to three main areas: sustainability risks, principal adverse impacts of investment decisions on sustainability factors, and promotion of environmental and/or social characteristics. At product level, the SFDR establishes a specific financial products categorization according to their level of integration of sustainability factors in the investment decision making processes.
Funds classification according to SFDR
Funds that have sustainable investment as their objective (dark green).
Funds that promote environmental and/or social characteristics (light green).
Funds without a sustainability scope.
Funds making sustainable investments with an environmental objective may be taxonomy‑aligned or not. Regulation (EU) 2020/852 (the Taxonomy Regulation) sets out the conditions that an economic activity has to meet in order to qualify as environmentally sustainable. In particular, the Taxonomy Regulation establishes six environmental objectives: climate change mitigation; climate change adaptation; the sustainable use and protection of water and marine resources; the transition to a circular economy; pollution prevention and control; the protection and restoration of biodiversity and ecosystems.
Whatever the most appropriate classification for your fund, we can help you to meet all regulatory requirements including prospectus disclosures, website disclosures and periodic reporting on sustainability risks and principal adverse impacts.
We cannot diversify away from our exposure to the planet. In that sense climate change is the ultimate systemic risk.