Sustainable Finance Disclosure Regulation
What is SFDR?
Sustainable finance disclosure regulation (“SFDR”) is part of the EU’s wider Sustainable Finance Framework, which is backed by a broad set of new and enhanced regulations. The framework includes the Sustainable Finance Action Plan, which aims to promote sustainable investment across the EU, and a new Taxonomy on sustainable activities which aims to provide a robust, science-based transparency tool for companies and investors. The idea being that it will create a common language which investors can use when investing in projects and economic activities that have a substantial positive impact on the climate and the environment.
Product Classifications Under SFDR
Under the new classification of funds and mandates, there are three categories, as laid out by Articles 8 and 9 of the SFDR. Those funds not defined by either article are referred to as ‘Other’ funds.
Our Funds Under SFDR
We believe that the integration of ESG issues into our investment process with the aim of improving standards, reducing risk and enhancing returns is essential. We therefore use an integrated sustainable investment approach, where ESG screening is incorporated into the fundamental analysis of companies across our funds. We consider ESG analysis to be a complementary tool to the fundamental research which we undertake to understand, with a high degree of conviction, a company’s earnings and growth potential. Currently our funds do not have explicit sustainable or ESG targets or objectives and therefore are categorised as ‘Other’ under the SDFR.