Entity-level Principal Adverse Impact Disclosures
Principal adverse impacts that investment decisions have on sustainability factors will need to be disclosed on the firm’s website, in the form of a statement outlining how investments adversely impact indicators, defined by the European Supervisory Authorities (ESAs) in relation to:
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climate and environment; and
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social and employee matters, respect for human rights, anti-corruption and anti-bribery aspects.
This PAI Statement will have to be published on the firm’s website on 30 June each year in respect of the previous reference year. This will require FMPs to describe the adverse impact of their investment decisions on sustainability factors that qualify as principal in a quantitative manner. This will require firms to source data inputs relevant to the investment decisions they are making and to be able to interpret this data to populate the prescribed template in a way that is clear for clients/ investors to understand. Data sources may include external market research providers, internal financial analysts and specialists in the sustainable investments area, internally commissioned studies, publicly available information and/or industry information.