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Robo-Advisor and sustainability


Sustainable Finance Disclosure Regulation (SFDR)

The regulation 2019/2088 of the European Parliament and of the Council on sustainability‐related disclosures in the financial services sector describes the rules on how financial market participants shall publish information related to integration of sustainability risks, consideration of adverse sustainability impacts in their processes and provide sustainability‐related information.

Classification of the investment products as an Article 6, 8, and 9 create requirements for financial market participants, such as investment selection and terms of disclosure of information on investment products they offer.

Article 6

Such funds consider sustainability when making investment decisions and shall transparently describe the potential negative impacts on sustainability, but do not promote environmental or social aspects and do not have sustainable investment as a goal. Such investments take into account at least several relevant indicators, for example, CO2 emissions, carbon footprint, gender pay gap, exposure to controversial weapons, and exclude certain industries e.g. fossil fuels, industrial gambling, alcohol and tobacco.

Article 8

The funds classified under this article promote environmental goals or social characteristics, among others, or a combination of those, provided that the companies in which the investments are made follow good governance practices. Objectives of such investments is, for example, investing in human capital, renewable energy, reducing inequalities, greenhouse gas emission, fighting against corruption and bribery.

Article 9

This article describes the highest-ranking sustainable investments: Here, the funds set sustainable investment as their primary objective. Such funds focus solely on sustainable investments, for example, on climate change, renewable energy, reducing greenhouse gases and pollution, conserving clean water, habitats and species.

All investment solutions offered in Robo-Advisor take into account the aspect of sustainability 

At the moment, when providing investment advice or portfolio management service, promotion of environmental or social characteristics or sustainable investments is not our main objective. However, when choosing investment funds or ETFs for Robo-Advisor, we still take sustainability aspects into account.  

For that, we prefer investment funds and ETFs that are at least classified as SFDR Article 8-compliant instruments.

In our investment decisions, we consider sustainability risks and consider principal adverse impact according to our Policy on the Integration of Sustainability Risk and Impact in Investment Decisions and Investment Advice.  However, according to the EU regulations, our portfolio management service cannot be classified as sustainability-promoting financial product. We are working towards our portfolios being considered SFDR Article 8-compliant. 

More about sustainability in investment

A range of new EU-wide sustainable finance measures have been introduced on 2 August 2022. Among other requirements there is one that requires investment companies to obtain from their client’s information about sustainability preferences in case of providing investment advice or portfolio management service and assess suitability of an investment based among other aspects on client's sustainability preferences. 

The MiFID-related delegated regulation defines three categories of sustainability preferences for investment products which should reflect customers’ preferences: 

  • Sustainability principles are considered. Investments should consider possible negative impacts on sustainability. 
  • Sustainability is a goal of investment. Investments should address sustainable environmental or social objectives.
  • Investments are focused on environmental issues. Investments should be environmentally sustainable.

Investors having such preference should express sustainability preference and decide to what extent the investment should meet corresponding preference. Therefore, each sustainability category is ascribed to a level, e. g., low (not less than 10%), medium (not less than 30%), and high (not less than 60%).