As part of the EU’s Climate Action plan, the Sustainable Finance Disclosures Regulation (SFDR), which was introduced in 2021, is primarily directed at improving and standardising disclosures in product documentation so that investors can understand, compare, and monitor the sustainability characteristics of financial products.
Essentially, the point of SFDR is to help people make better informed investment decisions. This includes helping them take sustainability-related information into account. The EU hopes that SFDR will raise awareness of how funds select companies to invest in and encourage investment in companies that benefit the environment and society, and are well run.
From 1 January 2023 SFDR requires funds to be classified in one of three categories (so called Article 6, Article 8 and Article 9 funds) with varying degrees of “green” credentials. Article 9 funds are the “greenest” as these are funds that have sustainable investment as their objective.
As an investment advisor, Vintage Wealth International Limited is required to decide, and to disclose, whether it considers the adverse impacts of investment decisions on sustainability. Given that the fund classification that is at the core of SFDR is just being implemented, we do not consider that there is currently enough information available in product producers’ literature to compare financial products from a sustainability perspective.
Therefore we do not currently consider the adverse impacts of investment decisions on sustainability
This position will be kept under review and once the product providers we deal with have analysed their investment funds and categorised them as Article 6,8 or 9 funds we expect to incorporate sustainability into our investment process.