Regulation EU 2019/2088 on sustainability-related disclosures in the financial services sector.

• Principal Adverse Impact:

Article 4 of SFDR requires financial market participants (“FMPs”) to set out a principal adverse impact statement, where they consider principal adverse impacts of investment decisions on sustainability factors, a statement on the due diligence policies with respect to those impacts, taking due account of the size, nature and scale of their activities and the types of financial products that they make available. Where an FMP does not consider the adverse impacts of investment decisions on sustainability factors, the FMP must publish and maintain on its website clear reasons for why it does not do so, including where relevant information as to whether and when they intend to consider such adverse impacts.

SFDR Level 2

Commission Delegated Regulation EU 2022/1288 – the regulatory technical standards related to DNSH, sustainability indicators and adverse sustainability impacts and promotion of ESG characteristics and objectives.

SFDR – Legal and Regulatory Guidance

• European Commission FAQ • Sustainability risks and disclosures in the area of investment management - ESMA Supervisory Briefing

Article 6 Fund

Article 6 refers to Article 6 of the SFDR. An article 6 fund does not have a specific ESG objective anddoes not deem sustainability risks to be relevant.

Article 8 Fund

In accordance with Article 8 of the SFDR, an Article 8 fund promotes, among other characteristics, environmental or social characteristics, or a combination of those characteristics, where the investments are made in companies which follow good governance practices.

Article 9 Fund

In accordance with Article 9 of the SFDR, an Article 9 fund has sustainable investment as its objective or a reduction in carbon emissions. An Article 9 fund must align to at least one of the criteria outlined in the Taxonomy Regulation and do no significant harm to any of the others.

ESAs consolidated Q&A on SFDR and SFDR Level 2

UN SDGs

United Nations Sustainable Development Goals

The 17 goals were adopted by all UN Member States in 2015 as part of the 2030 Agenda for Sustainable Development which set out a 15-year plan to achieve the Goals.

(No poverty; zero hunger; good health and well-being; quality education; gender equality; clean water and sanitation; affordable and clean energy; decent work and economic growth; industry innovation and infrastructure; reduced inequalities; sustainable cities and communities; responsible consumption and production; climate action; live below water; life on land; peace, justice and strong institutions; partnerships for the goals.)

Sustainability is the concept of meeting the needs of the present without compromising the ability of future generations to meet their own needs. It is a combination of environmental health, social equity and economic success in order to create vital, healthy, diverse and resilient communities for this generation and subsequent ones. The practice of sustainability recognizes how these issues are interconnected, complex and require a holistic approach.

Integration of sustainability factors and risks in UCITS, AIFMD, MiFID II and IDD

• UCITS: Commission Delegated Directive EU 2021/1270 implemented in Ireland by amending UCITS Regulations – SI 442 of 2022

• AIFMD: Commission Delegated Regulation EU 2021/1255

• MiFID II: Commission Delegated Regulation EU 2021/1253 (risk management integration and investor sustainability preferences)

• MiFID II: Commission Delegated Directive EU 2021/1269 (product governance obligations)

• Solvency II: Commission Delegated Regulation 2021/1256 (integration into governance)

• IDD: Commission Delegated Regulation EU 2021/1257

US Securities and Exchanges Commission.

The SEC have proposed climate related disclosure requirements for issuers.

Sustainability Accounting Standards Board. The SASB developed industry based standards for the disclosure of sustainability information which is financially material. SASB Standards are now under the oversight of the ISSB and provide for 77 industries within 11 distinct sectors.