As of March 10, 2021, the European Regulation on Sustainability Disclosures in the Financial Services Sector (SFDR) went into regulation. Under this regulation, companies such as Wilton Investment Services must make transparent to what extent they take sustainability criteria into account in their investment policy. This oversees issues such as environmental, social and employment issues, respect for human rights and the fight against corruption and bribery.
We would like to inform you about how we deal with the SFDR and what this means in concrete terms for the service to you. Although we support a more sustainable society, we do not focus specifically on sustainability or sustainable investing. We do, however, take sustainability risks into account to some extent in our investment policy.
A sustainability risk is the risk that an investment will lose value as a result of a sustainability event or circumstance. Examples of such events or circumstances are climate change or human rights controversies. These can have a negative effect on the value of investments.
When managing your assets, investments are selected on the basis of the established investment policy. When selecting investments, many factors are taken into account that can influence this value development. Because sustainability risks can also influence this value development, these aspects are also part of this.
Negative effects on sustainability
Sustainability factors include environmental, social and employment issues, respect for human rights, and the fight against corruption and bribery. It has been explained above that such factors affect (the value of) investments. Conversely, however, investments can also influence sustainability factors. For example, an investment in fossil fuels produces more environmental damage than an investment in green energy.
The management is of the opinion that insufficient reliable data is currently available to determine the possible negative effects of investments with regard to sustainability. Moreover, where detailed data is available, obtaining it is often expensive and the analysis takes time.
At the moment, we therefore do not explicitly take into account the possible negative effects of investments on sustainability factors in our investment process. This means that when selecting investments in companies, we do not consider the extent to which a company’s activities can have negative effects on sustainability factors.
All in all, we therefore believe that the costs of including such securities in the investment process do not outweigh the expected benefits. For this reason, Wilton Investment Services does not intend to explicitly take into account the possible negative effects of investments on sustainability factors in its investment process.
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