Identifying sustainability preferences

The EU has established a regulatory framework to help you take sustainability into account when investing, which is why we collect information about your sustainability preferences.

Sustainability preferences refer to your choice of whether to include investments that consider principal adverse sustainability impacts, sustainable investments under the EU Disclosure Regulation, or investments aligned with the EU Taxonomy. We ask about your sustainability preferences so that we can offer you products and services that match your preferences and objectives, and to comply with sustainable finance regulations.

Our questions are based on EU regulation

The EU Sustainable Finance Disclosure Regulation (SFDR) requires financial market participants to provide information about their financial products if they have sustainability objectives (so-called Article 9 products) or promote sustainable characteristics (so-called Article 8 products). Article 9 products can, in principle, only invest in companies that promote an environmental or social sustainability goal. Article 8 products can invest in companies that promote sustainability objectives but may also advance sustainability in other ways, for example by excluding certain sectors or engaging with the companies they invest in. The proportion of sustainable investments is generally lower in Article 8 products than in Article 9 products.

The manufacturer of a financial product sets the criteria for what is considered sustainable based on the SFDR definition of sustainable investment. This means that comparing products on an equal basis can be challenging. SFDR also includes provisions on so-called Principal Adverse Impacts (PAI), which refer to negative effects of business activities on society and the environment. These can include carbon emissions, harm to biodiversity, or human rights violations.

Under the EU Taxonomy Regulation, companies report which parts of their activities contribute to one of six defined environmental objectives (climate change mitigation, climate change adaptation, sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and control, and protection and restoration of biodiversity and ecosystems). Any activity that contributes to one of these objectives is considered environmentally sustainable, provided it does not significantly harm other objectives. The EU Taxonomy has not yet been fully implemented and currently applies only to certain large public-interest companies with more than 500 employees. Therefore, very few financial products currently report a minimum percentage of environmental sustainability under the EU Taxonomy. In the future, the Corporate Sustainability Reporting Directive will expand the scope of the EU Taxonomy to include smaller listed companies and large family-owned businesses.

The difference between the EU Taxonomy and SFDR

Simply put, the EU Taxonomy sets the standard for environmentally sustainable activities, while SFDR focuses on financial products and how they report their environmental and social sustainability impacts.

Data gaps related to sustainability information

Companies and funds are required to report on their sustainability. However, for now, there is not always sufficient information about the sustainability of all products for us to take into account in asset management or when providing investment advice.