Sustainable Finance Disclosures Regulation (SFDR)
(Regulation (EU) 2019/2088)
The policy agenda known as the EU sustainable Finance Action Plan, included mandatory reporting and disclosure regulations in the form of the Sustainable Finance Disclosures Regulation (SFDR). The SFDR establishes a hierarchy of categories based on investment focus.
Compliance with the SFDR regulation is mandatory for organisations promoting and distributing products and supplying portfolio management services into the EU. The regulation specifically applies to Stewart Investors funds within the First Sentier Investors Global Umbrella Fund plc. The reporting and disclosures is also relevant to our segregated mandate clients based in the EU.
All in scope products have to report under Article 6 on whether ESG is integrated into investment decisions.
* Within the EU/EEA this strategy is only available to investors in a segregated mandate.
Funds may also be classified as Article 8 (if they promote environmental or social characteristics) or Article 9 (if they have a sustainable investment objective).
The classifications do not require any change to our investment approach but in the case of the Sustainable Funds Group, Article 9 alignment requires articulation of the sustainable development benefits of our approach. Indicators must be selected and disclosed to measure success on which we have to report annually.
We support the SFDR’s efforts to empower end-investors to make informed decisions on where to allocate their saving, pensions and other investments based on increased transparency from asset managers on their sustainability risks and characteristics. We also support the underlying policy objectives of the SFDR (and wider EU Sustainable Finance Action Plan) in meeting the Paris Climate Agreement objectives, contributing to the achievement of the UN Sustainable Development Goals and providing high quality information for investors. However, as mentioned in our response to the European Sustainable Finance Consultation, we cannot iterate enough the importance of a coordinated global approach based on principles.
Below are links to the firm-level disclosures required to be made under SFDR by the First Sentier Investors group.
Article 3 – Policy relating to the integration of sustainability risks in our investment decision-making process.
Article 4 - Transparency of adverse sustainability impacts at entity level – Principal Adverse Impacts Statement.
Article 5 - Transparency of remuneration policies in relation to the integration of sustainability risks.
Article 6 - Transparency of the integration of sustainability risks.
Article 10 - Transparency of the promotion of environmental or social characteristics and of sustainable investments on websites.
The Prospectus for the First Sentier Investors Global Umbrella Fund plc now includes an SFDR appendix disclosing the required pre-contractual information and Fund categories.