This disclosure is being published in accordance with Regulation (EU) 2019/2088 (SFDR) of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the investments services sector, which came into effect on 10th March 2021. Finco Treasury Management Limited (FTM) falls within scope both as a Financial Market Participant and as a Financial Advisor.
SFDR aims to increase transparency regarding how sustainability risks are integrated into investment decisions and investment advice by Financial Market Participants and Investment Advisors. FTM implements processes that consider Enviromental, Social and Governance (ESG) risk factors as part of a group of considerations that make up an investment decision-making processes. Along with the investment objectives, investment time horizon, and the client’s risk attitude, ESG Factors will also be included in the overall investment selection process. However, these ESG factors will not be considered as the primary deciding factor. This approach does not automatically exclude an investment on ESG grounds.
FTM does not undertake an assessment of the Principal Adverse Impacts (PAIs) of its decisions on ESG Factors. Still, it will consider investments that are environmentally and socially responsible as much as possible. FTM engages with clients to understand whether they have concerns about specific activities and/or industries and/or issuers of securities to maintain exclusions on an ongoing basis. In such cases, FTM will screen target investment houses and/or products consistent with the clients’ sustainability preferences and aim to recommend and/or invest in accordance with such client perferences on an ongoing basis. As the regulatory landscape evolves, FTM will consider further incorporating ESG-related risk factors into its investment process.
Alignment of Renumeration Policies with Sustainability Investments
The Regulation requires Financial Market Participants and Financial Advisors to evaluate how to account for their ESG risks in their remuneration policies. In aligning the remuneration policy with ESG objectives, it is important to avoid conflicts of interest when business decisions are taken, including in particular in the determination of the staff remuneration policies. FTM has always adhered to a policy of awarding fixed salaries and not one that is dependent on the volume, value or type of products sold. FTM has no intention to deviate from this policy which ensures that there is absolutely no incentive to take uncalled for risk-taking, including those in respect of sustainability risks or those issued by any particular issuer.