On March 10, 2021 the Regulation (EU) 2019/2088 of November 27, 2019 on sustainability-related disclosures in the financial sector (Disclosure Regulation) entered into force. This regulation aims to support sustainable investments by requiring Financial Market Participants and Financial Advisers to disclose information regarding sustainability risks to investors and clients.
Article 3 of this regulation requires information to be shared with regards to the integration of sustainability risks within investment decision-making processes and investment advice.
Under the SFDR, "sustainability risk" means an environmental, social or governance ("ESG") event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of an investment. These risks can occur both separately and cumulatively; they can affect individual companies or entire sectors or regions and can have very different characteristics.
This document sets out a summary of the policy of Susquehanna International Securities Limited (SIS) on the integration of sustainability risks into its investment decision-making process, for the purposes of disclosure on SIS's website.
SIS considers sustainability risks, also known as ESG risks, alongside all other risks relevant to the portfolio and takes a holistic view on the composition of the portfolio or the holding of specific investments from a risk perspective. As the impact of sustainability risks differ depending on asset class and financial instrument the approach applied is proportional. An ESG risk assessment provides an indication of the operational quality of a business, and its ability to mitigate against risk that may arise from ESG factors. ESG risks can also affect the following traditional risks of investments, and if they occur, could have a significantly negative effect on the yields of an investment:
In line with existing risk management processes, where SIS is not comfortable with the level of risk posed by an investment, SIS will take steps to mitigate and manage that risk which may include divestment from a particular investment.
Copyright © 2021 SIG Susquehanna. All rights reserved. Susquehanna Financial Group, LLLP (SFG), an affiliate of SIG, is a member of FINRA.
Copyright © 2021 SIG Susquehanna. All rights reserved.