SUSTAINABLE FINANCE

Financial products that promote environmental or social characteristics. This is a broad category, and may include a product whose objective is to improve an ESG rating, a carbon footprint indicator or job creation.

Financial products whose management objective includes an environmental or social objective. This is a thematic fund invested in companies that make a positive contribution to sustainable development objectives.

Materiality represents the dual purpose of taking ESG criteria into account in an investment policy: on the one hand, to identify and manage the financial risks arising from external ESG events that could have an impact on the value of an investment - sustainability risks - and, on the other, to limit the potential negative impact of our investments in terms of sustainability - i.e. how the investment made will enable us to reduce our impact on environmental, social or human rights issues.

According to the SFDR regulation, this is an investment in an economic activity that contributes to an environmental objective (renewable energies, reduction of greenhouse gas emissions, effects on biodiversity and the circular economy), or an investment in an economic activity that contributes to a social objective (combating inequality, investment in human capital or economically or socially disadvantaged communities), provided that these investments do not cause significant harm to any of these objectives and that the companies in which the investments are made apply good governance practices.

PAI (Principal Adverse Impacts) These are the significant negative impacts of investment decisions on sustainability factors, i.e. on environmental, social or human rights issues. The SFDR regulation sets out a list of 14 mandatory and 2 optional indicators, including: carbon footprint, exposure of companies to fossil fuels, gender pay gap, violation of minimum social standards. These indicators demonstrate ESG materiality, i.e. the measurable impact of the investment choices made.

DNSH (Do Not Significant Harm) The Do Not Significant Harm principle is one of the requirements imposed by the SFDR and taxonomy regulations: in pursuing a specific sustainable investment objective, no significant harm should be done to another sustainable investment objective.

European Sustainable Finance Disclosure Regulation, which came into force in March 2021. It aims to describe and explain in pre-contractual documents, the sustainable investment strategy and the way management companies integrate information in terms of sustainability of their financial products (integration of risks and negative impacts in terms of sustainability).

The European Taxonomy regulation aims to establish a classification tool to help investors and companies direct capital towards environmentally-friendly economic activities. An economic activity will be considered environmentally sustainable within the meaning of the Taxonomy regulation if it respects one of the six defined environmental objectives, without causing significative harm to the other five, and in compliance with minimum social guarantees.