SECTION 1 — Financial market participants
Statement by financial market participants that they do consider principal adverse impacts of their investment decisions on sustainability factors
1. By 30 June each year, the financial market participants referred to in Article 4(1), point (a), of Regulation (EU) 2019/2088, or Article 4(3) or Article 4(4) of that Regulation, shall publish on their website, in a separate section titled: ‘Statement on principal adverse impacts of investment decisions on sustainability factors’, the information referred to in Article 4(1), point (a), of Regulation (EU) 2019/2088, in Article 4(2), (3) and (4) of that Regulation, and in Articles 4 to 10 of this Regulation. That information shall cover the period of 1 January until 31 December of the preceding year, and shall be published in the section ‘Sustainability-related disclosures’ referred to in Article 23 of this Regulation.
2. Financial market participants shall publish the statement referred to in paragraph 1 in the format of the template set out in Table 1 of Annex I.
3. By way of derogation from paragraph 1, for financial market participants that publish the statement referred to in Article 4(1), point (a), of Regulation (EU) 2019/2088, or Article 4(3) or Article 4(4) of that Regulation for the first time, the information referred to in paragraph 1 shall cover the period from the date on which the principal adverse impacts of investment decisions on sustainability factors were first considered until 31 December of that year. Those financial market participants shall publish the information in the statement referred to in paragraph 1 by 30 June of the following year.
Summary section
In the summary section in Table 1 of Annex I, financial market participants shall include all of the following:
(a)
the name of the financial market participant to which the adverse sustainability impacts statement relates;
(b)
the fact that principal adverse impacts on sustainability factors are considered;
(c)
the reference period of the statement;
(d)
a summary of the principal adverse impacts.
The summary section in Table 1 of Annex I shall be drafted in all of the following languages:
(a)
one of the official languages of the home Member State of the financial market participant and, where different, in an additional language customary in the sphere of international finance;
(b)
where a financial product of the financial market participant is made available in a host Member State, one of the official languages of that host Member State.
The summary section shall be of a maximum length of two sides of A4-sized paper when printed.
Description of the principal adverse impacts of investment decisions on sustainability factors
1. In the section ‘Description of the principal adverse impacts on sustainability factors’ in Table 1 of Annex I, financial market participants shall complete all the fields that relate to the indicators related to principal adverse impacts of their investment decisions on sustainability factors, and they shall add all of the following:
(a)
information on one or more additional climate and other environment-related indicators, as set out in Table 2 of Annex I;
(b)
information on one or more additional indicators for social and employee matters, respect for human rights, anti-corruption and anti-bribery matters, as set out in Table 3 of Annex I;
(c)
information on any other indicators used to identify and assess additional principal adverse impacts on a sustainability factor.
2. In the section ‘Description of the principal adverse impacts on sustainability factors’ in Table 1 of Annex I, financial market participants shall describe the actions taken during the period from 1 January to 31 December of the preceding year and actions planned or targets set for the subsequent period from 1 January to 31 December to avoid or reduce the principal adverse impacts identified.
3. Financial market participants shall include in the columns ‘Impact’ in the section ‘Description of the principal adverse impacts on sustainability factors’ in Table 1 of Annex I a figure on impact as the average of impacts on 31 March, 30 June, 30 September and 31 December of each period from 1 January to 31 December.
Description of policies to identify and prioritise principal adverse impacts of investment decisions on sustainability factors
1. In the section ‘Description of policies to identify and prioritise principal adverse impacts on sustainability factors’ in Table 1 of Annex I, financial market participants shall describe their policies to identify and prioritise principal adverse impacts on sustainability factors and how those policies are kept up to date and applied, including all of the following:
(a)
the date on which the governing body of the financial market participant approved those policies;
(b)
how the responsibility for the implementation of those policies within organisational strategies and procedures is allocated;
(c)
the methodologies to select the indicators referred to in Article 6(1), points (a), (b) and (c), and to identify and assess the principal adverse impacts referred to in Article 6(1), and in particular an explanation of how those methodologies take into account the probability of occurrence and the severity of those principal adverse impacts, including their potentially irremediable character;
(d)
any associated margin of error within the methodologies referred to in point (c) of this paragraph, with an explanation of that margin;
(e)
the data sources used.
2. Where information relating to any of the indicators used is not readily available, financial market participants shall include in the section ‘Description of policies to identify and prioritise principal adverse impacts on sustainability factors’ in Table 1 of Annex I details of the best efforts used to obtain the information either directly from investee companies, or by carrying out additional research, cooperating with third party data providers or external experts or making reasonable assumptions.
Engagement policies section
1. In the section ‘Engagement policies’ in Table 1 of Annex I, financial market participants shall provide all of the following information:
(a)
where applicable, brief summaries of the engagement policies referred to in Article 3g of Directive 2007/36/EC of the European Parliament and of the Council ( 14 ) ;
(b)
brief summaries of any other engagement policies to reduce principal adverse impacts.
2. The brief summaries referred to in paragraph 1 shall describe all of the following:
(a)
the indicators for adverse impacts considered in the engagement policies referred to in paragraph 1;
(b)
how those engagement policies will be adapted where there is no reduction of the principal adverse impacts over more than one period reported on.
References to international standards section
1. In the section ‘References to international standards’ in Table 1 of Annex I, financial market participants shall describe whether and to what extent they adhere to responsible business conduct codes and internationally recognised standards for due diligence and reporting and, where relevant, the degree of their alignment with the objectives of the Paris Agreement.
2. The description referred to in paragraph 1 shall contain information about all of the following:
(a)
the indicators used to consider the principal adverse impacts on sustainability factors referred to in Article 6(1) that measure the adherence or alignment referred to in paragraph 1;
(b)
the methodology and data used to measure the adherence or alignment referred to in paragraph 1, including a description of the scope of coverage, data sources, and how the methodology used forecasts the principal adverse impacts of investee companies;
(c)
whether a forward-looking climate scenario is used, and, if so, the name and provider of that scenario and when it was designed;
(d)
where no forward-looking climate scenario is used, an explanation of why the financial market participant does consider forward-looking climate scenarios to be irrelevant.
Historical comparison
Financial market participants that have described the adverse impacts on sustainability factors for a period preceding the period for which information is to be disclosed in accordance with Article 6 shall provide in the section ‘Description of principal adverse impacts on sustainability factors’ in Table 1 of Annex I a historical comparison of the period reported on with the previous period reported on and, subsequently, with every previous period reported on up to the last five previous periods.
SECTION 2 — Financial advisers
Statement by financial advisers that they do consider in their insurance or investment advice principal adverse impacts on sustainability factors
1. The financial advisers referred to in Article 2, point (11), points (a) and (b), of Regulation (EU) 2019/2088 that apply Article 4(5), point (a), of that Regulation shall publish the information referred to in Article 4(5), point (a), of that Regulation in a separate section of their website titled, ‘Statement on principal adverse impacts of insurance advice on sustainability factors’.
2. The financial advisers referred to in Article 2, point (11), points (c) to (f), of Regulation (EU) 2019/2088 and apply Article 4(5), point (a), of that Regulation shall publish the information referred to in Article 4(5), point (a), of that Regulation in a separate section of their websites titled, ‘Statement on principal adverse impacts of investment advice on sustainability factors’.
3. The statement and information referred to in paragraphs 1 and 2 shall contain details on the process used by financial advisers to select the financial products they advise on, including all of the following:
(a)
how the financial advisers use the information published by financial market participants pursuant to this Regulation;
(b)
whether the financial advisers rank and select financial products based on the indicators listed in Table 1 of Annex I and any additional indicators and, where applicable, a description of the ranking and selection methodology used;
(c)
any criteria or thresholds based on the principal adverse impacts listed in Table 1 of Annex I that are used to select, or advise on, financial products.
SECTION 3 — Statement by financial market participants that they do not consider adverse impacts of investment decisions on sustainability factors, and statement by financial advisers that they do not consider adverse impacts of investment decisions on sustainability factors in their investment or insurance advice
Statement by financial market participants that they do not consider adverse impacts of their investments decisions on sustainability factors
1. Financial market participants referred to in Article 4(1), point (b), of Regulation (EU) 2019/2088 shall publish the information referred to in Article 4(1), point (b), of that Regulation in a separate section of their website titled ‘No consideration of adverse impacts of investment decisions on sustainability factors’.
2. The statement referred to in paragraph 1 shall contain all of the following:
(a)
a prominent statement that the financial market participant does not consider any adverse impacts of its investment decisions on sustainability factors;
(b)
the reasons why the financial market participant does not consider any adverse impacts of its investment decisions on sustainability factors and, where relevant, information on whether the financial market participant intends to consider such adverse impacts by reference to the indicators listed in Table 1 of Annex I, and if so, when.
Statement by financial advisers that they do not consider adverse impacts of investment decisions on sustainability factors in their investment or insurance advice
1. The financial advisers referred to in Article 2, point (11), points (a) and (b), of Regulation (EU) 2019/2088 that apply Article 4(5), point (b), of that Regulation shall publish the information referred to in Article 4(5), point (b), of that Regulation in a separate section of their website titled ‘No consideration of adverse impacts of insurance advice on sustainability factors’.
2. The financial advisers referred to in Article 2, point (11), points (c) to (f), of Regulation (EU) 2019/2088 that apply Article 4(5), point (b), of that Regulation shall publish the information referred to in Article 4(5), point (b), of that Regulation in a separate section of their website titled ‘No consideration of adverse impacts of investment advice on sustainability factors’.
3. The statement and information referred to in paragraphs 1 and 2 shall contain all of the following:
(a)
a prominent statement that the financial adviser does not consider any adverse impacts of investment decisions on sustainability factors in its investment or insurance advice;
(b)
the reasons why the financial adviser does not consider any adverse impacts of investment decisions on sustainability factors in its investment or insurance advice and, where relevant, information on whether the financial adviser intends to consider such adverse impacts by reference to the indicators listed in Table 1 of Annex I, and if so, when.
Source: EUR-Lex (Publications Office of the EU), © European Union, reuse permitted under Commission Decision 2011/833/EU.
