ESG criteria
On 2 August 2022, Regulation (EU) 2021/1253 of 22 April 2021 entered into force, amending Delegated Regulation (EU) 2017/565 on the integration of sustainability factors, risks and preferences into certain organisational requirements and operating conditions for investment firms.
Under this new regulation, firms providing financial advice must integrate clients’ sustainability preferences into the suitability assessment process. The aim is to enable us to recommend suitable financial instruments that also take these preferences into account as an additional element.
The regulation includes a detailed definition of sustainability preferences, which we set out below for your information:
- Environmentally sustainable investments as defined in Article 2(1) of Regulation (EU) 2020/852 of the European Parliament — the Taxonomy Regulation.
- Sustainable investments as defined in Article 2(17) of Regulation (EU) 2019/2088 of the European Parliament — the Disclosure Regulation (SFDR).
- Investments that take into account the adverse sustainability impacts defined by the client and set out in Article 2(24) of Regulation (EU) 2019/2088 — the Disclosure Regulation (SFDR).
Making finance sustainable by including ESG (Environmental, Social & Governance) criteria in investments is aligned with the Sustainable Development Goals (SDGs) of the 2030 Agenda — a global call to action to end poverty, protect the planet and ensure peace and prosperity for all.
This is a key step in the process, as it makes all investors participants in building a better world. We therefore encourage you to contact your trusted adviser as soon as you have formed a view on your own sustainability preferences and the extent to which you want your investments to contribute to these important goals. In any case, the next time iCapital reviews your suitability assessment, we will ask you specifically about your preferences in this area. To help you familiarise yourself with sustainable finance, we provide some useful links at the end of this page.
However, there is still a long way to go in sustainable finance, as the European Securities and Markets Authority has yet to publish several guidelines and further regulations affecting the financial sector will come into force progressively over the coming months. That is why at iCapital we have established a policy for integrating sustainability risks into the investment decision-making process, as required by the regulation. However, the due diligence policy regarding the consideration of the main adverse impacts on sustainability factors in accordance with the regulation is still under internal development.
In any event, we would like you to know that since 2008 iCapital has been analysing sustainable investments for its institutional clients and has since developed a strategy we call Coherent Investing, which includes different assets such as fixed income, equities, infrastructure and real estate with sustainability labels. The product analysis team selects investment alternatives including ESG and impact criteria for our clients, and many of our portfolios have a significant allocation to this type of investment. Some of our institutional clients also receive specific sustainability and impact reporting produced by iCapital.
Our commitment to the impact investing industry has been absolute since its origins in Spain, and we are significant investors in several funds of this type. We have also promoted knowledge sharing on impact investing and periodically hold training seminars on this type of investment.
We consider ourselves leaders in ESG and impact investment advisory in Spain.