The EU Sustainable Finance Disclosure Regulation (SFDR) is a set of European Union rules that came into effect on March 10, 2021, with the goal of making the sustainability profile of funds more comparable and easier to understand for investors. They categorise products into specific types and include metrics for assessing the environmental, social and governance (ESG) impacts of the investment process for each fund.
As the name suggests, this regulation emphasises disclosure. The information on this page describes our approach to SFDR and includes our policies and procedures, disclosed in accordance with these rules.
Many of our clients will also be subject to these requirements. Apart from our disclosures in prospectuses, annual reports and on this website, we will provide our clients with the information they need to comply with SFDR.
SFDR is part of the EU’s wider Sustainable Finance framework, which is backed by a broad set of enhanced regulations that are applied across the region. The framework includes the Sustainable Finance Action Plan, which aims to promote sustainable investment across the EU, and a Taxonomy to categorise economic activity through a sustainability lens aimed at creating a more level playing field across the region.
The most visible and impactful aspect of SFDR is the reporting format funds and mandates will need to follow based on Articles 8 and 9. In addition, those funds that do not integrate any kind of binding sustainability constraints into their investment process, or have a sustainable investment objective, are subject to Article 6. While these funds are still allowed to be sold in the EU, they may not be promoted as funds with sustainability characteristics.
Article 8 products promote environmental or social characteristics, or a combination of those characteristics, provided the companies in which investments are made follow good governance practices.
Article 9 covers products targeting sustainable investments and those that have sustainable investment as their objective.
We maintain a fundamental conviction that material ESG factors can have an impact on investment returns and client outcomes. By integrating financially material ESG insights in decision making, we aim to better support delivery of long term risk-adjusted returns. Our holistic approach to stewardship aims to further unlock value for investors through engagement.
We understand there is no ‘one-size-fits-all’ approach when it comes to sustainable investing. We work in close partnership with our clients to understand their specific needs, identifying the right solutions to meet their goals.
Through harnessing the learnings and experience we have developed over the past three decades in sustainability risk management, the identification of investible opportunities and an understanding of trade-offs, we believe we are well positioned to address the sustainability challenges of today’s investors.