Anchor Capital Advisors EAF's present sustainability risk integration policy reflects our commitment to create value for our clients, while promoting the sustainable development of society and the environment. We are committed to rigorously implementing and monitoring this policy and continually improving our practices in this area.
The inclusion of sustainability risks in advising third parties, as well as in own account management, is also aligned with the European Commission's Sustainable Finance Action Plan, whose objectives are summarized in reorienting capital flows towards sustainable investments, integrate sustainability into risk management and increase transparency in the long term.
Regulation EU/2019/2088 on the disclosure of information related to sustainability in the financial services sector establishes the obligation for financial advisers to report on their policy of integrating sustainability risks in the advice they provide to clients.
This document constitutes the Sustainability Risk Integration Policy defined by Anchor Capital Advisors EAF and approved by its administrative body in order to comply with the provisions of current legislation.
Regulation (EU) 2019/2088, of November 27, 2019, on the disclosure of information related to sustainability in the financial services sector.
Regulation (EU) 2020/852, of June 18, 2020, regarding the establishment of a framework to facilitate sustainable investments and by which Regulation (EU) 2019/2088 is modified.
Delegated Regulation (EU) 2022/1288 of the Commission, of April 6, 2022, which completes Regulation (EU) 2019/2088 of the European Parliament and of the Council regarding the regulatory technical standards that specify the details in content and presentation to be met by information relating to the principle of "do not cause significant harm", and specify the content, methods and presentation for information relating to sustainability indicators and adverse sustainability events , as well as the content and presentation of information related to the promotion of environmental or social characteristics and sustainable investment objectives in pre-contractual documents, on websites and in periodic reports.
This Policy is generally applicable to all Entity personnel. It must be known by all managers, employees, agents and other persons linked to the Entity, directly or indirectly, by a control relationship, as well as by all those persons who maintain a direct or indirect relationship with the provision of investment services to clients.
Given the size and internal organization of the entity and the nature, scope and complexity of the activities it carries out, it accepts the principle of proportionality contemplated in the aforementioned Disclosure Regulation. The application of this Policy may be implemented based on the development of regulatory work in progress and the guides or indications of the regulators on this matter and always subject to the indicated principle of proportionality, taking into account the size, internal organization, nature and scope of activity of Anchor Capital Advisors EAF.
Entry into force
The European supervisory authorities (ESMA, EBA and EIOPA) published, on February 25, 2021, a statement on the application of regulation 2019/2088 (SFDR) and its regulatory technical standards (RTS). English acronym), subsequently approved by the European Commission on April 6, 2022.
The main objective of the declaration is to guarantee a harmonized approach in the presentation of the content and methodologies of the information related to sustainability, considering the different dates of application of the regulation and the RTS:
- The disclosure regulation is applicable from March 10, 2021 under the “comply or explain” principle.
- The regulatory technical standards or RTS are applicable from January 1, 2023.
Policy for the Integration of sustainability risks in financial advice on investment
In addition to taking traditional financial risks into account, it is important to carry out a correct determination of the so-called "sustainability risks" or ESG risks, due to their impact on the valuation of investments and on their performance.
The ESG criteria address the three pillars of sustainability and are Environmental, Social and Governance:
- Environmental Criteria (E):
It covers issues related to the care and conservation of the environment and takes into account climate risks, the company's carbon footprint, the scarcity of natural resources, pollution and waste, in addition to environmental opportunities, products and businesses with a positive impact (renewable energy), etc.
- Social Criteria (S):
Includes labour and product liability issues, risks such as data security and stakeholder opposition, promoting compliance with human rights, access to finance and access to Information, working conditions: slavery, labour children, impact on local communities, health, nutrition, demographic risks, businesses with a positive impact at a social level, job creation and ranges from its employees or suppliers, to the entire population or different communities likely to have a link with the company.
- Governance (G)
Includes aspects related to corporate governance, company management and leadership, internal policies, executive compensation, internal controls, executive compensation, embezzlement and corruption, lobbies, politicians, governance structure, political influence, business ethics and tax transparency.
ESG data source
The ESG data that Anchor Capital Advisors EAF will take into account in the integration process comes from the Refinitiv/Lipper data provider and, the methodology that has been selected to collect and analyse the ESG information, consists of scoring on the 3 pillars and scoring about the main adverse consequences.
Valuation criteria for the integration of sustainability risks
- Best-in-Class, through the selection of companies that, once the financial analysis has been passed, have an ESG scoring between the first and second quintiles, according to the external data source.
- Best-efforts through the selection of companies that have a favourable ESG rating over time and that adequately handle controversies, encouraging companies and issuers that make greater efforts to improve their sustainability.
- Investments with a sustainable theme, investment in themes or assets specifically related to sustainability (renewable energy, water treatment, preservation of seas and oceans, green technology, or sustainable agriculture, etc.).
For the evaluation of sustainability risks, the process defined below will be followed:
Straight financial assets
In the case of explicit financial assets (stocks, bonds...), Anchor Capital Advisors EAF will sustain the recommendations to its clients, based on criteria that seek to minimize exposure to certain companies or sectors associated with negative ESG characteristics that could pose risks to the reputation or related risks of another type, or that do not respect the Principles of Responsible Investment (PRI).
Likewise, the impact of material ESG aspects on the fundamental analysis and financial valuation will be assessed, requiring an equivalent return premium for the underlying assets with the worst ratings in ESG factors. To do this, both the available information published by the issuers of the assets in which it is invested and ESG ratings published by credit rating companies may be taken as a reference, as well as use data provided by the external provider.
This process of integration of sustainability risks does not necessarily imply the exclusion of values, sectors or assets that, in general terms, can be considered controversial, but rather implies that the profitability requirement of the analysed assets will vary in order to invest and disinvest, taking into account not only financial but also extra-financial variables based on the sustainability of the business and the impact on public and private stakeholders related to the asset considered in each specific case.
The recommendation will be made taking into account not only traditional financial criteria, but also ESG criteria to include in the process all financial and non-financial risks that affect investments.
Mutual funds and other undertakings for collective investment in transferable securities
When it comes to recommending Collective Investment Institutions (IIC), the SDFR category established in its brochure will be taken into account, and the following aspects may also be considered:
- UCITS managed by entities that integrate sustainability risks into their investment analysis and decision-making process even when at the product level the UCITS do not promote or have sustainability characteristics as a specific objective.
- IICs that have an investment strategy committed to all sustainability criteria, betting on full involvement of ESG policies.
- IIC that promote elements of a social nature in addition to the disclosure itself, applying an integration strategy.
- IIC that comply only with disclosure requirements.
Anchor Capital Advisors EAF will additionally carry out an analysis on the environmental, social and governance characteristics of the underlying assets of the IIC, provided that the data is available from the ESG data provider, considering:
- The investment strategy of this financial product to achieve environmental or social characteristics.
- The distribution of the underlying assets of the product.
- The sustainability indicators used to assess the environmental and social characteristics of this product.
Failure to consider adverse impacts of investment advice on sustainability factors
Anchor Capital Advisors EAF does not consider any adverse impact of investment decisions on sustainability factors in its investment advice.
Given the size, the internal organization of the entity and the nature, scope and complexity of the activities it carries out, it does not consider any adverse impact of investment decisions on sustainability factors in its investment advice due to the impossibility to have reliable and sufficient measurements on the indicators of the Main Adverse Incidents (PIAs) in accordance with the provisions of the RTS.
However, Anchor Capital Advisors EAF intends to take into account adverse incidents on Indicators related to Climate Change and the Environment, on Social Affairs, Human Rights and the fight against Corruption and Bribery to the extent that its ESG data provider and Financial Market Participants offer sufficient and reliable information in accordance with the provisions of Delegated Regulation (EU) 2022/1288.
Information to clients
This policy, as well as its updates and subsequent revisions, will be made available to current or potential clients, as well as to the general public, in this website.
Approval, update and review
This risk integration policy has been approved by the administration body of Anchor Capital Advisors EAF.
The policy will be reviewed at least once a year, to adapt it as necessary, considering:
- Legal or regulatory changes that may affect the established policy.
- Indications of the person in charge of the internal control function.
Revisions to said policy must be approved by the administrative body.