No consideration of adverse impacts of investment advice on sustainability factors
Introduction
The purpose of the European Regulation [(EU) 2019/2088, the “SFDR”] on sustainability-related disclosures in the financial services sector is to promote sustainability in the finance sector in Europe and strengthen transparency obligations on ESG issues, in particular to make it easier to compare financial products. The SFDR has introduced the concept of principal adverse impacts (“PAIs), which are negative impacts of investment decisions on sustainability factors i.e. environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters.
The SFDR require Eurolife to make a prominent statement as to whether it considers or not any principal adverse impacts on its investment decisions on Sustainability Factors.
Eurolife does not consider the adverse impacts of investment decisions on sustainability in the manner prescribed by Article 4 of SFDR.
Reasons why Eurolife does not consider the principal adverse impacts of investment decisions on sustainability factors in investment advice on financial products.
Eurolife understands and supports EU’s Environmental, Social and Governance (“ESG”) initiatives, and in particular on the establishment of a framework to facilitate sustainable investment. Currently, the Company invests primarily in UCITS funds, some of which are ESG compliant. However, the investments underlying the financial products do not take into account the EU criteria for environmentally sustainable economic activities.
Eurolife is in a transitional process of adapting and developing its internal processes and policies to assess the integration of sustainability risk considerations and disclosures in a systematic manner.
However, the lack of readily available and uniform priced data makes it difficult to comply with many of the technical requirements of the Principal Adverse Impact regime.
Furthermore, it is noted that the remuneration policy is consistent with the integration of sustainability risks and it is not linked to ESG risk-adjusted performance. Therefore, the remuneration policy does not encourage risk taking with respect to sustainability risks.
Eurolife will keep developing its framework and tools based on more relevant data becoming available, market practices and any additional clarity provided by regulators, and will endeavor to consider adverse impacts of investment advice.