The European Union Sustainable Finance Disclosure Regulation (EU) 2019/2088 (“SFDR”) requires financial market participants and financial advisers, such as MFO Asset Management Ltd (the “Company”, “MFO”), to provide information to investors with regards to the integration of sustainability risks, the consideration of adverse sustainability impacts and the promotion of environmental or social characteristics, and sustainable investments in their investment decision making process. The regulation was enacted to address the twin objectives of increasing transparency of sustainability-related disclosures and comparability of disclosures for end investors.
Integration of sustainability risks in the investment decision-making process
(SFDR - Article 3 disclosure)
MFO as part of its investment decision-making process/investment advice, and its risk management procedures, it carries out due diligence and monitors a spectrum of risk factors. The Company recognizes the need to consider integrating sustainability risk (environmental, social and governance (“ESG”) event or condition that, if it occurs, could cause an actual or a potential material impact on the value of an investment) in its investment decision-making process. Therefore, MFO has elected to consider ESG factors as part of its wider investment decision-making process. Sustainability risks will be assessed among several other risk factors, as part of the risk assessment performed by MFO for the funds it manages, and for the provision of portfolio management and advisory services to clients. When MFO will be assessing the ESG factors, it will rely on information from external data providers, and although a qualitative review is to be performed, the Company cannot be responsible for the accuracy of this data.
No consideration of adverse impacts of investment decisions on sustainability factors
(SFDR - Article 4 disclosure)
MFO does not, at the present time, consider at entity level principal adverse impacts (PAIs) of investment decisions or investment advice on sustainability factors, mainly due to its size and scale of its activities. In addition, for certain Funds and portfolios that MFO currently manages or advice, it is difficult to consider principle adverse impacts due to the nature of strategies (such as non-ESG benchmark-tracking or Fund of Fund Strategies where consideration of PAI is considered at the underlying Fund).
MFO however considers principal adverse impact data, as far as possible, at product level for certain financial products that have a sustainable investment objective and/or promote, among other characteristics, environmental and/or social characteristics.
MFO will continue to closely monitor the regulatory developments with respect to SFDR and other applicable ESG-focused laws and regulations and will re-evaluate its decision on whether or not to consider PAIs at entity level, each year.
Remuneration Policy
(SFDR - Article 5 disclosure)
MFO currently does not expect to make any changes to its remuneration policy in relation to sustainability risks, as its remuneration policy in general does not encourage excessive risk taking, including risk taking in terms of sustainability risks. MFO will reconsider whether to apply any changes to its remuneration policy in the future, and the relevant policy as well as MFO’s website will be updated.
Date of Initial Publication: 10 March 2021
Date of Update: 10 March 2025