SFDR Disclosures
The following disclosures were last updated on 6th September 2024
The Company qualifies as a Financial Adviser as defined under Article 2 of the SFDR.
Article 3 – Integration of Sustainability Risks
As per Article 3 of SFDR, financial advisers shall publish on their websites information about their policies on the integration of sustainability risks in their investment advisory process. In this respect, the Company confirms that sustainability risks are integrated within its investment advisory process.
As outlined within the Company’s ‘Responsible Investing – The Spectrum Approach’ document, the Company initially ‘labels’ the investment solutions recommended as follows, in addition to referring to the corresponding SFDR article of the respective UCITS Schemes:
– Agnostic;
– ESG Integration & Stewardship;
– Sustainability Focus & Exclusions;
– Impact Investing.
For further details on the aforementioned categories, please refer to the Company’s ‘Responsible Investing – The Spectrum Approach’ document, found here .
Following the Client Fact Find exercise undertaken on each of the Company’s clients, the Company would determine which investments may be suitable for such clients, based on their knowledge and experience, investment objectives, risk tolerance, financial situation and sustainability preferences. Depending on the results of such exercise, the investment advisors issue a Suitability Report with the relevant investment advice.
Upon completing the Sustainable Investing Questionnaire, the investment advisor is able to obtain an understanding of each client’s sustainability preferences and may assign a score from 1 to 5 as a guide for the investment advisor when providing investment advice. In this respect, the initial guidance is as follows:
– 1 = Agnostic;
– 2 = ESG Integration & Stewardship;
– 3 = Sustainability Focus and Exclusions;
– 4 = Sustainability Focus and Exclusions; and
– 5 = Impact.
Should further investigation be required to better define the client’s sustainability preferences, the Company may employ further resources such as: SRI Services; SRI Stylefinder; and FundEcomarket. This enables the Company’s investment advisors to refine the sustainability investment recommendations provided to clients.
It should be noted that, all UCITS funds are to disclose within their offering documentation, whether they are Article 6 (equivalent to Agnostic), Article 8 (ESG Integration & Stewardship) or Article 9 (Sustainability Focus & Exclusions or Impact Investing).
Article 4 – Consideration of principle adverse impacts
As a financial adviser, Article 4 of the SFDR requires that the Company’s website outlines information about whether they consider principal adverse impacts of its investment advice on sustainability factors.
The Company considers principal adverse impacts of its investment advice on sustainability factors.
Furthermore, the Company maintains an approved Responsible/ESG Investing Fund List, whereby each UCITS fund listed would be linked with the appropriate SFDR Article categorization, the principle SRI Style of the fund, and the suitability of each fund for inclusion in different types of portfolios, in line with the client’s Sustainability Investing Questionnaire assigned of 1 to 5, as detailed above.
The Company also maintains a non-ESG funds list, whereby the UCITS funds listed would also be labeled to reflect the extent of ESG integration or exclusion, to allow inclusion in lower level sustainable/ESG portfolios. The Company’s investment advisors highlight where investment solutions are available with higher levels of ESG integration when selecting between two or more similar funds.
Article 5 – Remuneration Policy
The Company is required under Article 5 of SFDR to include information within its Remuneration Policy of how its policy is in line with the integration of sustainability risks.
The Company has included within its Remuneration Policy information about how its Remuneration Policy is consistent with the integration of sustainability risks. The Company promotes transparency in its Remuneration Policy and ensures that its investment advice promotes sound and effective risk management with respect to sustainability risks.
As outlined within its Remuneration Policy , the Company typically pays its identified staff fixed remuneration. Variable remuneration is not paid out unless it is determined to be justified by the Company’s governing body following a performance assessment based on quantitative (financial) and qualitative (non-financial) criteria. In this respect, the Company also does not currently have in place any incentives when it comes to advising in products with sustainable characteristics over those that do not. Variable remuneration is therefore deemed to have a limited impact on the risk profile of the Company’s clients, as this prevents excessive risk taking in respect of sustainability risks.
In light of the above, it is deemed that there is no to minimal risk of misalignment with the integration of sustainability risk in the investment advice of the Company in respect of its clients.
Please refer here to the Company’s Remuneration Policy.