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 sustainability adverse impacts
(SFDR - Article 4 disclosure)
MFO does not, at the present time, consider the adverse impact of sustainability factors in its investment decisions or investment advice since it considers that for the funds and portfolio strategies it currently manages or advices, principle adverse impacts are, either not relevant at the moment, or there is currently not available, accessible, relevant and comparable data to perform the adverse impact assessment.
MFO will continue to closely monitor regulatory developments with respect to SFDR and other applicable ESG-focused laws and regulations and will consider adopting the principal adverse impacts following the finalisation of the SFDR Level 2 Regulatory Technical Standards (RTS).
(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.
Last updated: 10 March 2021