The bank has a policy on integrating ESG risks into investment decisions and advice, approved by the bank’s Board of Directors on 20 October 2021, which covers the organisation’s ESG risk management criteria in its role as a financial market participant or financial adviser.
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Policy on integrating ESG risks into investment decisions and advice
A sustainability risk is understood as an environmental, social or governance event or condition that, if it were to occur, could have a material adverse impact on the value of an investment.
Investment decisions take into account sustainability risks and they are based on in-house and third-party analyses.
The integration of ESG risks shall also be generally included in the principles for action in the provision of financial investment advice and discretionary portfolio management, by means of the criteria and methodology deemed appropriate in accordance with the bank’s policy on integrating ESG risks into investment decisions and advice.
In accordance with Regulation (EU) 2019/2088 and the Regulatory Technical Standards (RTS) for the implementation of Regulation (EU) 2019/2088, entities must consider the inclusion of the Principal Adverse Impacts (PAIs) to measure the impact that investment decisions and advice have on sustainability factors.
The Bank has decided not to conduct an analysis of the adverse impact of investment decisions on sustainability factors. The reasons for this decision are as follows:
- Adverse impacts on sustainability factors that may arise from investment decisions and advice are not currently taken into account due to the lack of a higher degree of market evolution and maturity of the data and information required for disclosures, for all issuers and financial instruments concerned.
- Furthermore, adverse impacts on sustainability factors are not currently taken into account because, on the date of this statement, the regulatory requirements associated with the voluntary consideration of adverse sustainability impacts are pending further clarification by the competent authorities.
This circumstance does not prevent the organisation’s decision regarding the consideration of adverse impacts on sustainability factors from potentially being changed in the future, should the regulation on this issue establish new requirements and should the degree of evolution of the data and information required for the disclosure of adverse impacts on the market lead to greater maturity in the availability of the same and of the associated methodologies for their calculation.
In accordance with Article 5 of Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector, the Bank has included information in its Remuneration Policy, pending final approval by the Board of Directors, on the consistency of the Policy with the integration of sustainability risks.
As such, the Bank shall include among the basic principles governing its Remuneration Policy that it will “ensure that it does not remunerate or evaluate the performance of its personnel in a way that conflicts with its obligation to act in the best interest of its clients, taking into account environmental, social and governance (ESG) risks, and the transparency obligations of Regulation (EU) 2019/2088”.
The bank believes that the integration of ESG criteria in the evaluation and analysis of products may have a favourable effect on the long-term performance of companies and contribute to the greater economic, social and environmentally sustainable progress of society.
Information on the consideration of ESG aspects in the products marketed by the bank is contained in the prospectus for each product, where applicable. For more information about the integration of ESG aspects in the products, please read the product prospectus.
Below are the products currently available to the entity that promote environmental and social characteristics, in accordance with the provisions of Article 8 of Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability‐related disclosures in the financial services sector: