02022R1288 — EN — 20.02.2023 — 001.001
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►C2 COMMISSION DELEGATED REGULATION (EU) 2022/1288 of 6 April 2022 supplementing Regulation (EU) 2019/2088 of the European Parliament and of the Council with regard to regulatory technical standards specifying the details of the content and presentation of the information in relation to the principle of ‘do no significant harm’, specifying the content, methodologies and presentation of information in relation to sustainability indicators and adverse sustainability impacts, and the content and presentation of the information in relation to the promotion of environmental or social characteristics and sustainable investment objectives in precontractual documents, on websites and in periodic reports ◄ (OJ L 196 25.7.2022, p. 1) |
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COMMISSION DELEGATED REGULATION (EU) 2023/363 of 31 October 2022 |
L 50 |
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17.2.2023 |
Corrected by:
COMMISSION DELEGATED REGULATION (EU) 2022/1288
of 6 April 2022
supplementing Regulation (EU) 2019/2088 of the European Parliament and of the Council with regard to regulatory technical standards specifying the details of the content and presentation of the information in relation to the principle of ‘do no significant harm’, specifying the content, methodologies and presentation of information in relation to sustainability indicators and adverse sustainability impacts, and the content and presentation of the information in relation to the promotion of environmental or social characteristics and sustainable investment objectives in precontractual documents, on websites and in periodic reports
(Text with EEA relevance)
CHAPTER I
DEFINITIONS AND GENERAL PROVISIONS
Article 1
Definitions
For the purposes of this Regulation, the following definitions apply:
‘financial undertaking’ means an AIFM as defined in Article 4(1), point (b), of Directive 2011/61/EU of the European Parliament and of the Council ( 1 ), a management company as defined in Article 2(1), point (b), of Directive 2009/65/EC of the European Parliament and of the Council ( 2 ), an investment company authorised in accordance with Articles 27, 28 and 29 of Directive 2009/65/EC that has not designated for its management a management company authorised in accordance with Articles 6, 7 and 8 of that Directive, a credit institution as defined in Article 4(1), point (1), of Regulation (EU) No 575/2013 of the European Parliament and of the Council ( 3 ), an investment firm as defined in Article 4(1), point (2), of Regulation (EU) No 575/2013, an insurance undertaking as defined in Article 13, point (1), of Directive 2009/138/EC of the European Parliament and of the Council ( 4 ), a reinsurance undertaking as defined in Article 13, point (4), of Directive 2009/138/EC, or any third country entity that carries out similar activities, is subject to the laws of a third country and is supervised by a third-country supervisory authority;
‘non-financial undertaking’ means an undertaking that is not a financial undertaking as defined in point (1);
‘sovereign exposure’ means an exposure to central governments, central banks and supranational issuers;
‘environmentally sustainable economic activity’ means an economic activity that complies with the requirements laid down in Article 3 of Regulation (EU) 2020/852;
‘transitional economic activity’ means an economic activity that complies with the requirements laid down in Article 10(2) of Regulation (EU) 2020/852;
‘enabling economic activity’ means an economic activity that complies with the requirements laid down in Article 16 of Regulation (EU) 2020/852.
Article 2
General principles for the presentation of information
Article 3
Reference benchmarks with basket indexes
Where an index designated as a reference benchmark is made up of a basket of indexes, financial market participants and financial advisers shall provide the information relating to that index in respect of that basket and of each index in that basket.
CHAPTER II
TRANSPARENCY ABOUT ADVERSE IMPACTS ON SUSTAINABILITY FACTORS
SECTION 1
Financial market participants
Article 4
Statement by financial market participants that they do consider principal adverse impacts of their investment decisions on sustainability factors
Article 5
Summary section
In the summary section in Table 1 of Annex I, financial market participants shall include all of the following:
the name of the financial market participant to which the adverse sustainability impacts statement relates;
the fact that principal adverse impacts on sustainability factors are considered;
the reference period of the statement;
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:
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;
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.
Article 6
Description of the principal adverse impacts of investment decisions on sustainability factors
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:
information on one or more additional climate and other environment-related indicators, as set out in Table 2 of Annex I;
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;
information on any other indicators used to identify and assess additional principal adverse impacts on a sustainability factor.
Article 7
Description of policies to identify and prioritise principal adverse impacts of investment decisions on sustainability factors
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:
the date on which the governing body of the financial market participant approved those policies;
how the responsibility for the implementation of those policies within organisational strategies and procedures is allocated;
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;
any associated margin of error within the methodologies referred to in point (c) of this paragraph, with an explanation of that margin;
the data sources used.
Article 8
Engagement policies section
In the section ‘Engagement policies’ in Table 1 of Annex I, financial market participants shall provide all of the following information:
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 ( 5 );
brief summaries of any other engagement policies to reduce principal adverse impacts.
the indicators for adverse impacts considered in the engagement policies referred to in paragraph 1;
how those engagement policies will be adapted where there is no reduction of the principal adverse impacts over more than one period reported on.
Article 9
References to international standards section
The description referred to in paragraph 1 shall contain information about all of the following:
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;
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;
whether a forward-looking climate scenario is used, and, if so, the name and provider of that scenario and when it was designed;
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.
Article 10
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
Article 11
Statement by financial advisers that they do consider in their insurance or investment advice principal adverse impacts on sustainability factors
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:
how the financial advisers use the information published by financial market participants pursuant to this Regulation;
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;
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
Article 12
Statement by financial market participants that they do not consider adverse impacts of their investments decisions on sustainability factors
The statement referred to in paragraph 1 shall contain all of the following:
a prominent statement that the financial market participant does not consider any adverse impacts of its investment decisions on sustainability factors;
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.
Article 13
Statement by financial advisers that they do not consider adverse impacts of investment decisions on sustainability factors in their investment or insurance advice
The statement and information referred to in paragraphs 1 and 2 shall contain all of the following:
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;
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.
CHAPTER III
PRE-CONTRACTUAL PRODUCT DISCLOSURE
SECTION 1
Promotion of environmental or social characteristics
Article 14
Presentation by financial market participants of the pre-contractual information to be disclosed pursuant to Article 8(1), (2) and (2a) of Regulation (EU) 2019/2088
Financial market participants shall provide at the beginning of the annex to the documents or the information referred to in Article 6(3) of Regulation (EU) 2019/2088 all of the following information:
whether the financial product intends to make any sustainable investments;
whether the financial product promotes environmental or social characteristics, without having as its objective a sustainable investment.
Article 15
Sustainable investment information in the asset allocation section for financial products that promote environmental characteristics
For the financial products referred to in Article 6, first subparagraph, of Regulation (EU) 2020/852, financial market participants shall provide, in the section ‘To what minimum extent are sustainable investments with an environmental objective aligned with the EU Taxonomy?’ in the template set out in Annex II, all of the following:
a graphical representation in the form of a pie chart of:
the degree to which the aggregated investments are investments in environmentally sustainable economic activities, as calculated in accordance with Article 17(1) to (4) of this Regulation;
the degree to which the aggregated investments, excluding sovereign exposures, are investments in environmentally sustainable economic activities, as calculated in accordance with Article 17(5) of this Regulation;
a description of the investments underlying the financial products that are in environmentally sustainable economic activities, including whether the compliance of those investments with the requirements laid down in Article 3 of Regulation (EU) 2020/852 will be subject to an assurance provided by one or more auditors or a review by one or more third parties and, if so, the name or the names of the auditor or third party;
where the financial products invest in economic activities other than environmentally sustainable economic activities, a clear explanation of the reasons for doing so;
where the financial products have sovereign exposures and the financial market participant cannot assess the extent to which those exposures contribute to environmentally sustainable economic activities, a narrative explanation of the proportion in total investments of investments that consist of those exposures.
For the purposes of paragraph 1, point (a), all of the following shall apply:
financial market participants shall use:
the same key performance indicator for the aggregated investments in non-financial undertakings;
the same key performance indicator for the aggregated investments in the same type of financial undertakings;
for insurance and reinsurance undertakings that carry out non-life underwriting activities, the key performance indicator may combine the investment and the underwriting key performance indicators in accordance with Article 6 of Delegated Regulation (EU) 2021/2178;
where the financial products invest in environmentally sustainable economic activities referred to in Sections 4.26, 4.27 and 4.28 of Annexes I and II to Delegated Regulation (EU) 2021/2139, or in environmentally sustainable economic activities referred to in Sections 4.29, 4.30 and 4.31 of those Annexes, the graphical representations shall illustrate separately the proportion of the aggregated investments in:
environmentally sustainable economic activities referred to in Sections 4.26, 4.27 and 4.28 of those Annexes;
environmentally sustainable economic activities referred to in Sections 4.29, 4.30 and 4.31 of those Annexes.
For the purposes paragraph 1, point (b), the description shall include all of the following:
in respect of investee companies that are non-financial undertakings, whether the degree to which the investments are in environmentally sustainable economic activities is measured by turnover, or whether, due to the features of the financial product, the financial market participant has decided that a more representative calculation is given when that degree is measured by capital expenditure or operating expenditure and the reason for that decision, including an explanation of why that decision is appropriate for investors in the financial product;
where information about the degree to which the investments are in environmentally sustainable economic activities is not readily available from public disclosures by investee companies, details of whether the financial market participant obtained equivalent information directly from investee companies or from third party providers;
a breakdown of the minimum proportions of investments in the transitional economic activities and in the enabling economic activities, in each case expressed as a percentage of all investments of the financial product.
Article 16
Sustainable investment information in the asset allocation section for financial products that promote social characteristics
For financial products that promote environmental or social characteristics and that include a commitment in sustainable investments with a social objective, financial market participants shall include in the section ‘What is the asset allocation planned for this financial product?’ in the template set out in Annex II the minimum share of those sustainable investments.
Article 17
Calculation of the degree to which investments are in environmentally sustainable economic activities
The degree to which investments are in environmentally sustainable economic activities shall be calculated in accordance with the following formula:
where ‘investments of the financial product in environmentally sustainable economic activities’ shall be the sum of the market values of the following investments of the financial product:
for debt securities and equities of investee companies, where a proportion of activities of those investee companies is associated with environmentally sustainable economic activities, the market value of that proportion of those debt securities or equities;
for debt securities other than those referred to in point (a), where a proportion of the proceeds is required by the terms of those debt securities to be used exclusively on environmentally sustainable economic activities, the market value of that proportion;
for bonds issued under Union legislation on environmentally sustainable bonds, the market value of those bonds;
for investments in real estate assets which qualify as environmentally sustainable economic activities, the market value of those investments;
for investments in infrastructure assets which qualify as environmentally sustainable economic activities, the market value of those investments;
for investments in securitisation positions as defined in Article 2, point (19), of Regulation (EU) 2017/2402 of the European Parliament and of the Council ( 6 ) with underlying exposures in environmentally sustainable economic activities, the market value of the proportion of those exposures;
for investments in financial products as referred to in Article 5, first paragraph, and Article 6, first paragraph, of Regulation (EU) 2020/852, the market value of the proportion of those financial products representing the degree to which investments are in environmentally sustainable economic activities, as calculated in accordance with this Article.
The degree to which investments are into environmentally sustainable economic activities shall be calculated by applying the methodology used to calculate net short positions laid down in Article 3(4) and (5) of Regulation (EU) No 236/2012 of the European Parliament and of the Council ( 7 ).
For the purposes of paragraph 1, point (a), the proportion of activities of investee companies associated with environmentally sustainable economic activities shall be calculated on the basis of the most appropriate key performance indicators for the investments of the financial product using the following information:
for the investee companies referred to in Article 8(1) and (2) of Regulation (EU) 2020/852, the disclosures made by those investee companies in accordance with that Article;
for other investee companies, equivalent information obtained by the financial market participant directly from investee companies or from third party providers.
SECTION 2
Sustainable investment as objective
Article 18
Presentation by financial market participants of pre-contractual information for financial products to be disclosed pursuant to Article 9, paragraphs 1 to 4a, of Regulation (EU) 2019/2088
Article 19
Sustainable investment information for financial products with the objective of sustainable investment
For the financial products referred to in Article 5, first paragraph, of Regulation (EU) 2020/852, financial market participants shall include in the section ‘What is the asset allocation and the minimum share of sustainable investments?’ in the template set out in Annex III all of the following information:
a graphical representation in the form of a pie chart:
in accordance with Article 15(1), point (a)(i), of this Regulation;
in accordance with Article 15(1), point (a)(ii), of this Regulation;
a description in accordance with Article 15(1), point (b), of this Regulation;
where the financial products invest in economic activities that contribute to an environmental objective and the economic activities are not environmentally sustainable economic activities, a clear explanation of the reasons for doing so;
where the financial products have sovereign exposures and the financial market participant cannot assess the extent to which those exposures contribute to environmentally sustainable economic activities, a narrative explanation of the proportion in total investments of investments that consist of those exposures.
SECTION 3
Financial products with investment options
Article 20
Financial products with one or more underlying investment options that qualify those financial products as financial products that promote environmental or social characteristics
By way of derogation from Articles 14 to 17, where a financial product offers investment options to the investor and one or more of those investment options qualify that financial product as a financial product that promotes environmental or social characteristics, financial market participants shall insert in the main body of the document or information referred to in Article 6(3) of Regulation (EU) 2019/2088 a prominent statement confirming all of the following:
that the financial product promotes environmental or social characteristics;
that those environmental or social characteristics will only be met where the financial product invests in at least one of the investment options mentioned in the list referred to in paragraph 2, point (a), of this Article and that at least one of those options is kept during the holding period of the financial product;
that further information about those characteristics is available in the Annexes referred to in paragraph 3 of this Article or, where relevant, through the references referred to in paragraph 5 of this Article.
The prominent statement referred to in paragraph 1 shall be accompanied by all of the following:
a list of the investment options referred to in paragraph 3, presented in accordance with the categories of investment options referred to in points (a), (b) and (c) of that paragraph;
the proportions of investment options within each of the categories referred to in paragraph 3, points (a), (b) and (c), relative to the total number of investment options offered by the financial product.
Financial market participants shall provide all of the following information in annexes to the document or information referred to in Article 6(3) of Regulation (EU) 2019/2088 for the following categories of investment options:
for each investment option that qualifies as a financial product that promotes environmental or social characteristics, the information referred to in Articles 14 to 17 of this Regulation;
for each investment option that qualifies as a financial product that has sustainable investment as its objective, the information referred to in Articles 18 and 19 of this Regulation;
for each investment option that has sustainable investment as its objective and is not a financial product, information on the objective of sustainable investment.
Article 21
Financial products with underlying investment options that all have sustainable investment as their objective
The prominent statement referred to in paragraph 1 shall be accompanied by all of the following:
a list of the investment options referred to in paragraph 3 presented in accordance with the categories of investment options referred to in points (a) and (b) of that paragraph;
the proportions of each of the categories of investment options referred to in paragraph 3, points (a) and (b), within each of those categories relative to the total number of investment options offered by the financial product.
Financial market participants shall provide all of the following information in annexes to the document or information referred to in Article 6(3) of Regulation (EU) 2019/2088 for the following categories of investment options:
for each investment option that qualifies as a financial product that has sustainable investment as its objective, the information referred to in Articles 18 and 19 of this Regulation;
for each investment option that has sustainable investment as its objective and is not a financial product, the information on the objective of sustainable investment.
Article 22
Information on underlying investment options that have sustainable investment as their objective and are not themselves financial products
The information on the objective of the sustainable investments referred to in Article 20(3), point (c), and Article 21(3), point (b), shall contain all of the following:
a description of the sustainable investment objective;
a list of the indicators used to measure the attainment of that sustainable investment objective;
a description of how the investments do not significantly harm any of the sustainable investment objectives, including all of the following:
how the indicators for adverse impacts in Table 1 of Annex I and any relevant indicators in Tables 2 and 3 of that Annex, are taken into account;
whether the sustainable investment is aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, including the principles and rights set out in the eight fundamental conventions identified in the Declaration of the International Labour Organisation on Fundamental Principles and Rights at Work and the International Bill of Human Rights.
CHAPTER IV
WEBSITE PRODUCT DISCLOSURE
Article 23
Website section for the disclosure of sustainability-related information about financial products
Financial market participants shall, for each financial product, publish the information referred to in Article 10(1) of Regulation (EU) 2019/2088 in a separate section titled, ‘Sustainability-related disclosures’, in the same part of their website as the other information relating to the financial product, including marketing communications. Financial market participants shall clearly identify the financial product to which the information in the sustainability-related disclosure section relates and prominently display the environmental or social characteristics or the sustainable investment objective of that financial product.
SECTION 1
Website product disclosure for financial products that promote environmental or social characteristics
Article 24
Sections of website product disclosure for financial products that promote environmental or social characteristics
For financial products that promote environmental or social characteristics, financial market participants shall publish the information referred to in Article 10(1) of Regulation (EU) 2019/2088 and Articles 25 to 36 of this Regulation in the following order and made up of all of the following sections titled:
‘Summary’;
‘No sustainable investment objective’;
‘Environmental or social characteristics of the financial product’;
‘Investment strategy’;
‘Proportion of investments’;
‘Monitoring of environmental or social characteristics’;
‘Methodologies’;
‘Data sources and processing’;
‘Limitations to methodologies and data’;
‘Due diligence’;
‘Engagement policies’;
where an index is designated as a reference benchmark to attain the environmental or social characteristics promoted by the financial product, ‘Designated reference benchmark’.
Article 25
Website section ‘Summary’ for financial products that promote environmental or social characteristics
The website section ‘Summary’ referred to in Article 24, point (a), shall be provided in at least the following languages:
one of the official languages of the home Member State and, where different and where the financial product is made available in more than one Member State, in an additional language customary in the sphere of international finance;
where the financial product is made available in a host Member State, one of the official languages of that host Member State.
Article 26
Website section ‘No sustainable investment objective’ for financial products that promote environmental or social characteristics
Where the financial product commits to making one or more sustainable investments, financial market participants shall in the website section ‘No sustainable investment objective’ referred to in Article 24, point (b), explain how the sustainable investment does not significantly harm any of the sustainable investment objectives, including all of the following:
how the indicators for adverse impacts in Table 1 of Annex I, and any relevant indicators in Tables 2 and 3 of that Annex I, are taken into account;
whether the sustainable investment is aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, including the principles and rights set out in the eight fundamental conventions identified in the Declaration of the International Labour Organisation on Fundamental Principles and Rights at Work and the International Bill of Human Rights.
Article 27
Website section ‘Environmental or social characteristics of the financial product’ for financial products that promote environmental or social characteristics
In the website section ‘Environmental or social characteristics of the financial product’ referred to in Article 24, point (c), financial market participants shall describe the environmental or social characteristics that the financial products promotes.
Article 28
Website section ‘Investment strategy’ for financial products that promote environmental or social characteristics
In the website section ‘Investment strategy’ referred to in Article 24, point (d), financial market participants shall describe all of the following:
the investment strategy used to meet the environmental or social characteristics promoted by the financial product;
the policy to assess good governance practices of the investee companies, including with respect to sound management structures, employee relations, remuneration of staff and tax compliance.
Article 29
Website section ‘Proportion of investments’ for financial products that promote environmental or social characteristics
In the website section ‘Proportion of investments’ referred to in Article 24, point (e), financial market participants shall insert the information referred to in Article 14 and shall distinguish between direct exposures in investee entities and all other types of exposures to those entities.
Article 30
Website section ‘Monitoring of environmental or social characteristics’ for financial products that promote environmental or social characteristics
In the website section ‘Monitoring of environmental or social characteristics’ referred to in Article 24, point (f), financial market participants shall describe how the environmental or social characteristics promoted by the financial product and the sustainability indicators used to measure the attainment of each of those environmental or social characteristics promoted by the financial product are monitored throughout the lifecycle of the financial product and the related internal or external control mechanisms.
Article 31
Website section ‘Methodologies for environmental or social characteristics’ for financial products that promote environmental or social characteristics
In the website section ‘Methodologies for environmental or social characteristics’ referred to in Article 24, point (g), financial market participants shall describe the methodologies to measure how the social or environmental characteristics promoted by the financial product are met.
Article 32
Website section ‘Data sources and processing’ for financial products that promote environmental or social characteristics
In the website section ‘Data sources and processing’ referred to in Article 24, point (h), financial market participants shall describe all of the following:
the data sources used to attain each of the environmental or social characteristics promoted by the financial product;
the measures taken to ensure data quality;
how data are processed;
the proportion of data that are estimated.
Article 33
Website section ‘Limitations to methodologies and data’ for financial products that promote environmental or social characteristics
In the website section ‘Limitations to methodologies and data’ referred to in Article 24, point (i), financial market participants shall describe all of the following:
any limitations to the methodologies referred to in Article 24, point (g), and to the data sources referred to in Article 24, point (h);
how such limitations do not affect how the environmental or social characteristics promoted by the financial product are met.
Article 34
Website section ‘Due diligence’ for financial products that promote environmental or social characteristics
In the website section ‘Due diligence’ referred to in Article 24, point (j), financial market participants shall describe the due diligence carried out on the underlying assets of the financial product, including the internal and external controls on that due diligence.
Article 35
Website section ‘Engagement policies’ for financial products that promote environmental or social characteristics
In the website section ‘Engagement policies’ referred to in Article 24, point (k), financial market participants shall describe the engagement policies implemented where engagement is part of the environmental or social investment strategy, including any management procedures applicable to sustainability-related controversies in investee companies.
Article 36
Website section ‘Designated reference benchmark’ for financial products that promote environmental or social characteristics
SECTION 2
Website product disclosure for financial products that have sustainable investments as their objective
Article 37
Website product disclosure for financial products that have sustainable investments as their objective
For financial products that have sustainable investments as their objective, financial market participants shall publish the information referred to in Article 10(1) of Regulation (EU) 2019/2088 and Articles 38 to 49 of this Regulation in the following order and made up of all of the following sections titled:
‘Summary’;
‘No significant harm to the sustainable investment objective’;
‘Sustainable investment objective of the financial product’;
‘Investment strategy’;
‘Proportion of investments’;
‘Monitoring of sustainable investment objective’;
‘Methodologies’;
‘Data sources and processing’;
‘Limitations to methodologies and data’;
‘Due diligence’;
‘Engagement policies’;
‘Attainment of the sustainable investment objective’.
Article 38
Website section ‘Summary’ for financial products that have sustainable investment as their objective
The website section ‘Summary’ referred to in Article 37, point (a), shall be provided in at least the following languages:
one of the official languages of the home Member State and, where different and where the financial product is made available in more than one Member State, in an additional language customary in the sphere of international finance;
where the financial product is made available in a host Member State, one of the official languages of that host Member State.
Article 39
Website section ‘No significant harm to the sustainable investment objective’ for financial products that have sustainable investment as their objective
In the website section ‘No significant harm to the sustainable investment objective’ referred to in Article 37, point (b), financial market participants shall explain whether and why the investments of the financial product do not significantly harm any of the sustainable investment objectives, and provide all of the following information:
how the indicators for adverse impacts in Table 1 of Annex I, and any relevant indicators in Tables 2 and 3 of that Annex, are taken into account;
whether the sustainable investment is aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, including the principles and rights set out in the eight fundamental conventions identified in the Declaration of the International Labour Organisation on Fundamental Principles and Rights at Work and the International Bill of Human Rights.
Article 40
Website section ‘Sustainable investment objective of the financial product’ for financial products that have sustainable investment as their objective
In the website section ‘Sustainable investment objective of the financial product’ referred to in Article 37, point (c), financial market participants shall describe the sustainable investment objective of the financial product.
Article 41
Website section ‘Investment strategy’ for financial products that have sustainable investment as their objective
In the website section ‘Investment strategy’ referred to in Article 37, point (d), financial market participants shall describe all of the following:
the investment strategy used to attain the sustainable investment objective;
the policy to assess good governance practices of the investee companies, including with respect to sound management structures, employee relations, remuneration of staff and tax compliance.
Article 42
Website section ‘Proportion of investments’ for financial products that have sustainable investment as their objective
In the website section ‘Proportion of investments’ referred to in Article 37, point (e), financial market participants shall insert the information referred to in the section ‘What is the asset allocation and the minimum share of sustainable investments?’ in the template set out in Annex III to this Regulation and shall distinguish between direct exposures in investee entities and all other types of exposures to those entities.
Article 43
Website section ‘Monitoring of the sustainable investment objective’ for financial products that have sustainable investment as their objective
In the website section ‘Monitoring of the sustainable investment objective’ referred to in Article 37, point (f), financial market participants shall describe how the sustainable investment objective and the sustainability indicators used to measure the attainment of the sustainable investment objective are monitored throughout the lifecycle of the financial product and the related internal or external control mechanisms.
Article 44
Website section ‘Methodologies’ for financial products that have sustainable investment as their objective
In the website section ‘Methodologies’ referred to in Article 37, point (g), financial market participants shall describe the methodologies used to measure the attainment of the sustainable investment objective and how the sustainability indicators to measure the attainment of that sustainable investment objective are used.
Article 45
Website section ‘Data sources and processing’ for financial products that have sustainable investment as their objective
In the website section ‘Data sources and processing’ referred to in Article 37, point (h), financial market participants shall describe all of the following:
the data sources used to attain the sustainable investment objective of the financial product;
the measures taken to ensure data quality;
how data are processed;
the proportion of data that are estimated.
Article 46
Website section ‘Limitation to methodologies and data’ for financial products that have sustainable investment as their objective
In the website section ‘Limitation to methodologies and data’ referred to in Article 37, point (i), financial market participants shall describe all of the following:
any limitations to the methodologies referred to in Article 37, point (g), and the data sources referred to in Article 37, point (h);
why such limitations do not affect the attainment of the sustainable investment objective.
Article 47
Website section ‘Due diligence’ for financial products that have sustainable investment as their objective
In the website section ‘Due diligence’ referred to in Article 37, point (j), financial market participants shall describe the due diligence carried out on the underlying assets of the financial product, including the internal and external controls on that due diligence.
Article 48
Website section ‘Engagement policies’ for financial products that have sustainable investment as their objective
In the website section ‘Engagement policies’ referred to in Article 37, point (k), financial market participants shall describe the engagement policies implemented where engagement is part of the sustainable investment objective, including any management procedures applicable to sustainability-related controversies in investee companies.
Article 49
Website section ‘Attainment of the sustainable investment objective’ for financial products that have sustainable investment as their objective
In the website section ‘Attainment of the sustainable investment objective’ referred to in Article 37, point (l), financial market participants shall describe all of the following:
for financial products that have sustainable investment as their objective and for which an index has been designated as a reference benchmark, how that index is aligned with the sustainable investment objective of the financial product, including the input data, the methodologies used to select those data, the rebalancing methodologies and how the index is calculated;
for financial products that have a reduction in carbon emissions as their objective, a statement that the reference benchmark qualifies as an EU Climate Transition Benchmark or an EU Paris-aligned Benchmark as defined in Article 3, points (23a) and (23b), of Regulation (EU) 2016/1011, and a hyperlink to where the methodology used for the calculation of those benchmarks can be found.
CHAPTER V
PRODUCT DISCLOSURE IN PERIODIC REPORTS
SECTION 1
Promotion of environmental or social characteristics
Article 50
Presentation and content requirements for periodic reports for financial products that promote environmental or social characteristics
Article 51
Attainment of the environmental or social characteristics promoted by the financial products
In the section ‘To what extent were the environmental and/or social characteristics promoted by this financial product met?’ in the template set out in Annex IV to this Regulation, financial market participants shall provide all of the following information:
the extent to which the environmental or social characteristics promoted by the financial product were met during the period covered by the periodic report, including the performance of the sustainability indicators used to measure how each of those environmental or social characteristics are met and which derivatives, if any, have been used to meet those environmental or social characteristics;
for the financial products referred to in Article 6, first paragraph, of Regulation (EU) 2020/852, an identification of the environmental objectives set out in Article 9 of that Regulation to which the sustainable investment underlying the financial product contributed;
where the financial market participant has provided at least one previous periodic report in accordance with this Section for the financial product, a historical comparison between the period covered by the periodic report and periods covered by previous periodic reports;
for financial products that included a commitment to make sustainable investments, an explanation of how those investments have contributed to the sustainable investment objectives referred to in Article 2, point (17), of Regulation (EU) 2019/2088 and have not harmed significantly any of those objectives during the period covered by the periodic report, including all of the following:
how the indicators for adverse impacts in Table 1 of Annex I, and any relevant indicators in Tables 2 and 3 of that Annex, were taken into account;
whether the sustainable investment was aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, including the principles and rights set out in the eight fundamental conventions identified in the Declaration of the International Labour Organisation on Fundamental Principles and Rights at Work and the International Bill of Human Rights;
information on principal adverse impacts on sustainability factors as referred to in the section ‘Does this financial product consider principal adverse impacts on sustainability factors?’ in the template set out in Annex II to this Regulation.
Article 52
Top investments for financial products that promote environmental or social characteristics
Article 53
Asset allocation by financial products that promote environmental or social characteristics
In the section ‘What was the asset allocation?’ in the template set out in Annex IV to this Regulation, financial market participants shall provide a description of the investments of the financial product, including all of the following:
the proportions of the investments of the financial product that attained the promoted environmental or social characteristics during the period covered by the periodic report;
the purpose of the remainder of the investments during the period covered by the periodic report, including a description of any minimum environmental or social safeguards and whether those investments are used for hedging, relate to cash held as ancillary liquidity or are investments for which there are insufficient data.
Article 54
Proportion of investments in different economic sectors and sub-sectors
In the section ‘In which economic sectors were the investments made?’ in the template set out in Annex IV to this Regulation, financial market participants shall provide information on the proportion of investments during the period covered by the periodic report in different sectors and sub-sectors, including sectors and sub-sectors of the economy that derive revenues from exploration, mining, extraction, production, processing, storage, refining or distribution, including transportation, storage and trade, of fossil fuels as defined in Article 2, point (62), of Regulation (EU) 2018/1999 of the European Parliament and of the Council ( 8 ).
Article 55
Information on investments in environmentally sustainable economic activities for financial products that promote environmental characteristics
►M1 For financial products referred to in Article 6, first paragraph, of Regulation (EU) 2020/852, financial market participants shall include in the section ‘What was the proportion of sustainability-related investments?’ in the template set out in Annex IV all of the following information: ◄
a breakdown of the proportion of the investments per each of the environmental objectives set out in Article 9 of Regulation (EU) 2020/852 to which those investments contributed;
a description of the investments in environmentally sustainable economic activities during the period covered by the periodic report, including:
whether the compliance of those investments with the requirements laid down in Article 3 of Regulation (EU) 2020/852 was subject to an assurance provided by one or more auditors or a review by one or more third parties and, if so, the name or the names of the auditor or third party;
a graphical representation in the form of a bar chart of the aggregated investments in environmentally sustainable economic activities during the period covered by the periodic report, calculated in accordance with Article 17(1) to (4);
a graphical representation in the form of a bar chart of the degree to which the aggregated investments are in environmentally sustainable economic activities during the period covered by the periodic report, but excluding sovereign exposures, and calculated in accordance with Article 17(5);
the information referred to in Article 15(3), point (b);
a breakdown of the proportions of investments, during the period covered by the periodic report, in the transitional economic activities and in the enabling economic activities, in each case expressed as a percentage of all investments of the financial product;
where the financial product invested in sustainable investments with an environmental objective, but which are not environmentally sustainable economic activities, a clear explanation of the reasons for doing so;
where the financial market participant has provided at least one previous periodic report in accordance with this Section for the financial product, a historical comparison of the degree to which the investments were made in environmentally sustainable economic activities during the period covered by the periodic report and during previous periods;
where the financial market participant could not assess the extent to which sovereign exposures contributed to environmentally sustainable economic activities during the period covered by the periodic report, a narrative explanation of the reasons and the size of those exposures in total investments.
For the purposes of paragraph 1, point (b), points (ii) and (iii), all of the following shall apply:
when aggregating the investments in non-financial undertakings, the turnover, capital expenditure and operational expenditure shall be calculated and included in the graphical representation;
when aggregating the investments in financial undertakings, the turnover and capital expenditure shall, where applicable, be calculated and included in the graphical representation;
for insurance undertakings and reinsurance undertakings that carry out non-life underwriting activities, the key performance indicator may be a combination of the investment and the underwriting key performance indicators in accordance Article 6 of Delegated Regulation (EU) 2021/2178;
where the financial products made investments during the period covered by the periodic report in environmentally sustainable economic activities referred to in Sections 4.26, 4.27 and 4.28 of Annexes I and II to Delegated Regulation (EU) 2021/2139 or in environmentally sustainable economic activities referred to in Sections 4.29, 4.30 and 4.31 of those Annexes, a graphical representation shall illustrate separately:
the aggregate of the environmentally sustainable economic activities referred to in Sections 4.26, 4.27 and 4.28 of those Annexes;
the aggregate of the environmentally sustainable economic activities referred to in Sections 4.29, 4.30 and 4.31 of those Annexes.
Article 56
Information for financial products that promote social characteristics
For financial products that promote environmental or social characteristics that included a commitment in sustainable investments with a social objective, the section ‘What was the proportion of sustainability-related investments?’ in the template set out in Annex IV shall contain the share of those sustainable investments.
Article 57
Sustainable performance of the index designated as a benchmark for environmental or social characteristics
In the section ‘How did this financial product perform compared to the designated reference benchmark?’ in the template set out in Annex IV to this Regulation, financial market participants shall, for financial products that promote environmental or social characteristics, provide all of the following information:
an explanation of how the index designated as a reference benchmark differs from a relevant broad market index, including the performance, during the period covered by the periodic report, of the sustainability indicators deemed relevant by the financial market participant to determine the alignment of the index with the environmental or social characteristics promoted by the financial product and the ESG factors referred to in the benchmark statement published by the benchmark administrator in accordance with Article 27(1) of Regulation (EU) 2016/1011;
a comparison between the performance of the financial product and the indicators measuring the sustainability factors of the index referred to in point (a) during the period covered by the periodic report;
a comparison between the performance of the financial product and a relevant broad market index during the period covered by the periodic report.
SECTION 2
Sustainable investment as objective
Article 58
Presentation and content requirements for periodic reports for financial products that have sustainable investment as their objective
For financial products that have sustainable investment as their objective, financial market participants shall present the information referred to in Article 11(1) of Regulation (EU) 2019/2088 in an annex to the document or information referred to in Article 11(2) of that Regulation in the form of the template set out in Annex V to this Regulation. Financial market participants shall include in the main body of the document or information referred to in Article 11(2) of Regulation (EU) 2019/2088 a prominent statement that information on sustainable investment is available in that Annex.
Article 59
Attainment of the sustainable investment objective of the financial product
In the section ‘To what extent was the sustainable investment objective of this financial product met?’ in the template set out in Annex V, financial market participants shall provide all of the following information:
the extent to which the sustainable investment objective was attained during the period covered by the periodic report, including the performance of:
the sustainability indicators referred to in the subsection ‘What sustainability indicators are used to measure the attainment of the sustainable investment objective of this financial product?’ of the section ‘What is the sustainable investment objective of this financial product?’ in the template set out in Annex III to this Regulation;
any derivatives referred to in the subsection ‘How does the use of derivatives attain the sustainable investment objective?’ of the section ‘What is the asset allocation and the minimum share of sustainable investments?’ in the template set out in Annex III to this Regulation used to attain the sustainable investment objective;
for the financial products referred to in Article 5, first paragraph, of Regulation (EU) 2020/852, an identification of the environmental objectives set out in Article 9 of that Regulation to which the sustainable investment underlying the financial product contributed;
for the financial products referred to in Article 9(3) of Regulation (EU) 2019/2088, information on how the objective of a reduction in carbon emissions was aligned with the Paris Agreement, containing a description of the contribution of the financial product during the period covered by the periodic report to achieve the objectives of the Paris Agreement, including in respect of an EU Climate Transition Benchmark or EU Paris-aligned Benchmark, the ESG factors and criteria considered by the benchmark administrator in accordance with Delegated Regulation (EU) 2020/1818;
where the financial market participants have provided at least one previous periodic report in accordance with this Section for the financial product, a historical comparison between the current period covered by the periodic report and previous periods;
an explanation of how the sustainable investments have contributed to a sustainable investment objective and have not harmed significantly any of the sustainable investment objectives during the period covered by the periodic report, including all of the following:
how the indicators for adverse impacts in Table 1 of Annex I, and any relevant indicators in Tables 2 and 3 of that Annex, were taken into account;
whether the sustainable investment was aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, including the principles and rights set out in the eight fundamental conventions identified in the Declaration of the International Labour Organisation on Fundamental Principles and Rights at Work and the International Bill of Human Rights;
information on principal adverse impacts on sustainability factors as referred to in in the section ‘Does this financial product consider principal adverse impacts on sustainability factors?’ in the template set out in Annex III to this Regulation.
Article 60
Top investments for financial products that have sustainable investment as their objective
Article 61
Proportion of sustainability-related investments for financial products that have sustainable investment as their objective
In the section ‘What was the proportion of sustainability-related investments?’ in the template set out in Annex V, financial market participants shall provide all of the following information:
the proportions of the investments of the financial product that contributed to the sustainable investment objective;
the purpose of the remainder of the investments during the period covered by the periodic report, including a description of any minimum environmental or social safeguards and whether those investments are used for hedging or relate to cash held as ancillary liquidity;
the proportion of investments during the period covered by the periodic report in different sectors and sub-sectors.
Article 62
Information on sustainable investments for financial products with the objective of sustainable investment
For the financial products referred to in Article 5, first paragraph, of Regulation (EU) 2020/852, the section ‘What was the proportion of sustainability-related investments?’ in the template set out in Annex V shall contain all of the following information:
a breakdown in accordance with Article 55(1), point (a);
a description of the sustainable investments in environmentally sustainable economic activities during the period covered by the periodic report, including:
the information in accordance with Article 55(1), point (b)(i);
a graphical representation in the form of a bar chart in accordance with Article 55(1), point (b)(ii);
a graphical representation in the form of a bar chart in accordance with Article 55(1), point (b)(iii);
the information referred to in Article 15(3), point (b);
a breakdown in accordance with Article 55(1), point (b)(v);
where the financial product invested in sustainable investments with an environmental objective but that are not environmentally sustainable economic activities, a clear explanation of the reasons for doing so;
where the financial market participant has provided at least one previous periodic report in accordance with this Section for the financial product, a historical comparison of the degree to which the investments were made in environmentally sustainable economic activities during the period covered by the periodic report and during previous periods;
a narrative explanation in accordance with Article 55(1), point (b)(viii);
for financial products having sustainable investments with a social objective, the section ‘What was the share of socially sustainable investments during the period covered by the periodic report’ in the template set out in Annex V shall also contain the share of those sustainable investments.
Article 63
Sustainable performance of the index designated as a benchmark for the sustainable objective
In the section ‘How did this financial product perform compared to the reference sustainable benchmark?’ in the template set out in Annex V, financial market participants shall, for financial products that have sustainable investment as their objective and for which an index has been designated as a reference benchmark, provide all of the following information:
an explanation of how the index designated as a reference benchmark differs from a relevant broad market index, including at least the performance during the period covered by the periodic report of the sustainability indicators deemed relevant by the financial market participant to determine the alignment of the index with the sustainable investment objective, including the ESG factors referred to in the benchmark statement published by the benchmark administrator in accordance with Article 27(2a) of Regulation (EU) 2016/1011;
a comparison between the performance of the financial product and the indicators measuring the sustainability factors of the index referred to in point (a) during the period covered by the periodic report;
a comparison between the performance of the financial product and a relevant broad market index during the period covered by the periodic report.
SECTION 3
Historical comparisons for periodic reports
Article 64
Historical comparisons for periodic reports
For the purposes of the historical comparisons referred to in Article 51, point (c), and Article 59, point (d), financial market participants shall report on the performance of the sustainability indicators consistently over time, and shall provide all of the following information:
where quantitative disclosures are made, figures with a relative measure such as impact per euro invested;
which indicators are subject to an assurance provided by an auditor or a review by a third party;
the proportion of underlying assets of the financial product referred to in the section ‘What was the proportion of sustainability-related investments?’ in the template set out in Annex IV to this Regulation and in the section ‘What was the proportion of sustainability-related investments?’ in the template set out in Annex V.
SECTION 4
Financial products with investment options
Article 65
Financial products with one or more underlying investment options that qualify those financial products as financial products that promote environmental or social characteristics
By way of derogation from Articles 50 to 57, where a financial product offers investment options to the investor and one or more of those investment options qualify that financial product as a financial product that promotes environmental or social characteristics, financial market participants shall insert in the main body of the document or information referred to in Article 11(2) of Regulation (EU) 2019/2088 a prominent statement confirming all of the following:
that the financial product promotes environmental or social characteristics;
that the attainment of those characteristics is subject to investing in at least one of the investment options referred to in paragraph 2 of this Article and holding at least one of those options during the holding period of the financial product;
that further information related to those environmental or social characteristics is available in the annexes referred to in paragraph 2 of this Article.
Financial market participants shall provide all of the following information in annexes to the document or information referred to in Article 11(2) of Regulation (EU) 2019/2088:
for each investment option invested in that qualifies as a financial product that promotes environmental or social characteristics, the information referred to in Articles 50 to 57 of this Regulation;
for each investment option invested in that qualifies as a financial product that has sustainable investment as its objective, the information referred to in Articles 58 to 63 of this Regulation;
for each investment option invested in that has sustainable investment as its objective and is not a financial product, the information on the objective of sustainable investment.
Article 66
Financial products with underlying investment options that all have sustainable investment as their objectives
Financial market participants shall provide all of the following information in the annexes to the document or information referred to in Article 11(2) of Regulation (EU) 2019/2088:
for each investment option invested in that qualifies as a financial product that has sustainable investment as its objective, the information referred to in Articles 58 to 63;
for each investment option invested in that has sustainable investment as its objective and is not a financial product, the information on the objective of the sustainable investment.
Article 67
Information on underlying investment options that have sustainable investment as their objective and are not themselves financial products
The information on the objective of the sustainable investment referred to in Article 65(2), point (c), and Article 66(2), point (b), shall contain all of the following:
a description of the sustainable investment objective;
the extent to which the sustainable investment objective was attained during the period covered by the periodic report, including the performance of the sustainability indicators used to measure the overall sustainable impacts of the options that have sustainable investment as their objective;
a description of how the investments do not significantly harm any of the sustainable investment objectives, including all of the following:
how the indicators for adverse impacts in Table 1 of Annex I and any relevant indicators in Tables 2 and 3 of that Annex, are taken into account;
whether the sustainable investment is aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, including the principles and rights set out in the eight fundamental conventions identified in the Declaration of the International Labour Organisation on Fundamental Principles and Rights at Work and the International Bill of Human Rights.
CHAPTER VI
FINAL PROVISIONS
Article 68
Entry into force and application
This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.
This Regulation shall apply from 1 January 2023.
This Regulation shall be binding in its entirety and directly applicable in all Member States.
ANNEX I
Template principal adverse sustainability impacts statement
For the purposes of this Annex, the following definitions shall apply:
‘scope 1, 2 and 3 GHG emissions’ means the scope of greenhouse gas emissions referred to in points (1)(e)(i) to (iii) of Annex III to Regulation (EU) 2016/1011 of the European Parliament and of the Council ( 9 );
‘greenhouse gas (GHG) emissions’ means greenhouse gas emissions as defined in Article 3, point (1), of Regulation (EU) 2018/842 of the European Parliament and of the Council ( 10 );
‘weighted average’ means a ratio of the weight of the investment by the financial market participant in an investee company in relation to the enterprise value of the investee company;
‘enterprise value’ means the sum, at fiscal year-end, of the market capitalisation of ordinary shares, the market capitalisation of preferred shares, and the book value of total debt and non-controlling interests, without the deduction of cash or cash equivalents;
‘companies active in the fossil fuel sector’ means companies that derive any revenues from exploration, mining, extraction, production, processing, storage, refining or distribution, including transportation, storage and trade, of fossil fuels as defined in Article 2, point (62), of Regulation (EU) 2018/1999 of the European Parliament and of the Council ( 11 );
‘renewable energy sources’ means renewable non-fossil sources, namely wind, solar (solar thermal and solar photovoltaic) and geothermal energy, ambient energy, tide, wave and other ocean energy, hydropower, biomass, landfill gas, sewage treatment plant gas, and biogas;
‘non-renewable energy sources’ means energy sources other than those referred to in point (6);
‘energy consumption intensity’ means the ratio of energy consumption per unit of activity, output or any other metric of the investee company to the total energy consumption of that investee company;
‘high impact climate sectors’ means the sectors listed in Sections A to H and Section L of Annex I to Regulation (EC) No 1893/2006 of the European Parliament and of the Council ( 12 );
‘protected area’ means designated areas in the European Environment Agency’s Common Database on Designated Areas (CDDA);
‘area of high biodiversity value outside protected areas’ means land with high biodiversity value as referred to in Article 7b(3) of Directive 98/70/EC of the European Parliament and of the Council ( 13 );
‘emissions to water’ means direct emissions of priority substances as defined in Article 2(30) of Directive 2000/60/EC of the European Parliament and of the Council ( 14 ) and direct emissions of nitrates, phosphates and pesticides;
‘areas of high water stress’ means regions where the percentage of total water withdrawn is high (40-80 %) or extremely high (greater than 80 %) in the World Resources Institute’s (WRI) Water Risk Atlas tool ‘Aqueduct’;
‘hazardous waste and radioactive waste’ means hazardous waste and radioactive waste;
‘hazardous waste’ means hazardous waste as defined in Article 3(2) of Directive 2008/98/EC of the European Parliament and of the Council ( 15 );
‘radioactive waste’ means radioactive waste as defined in Article 3(7) of Council Directive 2011/70/Euratom ( 16 );
‘non-recycled waste’ means any waste not recycled within the meaning of ‘recycling’ in Article 3(17) of Directive 2008/98/EC;
‘activities negatively affecting biodiversity-sensitive areas’ means activities that are characterised by all of the following:
those activities lead to the deterioration of natural habitats and the habitats of species and disturb the species for which a protected area has been designated;
for those activities, none of the conclusions, mitigation measures or impact assessments adopted pursuant to any of the following Directives or national provisions or international standards that are equivalent to those Directives have been implemented:
Directive 2009/147/EC of the European Parliament and of the Council ( 17 );
Council Directive 92/43/EEC ( 18 );
an Environmental Impact Assessment (EIA) as defined in Article 1(2), point (g), of Directive 2011/92/EU of the European Parliament and of the Council ( 19 );
for activities located in third countries, conclusions, mitigation measures or impact assessments adopted in accordance with national provisions or international standards that are equivalent to the Directives and impact assessments listed in points (i), (ii) and (iii);
‘biodiversity-sensitive areas’ means Natura 2000 network of protected areas, Unesco World Heritage sites and Key Biodiversity Areas (‘KBAs’), as well as other protected areas, as referred to in Appendix D of Annex II to Commission Delegated Regulation (EU) 2021/2139 ( 20 );
‘threatened species’ means endangered species, including flora and fauna, listed in the European Red List or the IUCN Red List, as referred to in Section 7 of Annex II to Delegated Regulation (EU) 2021/2139;
‘deforestation’ means the temporary or permanent human-induced conversion of forested land to non-forested land;
‘UN Global Compact principles’ means the ten Principles of the United Nations Global Compact;
‘unadjusted gender pay gap’ means the difference between average gross hourly earnings of male paid employees and of female paid employees as a percentage of average gross hourly earnings of male paid employees;
‘board’ means the administrative, management or supervisory body of a company;
‘human rights policy’ means a policy commitment approved at board level on human rights that the economic activities of the investee company shall be in line with the UN Guiding Principles on Business and Human Rights;
‘whistleblower’ means ‘reporting person’ as defined in Article 5(7) of Directive (EU) 2019/1937 of the European Parliament and of the Council ( 21 );
‘inorganic pollutants’ means emissions within or lower than the emission levels associated with the best available techniques (BAT-AEL) as defined in Article 3, point (13) of Directive 2010/75/EU of the European Parliament and of the Council ( 22 ), for the Large Volume Inorganic Chemicals- Solids and Others industry;
‘air pollutants’ means direct emissions of sulphur dioxides (SO2), nitrogen oxides (NOx), non-methane volatile organic compounds (NMVOC), and fine particulate matter (PM2,5) as defined in Article 3, points (5) to (8), of Directive (EU) 2016/2284 of the European Parliament and of the Council ( 23 ), ammonia (NH3) as referred to in that Directive and heavy metals (HM) as referred to in Annex I to that Directive;
‘ozone depletion substances’ mean substances listed in the Montreal Protocol on Substances that Deplete the Ozone Layer.
For the purposes of this Annex, the following formulas shall apply:
‘GHG emissions’ shall be calculated in accordance with the following formula:
‘carbon footprint’ shall be calculated in accordance with the following formula:
‘GHG intensity of investee companies’ shall be calculated in accordance with the following formula:
‘GHG intensity of sovereigns’ shall be calculated in accordance with the following formula:
‘inefficient real estate assets’ shall be calculated in accordance with the following formula:
For the purposes of the formulas, the following definitions shall apply:
‘current value of investment’ means the value in EUR of the investment by the financial market participant in the investee company;
‘enterprise value’ means the sum, at fiscal year-end, of the market capitalisation of ordinary shares, the market capitalisation of preferred shares, and the book value of total debt and non-controlling interests, without the deduction of cash or cash equivalents;
‘current value of all investments’ means the value in EUR of all investments by the financial market participant;
‘nearly zero-energy building (NZEB)’, ‘primary energy demand (PED)’ and ‘energy performance certificate (EPC)’ shall have the meanings given to them in paragraphs 2, 5 and 12 of Article 2 of Directive 2010/31/EU of the European Parliament and of the Council ( 24 ).
Table 1
Statement on principal adverse impacts of investment decisions on sustainability factors
Financial market participant [Name and, where available, LEI] |
||||||
Summary [Name and, where available, LEI] considers principal adverse impacts of its investment decisions on sustainability factors. The present statement is the consolidated statement on principal adverse impacts on sustainability factors of [name of the financial market participant] [where applicable, insert ‘and its subsidiaries, namely [list the subsidiaries included]’]. This statement on principal adverse impacts on sustainability factors covers the reference period from [insert‘1 January’or the date on which principal adverse impacts were first considered] to 31 December [year n]. [Summary referred to in Article 5 provided in the languages referred to in paragraph 1 thereof] |
||||||
Description of the principal adverse impacts on sustainability factors [Information referred to in Article 7 in the format set out below] |
||||||
Indicators applicable to investments in investee companies |
||||||
Adverse sustainability indicator |
Metric |
Impact [year n] |
Impact [year n-1] |
Explanation |
Actions taken, and actions planned and targets set for the next reference period |
|
CLIMATE AND OTHER ENVIRONMENT-RELATED INDICATORS |
||||||
Greenhouse gas emissions |
1. GHG emissions |
Scope 1 GHG emissions |
|
|
|
|
|
Scope 2 GHG emissions |
|
|
|
|
|
|
Scope 3 GHG emissions |
|
|
|
|
|
|
Total GHG emissions |
|
|
|
|
|
2. Carbon footprint |
Carbon footprint |
|
|
|
|
|
3. GHG intensity of investee companies |
GHG intensity of investee companies |
|
|
|
|
|
4. Exposure to companies active in the fossil fuel sector |
Share of investments in companies active in the fossil fuel sector |
|
|
|
|
|
5. Share of non-renewable energy consumption and production |
Share of non-renewable energy consumption and non-renewable energy production of investee companies from non-renewable energy sources compared to renewable energy sources, expressed as a percentage of total energy sources |
|
|
|
|
|
6. Energy consumption intensity per high impact climate sector |
Energy consumption in GWh per million EUR of revenue of investee companies, per high impact climate sector |
|
|
|
|
|
Biodiversity |
7. Activities negatively affecting biodiversity-sensitive areas |
Share of investments in investee companies with sites/operations located in or near to biodiversity-sensitive areas where activities of those investee companies negatively affect those areas |
|
|
|
|
Water |
8. Emissions to water |
Tonnes of emissions to water generated by investee companies per million EUR invested, expressed as a weighted average |
|
|
|
|
Waste |
9. Hazardous waste and radioactive waste ratio |
Tonnes of hazardous waste and radioactive waste generated by investee companies per million EUR invested, expressed as a weighted average |
|
|
|
|
INDICATORS FOR SOCIAL AND EMPLOYEE, RESPECT FOR HUMAN RIGHTS, ANTI-CORRUPTION AND ANTI-BRIBERY MATTERS |
||||||
Social and employee matters |
10. Violations of UN Global Compact principles and Organisation for Economic Cooperation and Development (OECD) Guidelines for Multinational Enterprises |
Share of investments in investee companies that have been involved in violations of the UNGC principles or OECD Guidelines for Multinational Enterprises |
|
|
|
|
11. Lack of processes and compliance mechanisms to monitor compliance with UN Global Compact principles and OECD Guidelines for Multinational Enterprises |
Share of investments in investee companies without policies to monitor compliance with the UNGC principles or OECD Guidelines for Multinational Enterprises or grievance/complaints handling mechanisms to address violations of the UNGC principles or OECD Guidelines for Multinational Enterprises |
|
|
|
|
|
12. Unadjusted gender pay gap |
Average unadjusted gender pay gap of investee companies |
|
|
|
|
|
13. Board gender diversity |
Average ratio of female to male board members in investee companies, expressed as a percentage of all board members |
|
|
|
|
|
14. Exposure to controversial weapons (anti-personnel mines, cluster munitions, chemical weapons and biological weapons) |
Share of investments in investee companies involved in the manufacture or selling of controversial weapons |
|
|
|
|
|
Indicators applicable to investments in sovereigns and supranationals |
||||||
Adverse sustainability indicator |
Metric |
Impact [year n] |
Impact [year n-1] |
Explanation |
Actions taken, and actions planned and targets set for the next reference period |
|
Environmental |
15. GHG intensity |
GHG intensity of investee countries |
|
|
|
|
Social |
16. Investee countries subject to social violations |
Number of investee countries subject to social violations (absolute number and relative number divided by all investee countries), as referred to in international treaties and conventions, United Nations principles and, where applicable, national law |
|
|
|
|
Indicators applicable to investments in real estate assets |
||||||
Adverse sustainability indicator |
Metric |
Impact [year n] |
Impact [year n-1] |
Explanation |
Actions taken, and actions planned and targets set for the next reference period |
|
Fossil fuels |
17. Exposure to fossil fuels through real estate assets |
Share of investments in real estate assets involved in the extraction, storage, transport or manufacture of fossil fuels |
|
|
|
|
Energy efficiency |
18. Exposure to energy-inefficient real estate assets |
Share of investments in energy-inefficient real estate assets |
|
|
|
|
Other indicators for principal adverse impacts on sustainability factors |
||||||
[Information on the principal adverse impacts on sustainability factors referred to in Article 6(1), point (a) in the format in Table 2] |
||||||
[Information on the principal adverse impacts on sustainability factors referred to in Article 6(1), point (b), in the format in Table 3] |
||||||
[Information on any other adverse impacts on sustainability factors used to identify and assess additional principal adverse impacts on a sustainability factor referred to in Article 6(1), point (c), in the format in Table 2 or Table 3] |
||||||
Description of policies to identify and prioritise principal adverse impacts on sustainability factors [Information referred to in Article 7] |
||||||
Engagement policies [Information referred to in Article 8] |
||||||
References to international standards [Information referred to in Article 9] |
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Historical comparison [Information referred to in Article 10] |
Table 2
Additional climate and other environment-related indicators
Adverse sustainability impact |
Adverse impact on sustainability factors (qualitative or quantitative) |
Metric |
Indicators applicable to investments in investee companies |
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CLIMATE AND OTHER ENVIRONMENT-RELATED INDICATORS |
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Emissions |
1. Emissions of inorganic pollutants |
Tonnes of inorganic pollutants equivalent per million EUR invested, expressed as a weighted average |
2. Emissions of air pollutants |
Tonnes of air pollutants equivalent per million EUR invested, expressed as a weighted average |
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3. Emissions of ozone-depleting substances |
Tonnes of ozone-depleting substances equivalent per million EUR invested, expressed as a weighted average |
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4. Investments in companies without carbon emission reduction initiatives |
Share of investments in investee companies without carbon emission reduction initiatives aimed at aligning with the Paris Agreement |
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Energy performance |
5. Breakdown of energy consumption by type of non-renewable sources of energy |
Share of energy from non-renewable sources used by investee companies broken down by each non-renewable energy source |
Water, waste and material emissions |
6. Water usage and recycling |
1. Average amount of water consumed by the investee companies (in cubic meters) per million EUR of revenue of investee companies 2. Weighted average percentage of water recycled and reused by investee companies |
7. Investments in companies without water management policies |
Share of investments in investee companies without water management policies |
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8. Exposure to areas of high water stress |
Share of investments in investee companies with sites located in areas of high water stress without a water management policy |
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9. Investments in companies producing chemicals |
Share of investments in investee companies the activities of which fall under Division 20.2 of Annex I to Regulation (EC) No 1893/2006 |
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10. Land degradation, desertification, soil sealing |
Share of investments in investee companies the activities of which cause land degradation, desertification or soil sealing |
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11. Investments in companies without sustainable land/agriculture practices |
Share of investments in investee companies without sustainable land/agriculture practices or policies |
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12. Investments in companies without sustainable oceans/seas practices |
Share of investments in investee companies without sustainable oceans/seas practices or policies |
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13. Non-recycled waste ratio |
Tonnes of non-recycled waste generated by investee companies per million EUR invested, expressed as a weighted average |
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14. Natural species and protected areas |
1. Share of investments in investee companies whose operations affect threatened species 2. Share of investments in investee companies without a biodiversity protection policy covering operational sites owned, leased, managed in, or adjacent to, a protected area or an area of high biodiversity value outside protected areas |
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15. Deforestation |
Share of investments in companies without a policy to address deforestation |
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Green securities |
16. Share of securities not issued under Union legislation on environmentally sustainable bonds |
Share of securities in investments not issued under Union legislation on environmentally sustainable bonds |
Indicators applicable to investments in sovereigns and supranationals |
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Green securities |
17. Share of bonds not issued under Union legislation on environmentally sustainable bonds |
Share of bonds not issued under Union legislation on environmentally sustainable bonds |
Indicators applicable to investments in real estate assets |
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Greenhouse gas emissions |
18. GHG emissions |
Scope 1 GHG emissions generated by real estate assets |
Scope 2 GHG emissions generated by real estate assets |
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Scope 3 GHG emissions generated by real estate assets |
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Total GHG emissions generated by real estate assets |
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Energy consumption |
19. Energy consumption intensity |
Energy consumption in GWh of owned real estate assets per square meter |
Waste |
20. Waste production in operations |
Share of real estate assets not equipped with facilities for waste sorting and not covered by a waste recovery or recycling contract |
Resource consumption |
21. Raw materials consumption for new construction and major renovations |
Share of raw building materials (excluding recovered, recycled and biosourced) compared to the total weight of building materials used in new construction and major renovations |
Biodiversity |
22. Land artificialisation |
Share of non-vegetated surface area (surfaces that have not been vegetated in ground, as well as on roofs, terraces and walls) compared to the total surface area of the plots of all assets |
Table 3
Additional indicators for social and employee, respect for human rights, anti-corruption and anti-bribery matters
INDICATORS FOR SOCIAL AND EMPLOYEE, RESPECT FOR HUMAN RIGHTS, ANTI-CORRUPTION AND ANTI-BRIBERY MATTERS |
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Adverse sustainability impact |
Adverse impact on sustainability factors (qualitative or quantitative) |
Metric |
Indicators applicable to investments in investee companies |
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Social and employee matters |
1. Investments in companies without workplace accident prevention policies |
Share of investments in investee companies without a workplace accident prevention policy |
2. Rate of accidents |
Rate of accidents in investee companies expressed as a weighted average |
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3. Number of days lost to injuries, accidents, fatalities or illness |
Number of workdays lost to injuries, accidents, fatalities or illness of investee companies expressed as a weighted average |
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4. Lack of a supplier code of conduct |
Share of investments in investee companies without any supplier code of conduct (against unsafe working conditions, precarious work, child labour and forced labour) |
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5. Lack of grievance/complaints handling mechanism related to employee matters |
Share of investments in investee companies without any grievance/complaints handling mechanism related to employee matters |
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6. Insufficient whistleblower protection |
Share of investments in entities without policies on the protection of whistleblowers |
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7. Incidents of discrimination |
1. Number of incidents of discrimination reported in investee companies expressed as a weighted average 2. Number of incidents of discrimination leading to sanctions in investee companies expressed as a weighted average |
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8. Excessive CEO pay ratio |
Average ratio within investee companies of the annual total compensation for the highest compensated individual to the median annual total compensation for all employees (excluding the highest-compensated individual) |
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Human Rights |
9. Lack of a human rights policy |
Share of investments in entities without a human rights policy |
10. Lack of due diligence |
Share of investments in entities without a due diligence process to identify, prevent, mitigate and address adverse human rights impacts |
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11. Lack of processes and measures for preventing trafficking in human beings |
Share of investments in investee companies without policies against trafficking in human beings |
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12. Operations and suppliers at significant risk of incidents of child labour |
Share of investments in investee companies exposed to operations and suppliers at significant risk of incidents of child labour in terms of geographic areas or type of operation |
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13. Operations and suppliers at significant risk of incidents of forced or compulsory labour |
Share of the investments in investee companies exposed to operations and suppliers at significant risk of incidents of forced or compulsory labour in terms in terms of geographic areas and/or the type of operation |
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14. Number of identified cases of severe human rights issues and incidents |
Number of cases of severe human rights issues and incidents connected to investee companies on a weighted average basis |
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Anti-corruption and anti-bribery |
15. Lack of anti-corruption and anti-bribery policies |
Share of investments in entities without policies on anti-corruption and anti-bribery consistent with the United Nations Convention against Corruption |
16. Cases of insufficient action taken to address breaches of standards of anti-corruption and anti-bribery |
Share of investments in investee companies with identified insufficiencies in actions taken to address breaches in procedures and standards of anti-corruption and anti-bribery |
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17. Number of convictions and amount of fines for violation of anti-corruption and anti-bribery laws |
Numbers of convictions and amount of fines for violations of anti-corruption and anti-bribery laws by investee companies |
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Indicators applicable to investments in sovereigns and supranationals |
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Social |
18. Average income inequality score |
The distribution of income and economic inequality among the participants in a particular economy including a quantitative indicator explained in the explanation column |
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19. Average freedom of expression score |
Measuring the extent to which political and civil society organisations can operate freely including a quantitative indicator explained in the explanation column |
Human rights |
20. Average human rights performance |
Measure of the average human right performance of investee countries using a quantitative indicator explained in the explanation column |
Governance |
21. Average corruption score |
Measure of the perceived level of public sector corruption using a quantitative indicator explained in the explanation column |
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22. Non-cooperative tax jurisdictions |
Investments in jurisdictions on the EU list of non-cooperative jurisdictions for tax purposes |
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23. Average political stability score |
Measure of the likelihood that the current regime will be overthrown by the use of force using a quantitative indicator explained in the explanation column |
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24. Average rule of law score |
Measure of the level of corruption, lack of fundamental rights, and the deficiencies in civil and criminal justice using a quantitative indicator explained in the explanation column |
ANNEX II
Template pre-contractual disclosure for the financial products referred to in Article 8, paragraphs 1, 2 and 2a, of Regulation (EU) 2019/2088 and Article 6, first paragraph, of Regulation (EU) 2020/852