JC 2023 09
12 April 2023

Joint Consultation Paper
Review of SFDR Delegated Regulation
regarding PAI and financial productdisclosures
Draft regulatory technical standards with regard to the content,
methodologies and presentation of sustainability disclosures
pursuant to Article 2a(3), 4(6), 4(7), 8(3), 8(4), 9(5), 9(6), 10(2), 11(4)and 11(5) of Regulation (EU) 2019/2088

Contents
1. Responding to this Consultation

3

2. Executive Summary

5

3. Background analysis

7

4. Draft RTS

42

5. Preliminary Impact Assessments

150

2

1. Responding to this Consultation
The European Supervisory Authorities (hereinafter ‘ESAs’) welcome comments on this consultation
paper setting out the proposed Regulatory Technical Standards (hereinafter ‘RTS’) on content andpresentation of disclosures pursuant to Article 2a(3), 4(6), 4(7), 8(3), 8(4), 9(5), 9(6), 10(2), 11(4) and11(5) of Regulation (EU) 2019/2088 (hereinafter Sustainable Finance Disclosure Regulation ‘SFDR’).
The consultation package includes:• The Consultation Paper• The draft amending RTS [and their relevant Annexes].
• Template for comments
The ESAs invite comments on any aspect of this paper. Comments are most helpful if they:• indicate the specific point to which a comment relates;• contain a clear rationale;• provide evidence to support the views expressed/rationale proposed; and• describe any alternative regulatory choices that the ESAs should consider.
The ESAs also invite specific comments on the questions on the draft RTS as listed in Section 4, andany input on the preliminary impact assessment in Section 5.

Submission of responses
The consultation paper is available on the websites of the three ESAs. Comments on thisconsultation paper should be sent using the response form, via the ESMA website under theheading ‘Your input/Consultations’. Please send your comments in the provided response form by
4 July 2023.
Contributions not provided in the response form or after the deadline will not be processed.

Publication of responses
All contributions received will be published following the close of the consultation, unless you
request otherwise in the respective field in the template for comments. A standard confidentiality
statement in an email message will not be treated as a request for non-disclosure. A confidential
response may be requested from us in accordance with ESAs rules on public access to documents.
We may consult you if we receive such a request. Any decision we make not to disclose theresponse is reviewable by ESAs Board of Appeal and the European Ombudsman.

Data protection
The protection of individuals with regard to the processing of personal data by the ESAs is based on
Regulation (EU) 2018/1725 of the European Parliament and of the Council of 23 October 2018 on3

the protection of natural persons with regard to the processing of personal data by the Union
institutions, bodies, offices and agencies and on the free movement of such data, and repealing
Regulation (EC) No 45/2001 and Decision No 1247/2002/EC as implemented by the ESAs in theimplementing rules adopted by their Management Board. Further information on data protection
can be found under the Legal notice section of the EBA website, the Legal notice section of the
EIOPA website and the Legal notice section of the ESMA website.

42. Executive Summary
Reasons for publication
1. The European Commission has mandated the Joint Committee of the ESAs to review and revise
the RTS laid down in the Commission Delegated Regulation (EU) 2022/1288 of 6 April 2022
supplementing Regulation (EU) 2019/2088 of the European Parliament and of the Council withregard to RTS specifying the details of the content and presentation of the information in
relation to the principle of ‘do no significant harm’, specifying the content, methodologies andpresentation of information in relation to sustainability indicators and adverse sustainability
impacts, and the content and presentation of the information in relation to the promotion ofenvironmental or social characteristics and sustainable investment objectives in precontractual documents, on websites and in periodic reports (hereinafter ‘SFDR DelegatedRegulation’).
2. The purpose of the review is to broaden the disclosure framework and address some technicalissues that have emerged since the SFDR was originally agreed, which concern sustainability
indicators in relation to principal adverse impacts1 as, and to propose amendments to RTS on
pre-contractual and periodic documents2 or and on website product disclosures3 for financial
products, in order to include greenhouse gas (GHG) emissions reduction targets, includingintermediary targets and milestones and actions pursued.
3. The ESAs have taken the opportunity of this mandate also to provide adjustments to othersections of the Delegated Regulation as outlined below.

General background
4. The fast evolving ESG markets and the growing demand for ESG investments has beenaccompanied by an increased demand for high quality sustainability information, although thisis not being matched by adequate transparency and comparability on the sustainability impactof the financial products available in the market, on the underlying sustainability profile ofissuers and on the methodologies underpinning ESG ratings and data in general.
5. In light of these developments, the Commission has announced in the ‘Strategy for Financing
the Transition to a Sustainable Economy’ the review of the previously published RTS to caterfor the increased request for transparency in areas that extend beyond the environment.
6. In the mandate the Commission has requested a review of the RTS laid down in the SFDR
Delegated Regulation which aims at broadening the disclosure framework and addressing themain technical issues that have emerged since the SFDR was originally agreed, which concern
1

Information referred to in Article 4(6) and (7) SFDR
Information referred to in Article 6(3) and Article 11(2) SFDR
3Information referred to in Article 10(1) SFDR
2

5sustainability indicators in relation to adverse impacts as referred to in Article 4(6) and (7) SFDR;
and the review of the information provided in relation to financial products in pre-contractual
documents, on websites, and in periodic reports on GHG emissions reduction targets, includingintermediary targets and milestones, and actions pursued; the provisions in RTS regarding
financial products referred to in Article 5 and 6 of the Taxonomy Regulation sufficiently address
the disclosure and information on environmentally sustainable economic activities.
7. The Commission has suggested to adopt as guiding principle for amendments to the RTS to
reduce the risk of ‘false certainty’ and potential ‘safeguards washing’ by requiring wellsubstantiated evidence that investments align with the safeguards, and that implementation
and application efforts do take place. However, the amended RTS should be carefully calibrated
so that disclosures based on these indicators are proportionate and feasible for financial market
participants (hereafter referred to as ‘FMPs’).
8. In developing the revised RTS, in addition to the guiding principles suggested by theCommission, ESAs have also used knowledge from the Q&As adopted on the practicalapplication of the standards, issues raised by the NCAs as well as the results of the desk-based
research performed in the drafting process of the annual report on the extent of PAI reporting
under SFDR4.
9. For these reasons, the ESAs have gone further than the explicit Commission mandate in thereview of the RTS and have proposed in this consultation paper reflections on the existing
disclosures of do not significantly harm, considered as leaving too much discretion to FMPs,
reflections on potential simplifications of the current templates, often considered too complex
and difficult to understand by retail investors, and a number of other technical adjustments
meant to facilitate the use of the templates and the application of the standards.

Process followed for Consultation Paper
10. During the preparation of this consultation paper, the ESAs sought input from the European
Environment Agency and the Joint Research Centre of the European Commission, and, where
suitable, from decentralised agencies, such as the EU Agency for Fundamental Rights, theEuropean Labour Authority, the European Foundation for Living and Working Conditions, theEuropean Agency for Safety and Health at Work, the European Institute for Gender Equality,
and the European Maritime Safety Agency.

4

Required by Article 18 SFDR

6

3. Background analysis
3.1

Introduction

11. The area of sustainable finance disclosures is a fast and evolving area and to reflect theincreased demand for high quality sustainability-related information the Commission has
invited the ESAs to review the RTS submitted by the ESAs on 4 February 2021 and on 22 October
2021, adopted by the Commission on 6 April 2022 and published in the Official Journal as
Commission Delegated Regulation (EU) 2022/1288 (referred to in this document as the SFDR
Delegated Regulation). The SFDR Delegated Regulation was amended on 17 February 2023 by
Commission Delegated Regulation (EU) 2023/363 with regard to EU Taxonomy investments infossil gas and nuclear energy.
12. To meet the Commission’s request, the ESAs are proposing the following changes:•

Extension of the list of social indicators for principal adverse impacts;•

Refinement of the content of a number of the other indicators for adverse impacts andtheir respective definitions, applicable methodologies, metrics and presentation and;•

Amendments regarding decarbonisation (the ESAs’ preferred term is “GHG emissions
reduction”) targets.

13. In addition to what was explicitly requested by the Commission, the ESAs have consideredfurther changes to the SFDR Delegated Regulation based on experiences shared bystakeholders through Q&As and observations, both directly through desk-based research andfeedback from, the National Competent Authorities. Those proposed changes relate to:

3.2•

DNSH disclosure design options;•

Simplification of the templates; and•Other technical adjustments.

Extension of the list of social indicators for principal adverse impacts

14. The ESAs have reflected on ways to enhance and extend the list of social indicators, including
indicators which would be relevant from both EU and international perspectives (such as tax
avoidance). Conscious of the lack of data challenge which was raised by FMPs during previous
iterations of the RTS, the approach used by the ESAs to define potential new social indicators
was to use as basis the first set of draft European Sustainability Reporting Standards (ESRS)

7

published by the European Financial Reporting Advisory Group (EFRAG) in November 2022,
mandated by the Corporate Sustainability Reporting Directive (CSRD)5).
15. The draft ESRS have been a valuable source for the definition of the new social PAI indicators,
as the ESRS disclosures requirements will have to be reported by all companies in the scope of
CSRD, allowing for less burdensome disclosures. However, the ESAs have considered suggesting
additional mandatory and opt-in indicators which are not – for the time being – reported under
ESRS and seek stakeholders’ feedback.
Overview of newly introduced mandatory social indicators (Table 1)
Newmandatory
Description
indicator

Rationale

ESRS Reference

Amountofaccumulated
earnings
byundertakings wheretheconsolidated
revenue on theirbalance sheet dateAmountof exceeded for each ofaccumulated
the
last
two
earnings in non- consecutive financial
cooperative
tax years a total of € 750
jurisdictions
million at the end of
the relevant financial
year in jurisdictions
that appear on therevised EU list of noncooperative
jurisdictions for tax
purposes

Addition of indicator toassesscompany’s
profitinnoncooperative
jurisdictions for tax
purposes according to
Article 48(b) and (c) of
Directive 2013/34/EU
oftheEuropeanParliament and of theCouncil of 26 June2013

Not an ESRS disclosure.
However,
it isdisclosed by parent
undertakings
where
the
consolidated
revenueon
theirbalance sheet dateexceeded for each of
the
last
two
consecutive financial
years a total of € 750
million

Exposure
tocompanies involvedin the cultivationand production of
tobaccoShare of investments
ininvesteecompanies involvedin the cultivation andproductionoftobaccoAdditional indicator toalign with Commission
Delegated Regulation(EU)
2020/1818
ESRS 2 SBM-1
supplementing
Regulation(EU)
2016/1011 of the5

Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022 amending
Regulation (EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU,
as regards corporate sustainability reporting8

European Parliamentand of the Council as
regards
minimum
standards
for EU
Climatetransition
Benchmarks and EU
Paris-aligned
Benchmarks, Article 12(1)(b) - Exclusions for
EU
Paris-aligned
Benchmarks

Interference in theformation of tradeunions or electionofworkerrepresentatives

Share of investments
ininvesteecompanies withoutcommitments on its
non-interference inthe formation of
trade unions orelection of workers’
representatives.

Average percentage
Share of employees of employees inearning less than investing companies
the adequate wage earning less than theadequate wage

Addition of indicator toassess the adverse
impact of companies
preventing
theformation of tradeunions or election ofworker representative

Under ESRS S1 the noninterference in tradeunion formation is
mentionedasanexample of a policythat could be disclosed(not mentioned as“commitment”)

Addition of indicator toassess the adverse
impact of companies
employing a high
ESRS S1 - 10
percentageof
employees
earning
less than the adequate
wage6.

Overview of newly introduced opt-in indicators (Table 3)

New opt-in indicator

Description

Rationale

ESRS
reference

Excessive use of non- Average share of non- Addition of indicator to ESRS S1-6
guaranteed-hourguaranteed
hours assess the adverse impact
6

The calculation of “adequate wage” has been taken from the ESRS

9

employees in investee employees as share of of a company’s excessive
companies
total employees
use of non-guaranteed
hour employees
Average share of own
Excessive
useof
employees with atemporarycontract
temporary contract as
employees in investee
share
of
total
companies
employees

Addition of indicator toassess the adverse impactof a company’s excessive ESRS S1-6
use of temporary contract
employees

Addition of indicator to
Average share of nonExcessive use of nonassess the adverse impact
employee workers as
employee workers inof a company’s excessive ESRS S1-6
share
of
total
investee companies
use of workers on
employees
temporary contracts
Average share ofInsufficient employment
personswithofpersonswith
disabilities amongst
disabilities within thethe workforce ofworkforce
investee companies

Addition of indicator toassess the company’s
ESRS S1-12
employment of people
with disabilities

Share of investments
in investee companies
without
grievance/complaints handlingmechanismforstakeholders
materially affected by
the operations of theinvestee companies

Addition of indicator toassess the lack ofgrievance/complaints
handling mechanism for ESRS S3
communities affected by
the operations of theinvestee companies

Share of investments
in investee companies
Lackofwithout
grievance/
grievance/complaints
complaints handling
handling mechanism formechanismfor
consumers/end-users ofconsumers or end
the investee company
users of the investee
companies

Addition of indicator toassess the lack ofgrievance/complaints
ESRS S4
handling mechanism for
consumers end-users of
the investee company

Lackofgrievance/complaints
handling mechanism forcommunities affected by
the operations of theinvestee companies

1016. Under the current RTS, there is no social PAI indicator applicable to an investment in a realestate asset. In order to enable these investments to duly take into account social factors, theESAs would like to raise the issue whether social PAI indicators could apply to the entity
managing this real estate asset. This entity could either be the financial market participant
itself, or any other company it hires in view of managing it.
17. Furthermore, the currently applicable definition of ‘inefficient real estate assets’, designed for
PAI indicator 22 of Table 1 in Annex I of the SFDR Delegated Regulation, makes the difference
between real estate assets built before and after 31 December 2020. To improve theinteraction between SFDR and the EU Taxonomy technical screening criteria and to aid theimplementation of this PAI indicator 22 of Table 1, the ESAs would like to raise the issue
whether it would be relevant to expand the definition of inefficient real estate assets built
before 31 December 2020 and further align it with the EU Taxonomy criteria designed forclimate change mitigation DNSH under section 7.7 (‘Acquisition and ownership of building’) of
Annex II of the Commission Delegated Regulation (EU) 2021/2139.
18. Under such a change, a building built before 31 December 2020 would qualify as ‘inefficient
real estate asset’ if it meets the two cumulative conditions:a. the building has an Energy performance certificate (EPC) below C; andb. the building is not within the top 30% of the national or regional building stock expressed as
operational primary energy demand (PED) and demonstrated by adequate evidence.
19. As with the other changes, the ESAs have aligned the wording of a number of current PAI
indicators to align the language with the datapoints reported under the ESRS (i.e. number ofdays lost to work-related injuries, accidents, fatalities from work-related accidents, work
related ill health and fatalities from ill health) or improved formulations (i.e.. Operations andsuppliers at significant risk of incidents of use of workforce qualifying as child labour instead of‘operations and suppliers at significant risk of child labour’).
20. With the view to ensure consistency with the other pieces of sustainable finance legislation (i.e.
Taxonomy Regulation 7 , Climate Benchmarks Regulation 8 ), the ESAs have also proposedchanging the PAI indicator 10 in Table 1 of Annex I (Violations of UN Global Compact principles
and Organisation for Economic Cooperation and Development (OECD) Guidelines forMultinational Enterprises) and indicator #11 (Lack of processes and compliance mechanisms tomonitor compliance with UN Global Compact principles and OECD Guidelines for Multinational
Enterprises) in Annex I, Table I, replacing the UN Global Compact principles with UN Guiding
Principles on Business and Human Rights, including the principles and rights set out in the eight
fundamental conventions identified in the Declaration of the International Labour Organisation
7

Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on theestablishment of a framework to facilitate sustainable investment, and amending Regulation (EU)2019/2088
8
Regulation (EU) 2019/2089 of the European Parliament and of the Council of 27 November 2019
amending Regulation (EU) 2016/1011 as regards EU Climate Transition Benchmarks, EU Paris-aligned
Benchmarks and sustainability-related disclosures for benchmarks

11

on Fundamental Principles and Rights at Work and the International Bill of Human Rights. The
ESAs also added a new indicator measuring the adverse impact of the exposure to companies
involved in the cultivation and production of tobacco in line with the exclusions under the
Climate Benchmarks Delegated Regulation.
21. Finally, to improve the practicality of the provisions related to the calculation of PAI, the ESAs
would welcome comments about whether the definition of ‘enterprise value’ in point (4) of
Annex I of the SFDR Delegated Regulation has any impact with regard to the definition of‘current value of investment’ in the same Annex.
Question 1: Do you agree with the newly proposed mandatory social indicators in Annex I, Table I(amount of accumulated earnings in non-cooperative tax jurisdictions for undertakings whose
turnover exceeds € 750 million, exposure to companies involved in the cultivation and productionof tobacco, interference with the formation of trade unions or election worker representatives,share of employees earning less than the adequate wage) ?
Question 2: Would you recommend any other mandatory social indicator or adjust any of the ones
proposed?
Question 3: Do you agree with the newly proposed opt-in social indicators in Annex I, Table III(excessive use of non guaranteed-hour employees in investee companies, excessive use of
temporary contract employees in investee companies, excessive use of non-employee workers ininvestee companies, insufficient employment of persons with disabilities in the workforce, lack ofgrievance/complaints handling mechanism for stakeholders materially affected by the operationsof investee companies, lack of grievance/complaints handling mechanism for consumers/ endusers of the investee companies)?
Question 4: Would you recommend any other social indicator or adjust any of the ones proposed?
Question 5: Do you agree with the changes proposed to the existing mandatory and opt-in social
indicators in Annex I, Table I and III (i.e. replacing the UN Global Compact Principles with the UN
Guiding Principles and ILO Declaration on Fundamental Principles and Rights at Work) ? Do you
have any additional suggestions for changes to other indicators not considered by the ESAs?
Question 6: For real estate assets, do you consider relevant to apply any PAI indicator related tosocial matters to the entity in charge of the management of the real estate assets the FMP
invested in?
Question 7: For real estate assets, do you see any merit in adjusting the definition of PAI indicator
22 of Table 1 in order to align it with the EU Taxonomy criteria applicable to the DNSH of theclimate change mitigation objective under the climate change adaptation objective?
Question 8: Do you see any challenges in the interaction between the definition ‘enterprise value’and ‘current value of investment’ for the calculation of the PAI indicators?

12

3.3

Technical revision of the PAI framework

22. New formulae: For ease of calculation of the PAI indicators, the ESAs have introduced new
formulae for the PAI indicators that did not already have them, as FMPs have requested greater
clarity about the numerators and denominators.
Question 9: Do you have any comments or proposed adjustments to the new formulae suggested in
Annex I?
23. Technical changes or clarifications to the current indicators: The ESAs have proposed adjusting
a number of indicators considered to merit clarification or clarifying definition. By way of nonexhaustive list of examples: adjustment of the indicators where the metric is ‘expressed asweighted average’ instead of ‘expressed per million euros’ ; the distinction between hazardous
waste and radioactive waste which are proposed as two separate indicators with two different
calculation formulae ; specification of the metrics for the indicator on investments in companies
without sustainable land/agriculture practices and for the indicator on investments incompanies without sustainable oceans/seas practices.
Question 10: Do you have any comments on the further clarifications or technical changes to thecurrent list of indicators? Did you encounter any issues in the calculation of the adverse impact for
any of the other existing indicators in Annex I?
24. Disclosure of share of information received directly from investee companies: as the ESAs
outlined in Question II.1 in the November 2022 Q&As, it is good practice to show the share ofinvestments for which the FMP relies on information directly from investee companies.
Therefore, in this proposal this is required to be displayed in the “explanation” column of the
PAI disclosures.
Question 11: Do you agree with the proposal to require the disclosure of the share of information
for the PAI indicators for which the financial market participant relies on information directly frominvestee companies?
25. Definition of ‘current value of all investments’: The ESAs would like to gather feedback on thenotion of ‘current value of all investments’ (point (4) of Annex I below) for the purpose of thedenominators in the various PAI calculations.
26. Under the currently applicable Delegated Regulation, the notion of ‘all investments’ aims tocover all the investments made by the financial market participant (for the exact definition,please refer to point 3 of Annex I of the SFDR Delegated Regulation, which is the subject ofquestion I.2 of the ESAs’ Q&As on the SFDR Delegated Regulation9 released in November 2022).
27. In the ESAs’ view, this definition has two main benefits. First, it enables the comparability
between FMPs: investors know about the impact of €1M invested by two different FMPs and9https://www.esma.europa.eu/sites/default/files/library/jc_2022_62_jc_sfdr_qas.pdf

13can compare them. Furthermore, it makes the calculation easier for financial market
participants as the same denominator applies across all indicators, although arguably thisintroduces inconsistency between the numerator and denominator.
28. ‘All investments’ could also be understood to mean investments in the particular type of entity
or real estate asset (i.e. investee companies, sovereigns and supranationals, or real estate
assets) causing the adverse impact. The idea would be to focus the calculations of PAI on therelevant categories of exposures (investee companies, sovereigns and supranationals, realestate assets).
29. This approach would have one advantage: each indicator would focus on the investments forwhich it is relevant. Nevertheless, the ESAs consider that adopting such approach may hinder
the comparability between FMPs and limit the relevance of the data disclosed (see the example
below).

FMP
n°1

FMP
n°2

CompanyA€0,5M

Company
B€0,3M

Sovereign
α

€0,2
M

Company
C

€0,3
M

€1M

€1M

Company ’ s enterprisevalue

Investee company ’ stonnes of emissions towater generated

Current value of all
investments

Current value ofinvestment

FMPs

Entity or real estate
asset invested in

Illustrative case of investment decisions made by two FMPs, FMP n°1 and FMP n°2, andinformation related to some of the PAI indicators of table 110

Information for
PAI 8 (T1)11
Emissions to water :Information for
PAI 20 (T1)
Is the country
subject to social
violations? (Yes/No)(Yes = adverse
impact)40 000 t€10 M(0,5 x 40 000) / Irrelevant(10 x 1) = 2.000
t / €M

0t

€5 M

0t

Irrelevant

Irrelevant

Irrelevant

80 000 t€4 M(0,3 x 80 000) /(4 x 1) = 6.000 t Irrelevant/ €M

Irrelevant

Yes

10

Please note that the numbers of the indicators in this illustrative table reflect the proposed changed
indicators in this consultation paper, not the numbers of the original PAI indicators in Commission
Delegated Regulation (EU) 2022/1288
11“Emissions to water” shall be calculated in accordance with the following formula:

(8)
∑𝑛𝑖(

𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖
× 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦′𝑠 𝑡𝑜𝑛𝑛𝑒𝑠 𝑜𝑓 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠 𝑡𝑜 𝑤𝑎𝑡𝑒𝑟 𝑔𝑒𝑛𝑒𝑟𝑎𝑡𝑒𝑑𝑖 )𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦 ′ 𝑠 𝑒𝑛𝑡𝑒𝑟𝑝𝑟𝑖𝑠𝑒 𝑣𝑎𝑙𝑢𝑒𝑖
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠 (€𝑀)

𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠

14

Sovereign
β

€0,2
M

Irrelevant

Irrelevant

Sovereign
γ

€0,1
M

Irrelevant

Irrelevant

Sovereign
δ

€0,4
M

Irrelevant
Yes
IrrelevantNo
Irrelevant
Irrelevant

Irrelevant

No

Information reported by the FMPs – ‘All investments’ approach that is currently applicable(Q&A I.2 November 2022 Q&A document):
FMPs

Information
reported for
PAI 8 (T1)

Information
reported for
PAI 20 (T1)

FMP n°1

2 000t/€M

20%

FMP n°2

6 000t/€M

20%

Information reported by the FMPs – ‘All investments’ approach focusing on each
entity/asset type:
FMPs

Information
reported for
PAI 8 (T1)

Information
reported for
PAI 20 (T1)

FMP n°1(2000 / 0,8) =100%
2 500 t/€M

FMP n°2(4000 / 0,3) =28,57%
13 333 t / €M

For noting:
30. A change in approach would impact the PAI indicators. Concerning PAI 3, the carbon intensityof the investment decisions made by FMP n°2 is significantly higher in the second approach,while the impact on the disclosure made by FMP n°1 is negligible. This affects significantly the
information provided to the investors. Such a result is also observable for PAI 19.
Question 12: What is your view on the approach taken in this consultation paper to define ‘allinvestments’? What are the advantages and drawbacks you identify? Would a change in theapproach adopted for the treatment of ‘all investments’ be necessary in your view?
31. Treatment of investee companies’ value chains: the ESAs received many questions fromstakeholders and public institutions about whether the PAI calculations for investee companies’
15

PAIs should include those investee companies’ value chains (or supply chains) contributions to
the adverse impacts.
32. In order to bring some clarity to this situation and in order to align with the CSRD’s draft ESRS,
the ESAs propose to clarify in the normative text that the contribution of investee companies’
value chains to the PAIs should be considered where the investee company is reporting impacts
in its value chain according to the ESRS under its own materiality assessment performed inaccordance with the ESRS. Financial market participants should include information on thevalue chains of investee companies that are not reporting under the ESRS where that
information is readily available, e.g. in the public reporting of those investee companies. The
consequence of that proposal is that if the investee company is not reporting its value chain’s
adverse impacts under the ESRS or this is disclosed in other reporting, then those do not need
to be taken into account for the PAI calculations. However, an exception to this principle would
be indicators 1-3, 15 and 18 in Table 1 since they require Scope 3 GHG emissions (i.e. theemissions from the value chain) in all cases.
Question 13: Do you agree with the ESAs’ proposal to only require the inclusion of information on
investee companies’ value chains in the PAI calculations where the investee company reports them?
If not, what would you propose as an alternative?
33. Treatment of derivatives in the PAI indicators: there have been a number of discussions with
NCAs on the treatment of derivatives in the calculation of PAI indicators. The starting point wasto consider derivatives as an investment decision. The ESAs note that, under UCITS and AIFMD
frameworks12 derivatives are converted into an equivalent position in the underlying asset tomeasure their exposure to the underlying assets and their contribution to the risk profile of theinvestment fund.
34. The proposed solution would be to require the inclusion of any derivative with an equivalent
long net exposure in the numerator of the PAI indicator, because in such cases the transaction
would have resulted in money going towards the adverse impacts identified in the indicators.
Where FMPs can show that this derivative does not ultimately result in a physical investmentin the underlying security by the counterparty – or any other intermediary in the investment
chain – the FMP would be allowed to consider that this derivative investment does not resultin an adverse impact and should therefore be allowed to exclude it from the numerator. This
would not affect the calculation of the denominator, which should always include all
investments including derivatives (see the discussion above on the notion of “all investments”).
In most cases the counterparty with which an FMP conclude a derivative transaction hedges
itself with short or long exposures on the same underlying assets, but such hedging is not
automatic.
35. The proposed approach aims to avoid the circumvention of PAI reporting by FMPs who set up
derivative transactions in order to artificially lower their PAIs. Without appropriate rules
concerning the inclusion of derivatives within PAI calculations, FMPs could be incentivised to
12

Article 51 of UCITS Directive and Article 42(2) and 43(5) of Commission Directive 2010/43/EU and Article
8 and Annex II of Commission Delegated Regulation (EU) No 231/2013

16

achieve long exposures through derivatives, resulting in an underestimation of the principal
adverse impacts of their investment decisions.
36. Furthermore, the ESAs see merit in clarifying how FMPs should perform netting to ensure that
their reporting of the principal adverse impacts reflects as closely as possible the investments
decisions they have made. In accordance with Q&A 3.1 of the November 2022 Q&As, adverse
impacts should be netted at the level of an individual counterpart without going below zero.
Question 14: Do you agree with the proposed treatment of derivatives in the PAI indicators or would
you suggest any other method?
37. Treatment of derivatives generally: the treatment of derivatives has been discussed for a longtime under the European sustainable finance framework. In the context of the review of the
SFDR Delegated Regulation, this issue has been considered in relation with three different
calculations: (i) the proportion of Taxonomy-aligned investments of a financial product ; (ii) the
proportion of sustainable investments of a financial product; and (iii) the information on
principal adverse impacts.
38. Taking into consideration derivatives in these calculations is paramount to avoid greenwashing.
For taxonomy-alignment and the share of sustainable investments, the risk of greenwashingcomes from financial market participants including derivatives in the numerator in order tooverestimate the products’ alignment or share of sustainable investments. On the other hand,for PAI indicators the opposite applies: the risk of greenwashing stems from financial market
participants excluding derivatives from the numerator in order to underestimate the PAI
indicators.
39. The table below summarises the risks of greenwashing related to these circumstances as wellas the ESAs’ suggestions to address them:Long net
exposure on agiven issuer

Proportion of Taxonomyaligned investments

Proportion of sustainable
investments of a financial
product

PAI calculation

For
Taxonomy-aligned
investments, the risk ofgreenwashing stems fromtrying to maximise thenumerator.

For
sustainable
investments, the risk ofgreenwashing stems fromtrying to maximise thenumerator.

In accordance with recital
33 of the SFDR DelegatedRegulation,
exposures
achievedthroughderivatives should not be
included in the numerator.
Therefore,
net
long

Therefore, the numerator
should take into accountshort positions achieved
through derivatives.

For PAI indicators, therisk of greenwashingstems from trying tominimisethenumerator. Therefore,
when it comes to PAI
indicators, derivatives
should by default be
includedinthenumerator when the
exposure is a longposition.

There is currently
provision applicable

no
to

17

positions achieved only
through derivatives should
not be taken into account.
However, the numerator
should take into accountshort positions achieved
through derivatives toreduce the long net
exposure on a given issuer.

sustainable investment inrelation to derivatives.
The ESAs would likefeedback about applying
the provisions laid down in
Article17(1)(g)tosustainable investments.

Currently, Article 17(1)(g)of the SFDR DelegatedRegulation addresses thisrisk. Nevertheless, thereference to DelegatedRegulation
236/2012
focuses on
equity andsovereign exposures only.
The ESAs are keen to
receivefeedbackonwhether there is a need toclarify that netting may be
performed for other asset
classes as well (e.g.
corporate bonds
Net short
exposure on agiven issuer

None. Nevertheless, the ESAs are of the view that
displaying a negative proportion of Taxonomy-aligned
investments or a negative proportion of sustainable
investments would not fit with the actual investments nor
with the EU sustainable finance framework.
Therefore, the ESAs suggested in Q&A I.3 of theNovember 2022 Q&As that this proportion can never be
negative at the level of an individual issuer. Feedback
welcome.

In accordance with Q&A
I.3 of the November
2022 Q&As, adverse
impacts should be
netted at the level of anindividual counterpart
without going below
zero.

40. Concerning the calculation of the Taxonomy-alignment of financial products in Article 17 of the
SFDR Delegated Regulation, the ESAs note that the provisions on netting laid down in point gof paragraph 1 of this Article cross-refer to Article 3(4) and (5) of Regulation (EU) No 236/2012(short-selling Regulation) which set out the method to be used to calculate net short positions
relating to share capital and sovereign debt. Such cross-reference might be interpreted asmeaning that netting is only allowed with respect to shares and sovereign debt instruments.
18

The ESAs are keen to receive feedback on whether there is a need to clarify that netting may
be performed for other asset classes as well (e.g. corporate bonds), for the purpose of thecalculation of Taxonomy-alignment, and, if so, what method should therefore be used.
Question 15: What are your views with regard to the treatment of derivatives in general (Taxonomyalignment, share of sustainable investments and PAI calculations)? Should the netting provision of
Article 17(1)(g) be applied to sustainable investment calculations?
Question 16: Do you see the need to extend the scope of the provisions of point g of paragraph 1 of
Article 17 of the SFDR Delegated Regulation to asset classes other than equity and sovereign
exposures?

3.4

DNSH disclosure design options

41. Under SFDR, the definition of “sustainable investment” laid down in Article 2(17) leaves
significant discretion to FMPs in how they assess the requirements an investment has to meetto qualify as sustainable and how they disclose it.
42. Despite the empowerment to the ESAs to create disclosures for do not significantly harm
(DNSH) set out in Article 2a, compliance with the DNSH principle also leaves room fordiscretion:(i) Disclosure requirements: financial products have to describe how they “take principal
adverse impact (“PAI”) indicators into account” to demonstrate that their investments
respect the DNSH principle;(ii) DNSH assessment framework: due to SFDR being a disclosure framework, financial
market participants cannot rely on predefined, common criteria in order to assess
compliance of their sustainable investments with the DNSH principle, as they only haveto take into account PAI indicators in their assessment. Considering the fact that ‘taking
into account’ remains undefined, FMPs have discretion about the criteria they will
apply when conducting the assessment.13
43. Within this disclosure-based framework, investors have limited ways to compare financial
products, and investee companies have little predictability about how PAI-based DNSH criteria
will be applied by FMPs. The ESAs are concerned about this as it may undermine thecomparability of financial products and could lead to greenwashing of “sustainable
investments” in SFDR. For this reason, the ESAs are considering more specific disclosure
requirements regarding DNSH under PAIs for sustainable investments, in order to increasetransparency and support some degree of comparability.

13

Criteria could be quantitative, qualitative, a mix of both or anything at all that qualifies as “taking into
account”. In addition, they could reflect quantitative thresholds defined in relation to one or more PAI
indicators (e.g. only investment in companies performing above certain levels, as measured by one ormore PAI indicator(s) would pass the DNSH test).

1944. The abovementioned issues are of particular concern in the case of the environmental PAI
indicators, due to the interlinkage with the EU Taxonomy. In the absence of a social Taxonomy,
the use of social PAI indicators for the DNSH test does not face similar questions. A key
conceptual challenge is that the PAI indicators were designed on a sector-agnostic basis, i.e.
they do not differentiate between the adverse impacts of one sector of the economy compared
to another. They do not establish what level of a specific adverse impact is to be consideredcausing significant harm to the environment and society. This makes sense in the context of the
PAI disclosures which consist of the aggregate total adverse consequences of a financial market
participant’s investment decisions at the entity level. However, this contrasts with theapproach taken for the Technical Screening Criteria (TSC) for substantial contribution and DNSHof the EU Taxonomy, which are tailored to specific economic activities. Moreover, the TSC
applies at economic activity level while the DNSH principle of SFDR applies at investment level.
This difference hampers the interaction between those two principles: it appears that acompany may have a proportion of its economic activities aligned with the EU Taxonomy, while
investing in its equity does not qualify as a sustainable investment under SFDR.
45. While the requirement that SFDR DNSH disclosure should be consistent with the PAI indicators
stems from the empowerment given to the ESAs under Article 2a SFDR, using sector-agnostic
PAI thresholds as “pass or fail” thresholds for DNSH could lead to outcomes potentiallyinconsistent with the environmental sustainability criteria set by the EU Taxonomy. For
instance, based on a given threshold for PAI indicator 3 (greenhouse gas intensity), one fully
taxonomy-aligned company in a high-emitting sector (e.g. a cement company) could “fail” thetest, if the PAI 3 threshold is set too low. In parallel, if set too high, such threshold might fail tofilter out investments in a company with activities not compliant with DNSH TSC under the EU
Taxonomy, in another, relatively less emitting sector. Such issues lower the comprehensibility
and comparability of financial products to investors and may increase greenwashing risks orrisks of investment in stranding assets and causing carbon lock-ins related to assets
incompatible with climate neutrality by 2050. In addition, one single company could pass thethreshold of PAI indicator 3 (calculated on the basis of emissions per EUR million revenue) but
fail the threshold of PAI indicator 2 (carbon footprint which is calculated on the basis ofenterprise value).
46. Furthermore, evidence from investigative work by NGOs shows that a significant share of
Article 9 SFDR financial products have exposures to fossil fuels, and in particular to coal
activities 14 . DNSH disclosures at product level on how sustainable investments take into
account PAI indicator 4 of Table 1 “exposure to companies active in the fossil fuels sector”, will
support transparency on the investments they make in the fossil fuel sector.
47. As a consequence of these inherent inconsistencies between the two parallel concepts ofsustainability, the ESAs believe that Level 1 reform of SFDR is required to resolve them.
14

According to the “Great Green Investment Investigation”: 269 investment funds have at least one
investment in a company active in the coal industry (including the extraction, transportation andcombustion of coal), out of a sample of 838 Article 9 funds studied by the investigation consortium. Powergeneration from solid fossil fuels (including coal) is considered as always significantly harmful under
Article 19 (3) of the Taxonomy Regulation.

20

Consequently, the ESAs welcome the “comprehensive assessment” of SFDR announced by theEuropean Commission in January 2023. The ESAs are considering contributing their views to
the comprehensive assessment through a dedicated Opinion from the Joint Committee.
48. In the context of this review of the SFDR Delegated Regulation, the ESAs have consideredseveral alternatives: keeping the provisions in the SFDR Delegated Regulation unchanged,
providing more specific disclosures and introducing an optional safe harbour for environmental
DNSH of Taxonomy-aligned activities. The ESAs also considered some longer term issues related
to the DNSH framework.
Status quo
49. The ESAs are aware that SFDR Delegated Regulation disclosures have only become fully
applicable on 1 January 2023 (and the first PAI statements under Chapter II and Annex I of the
SFDR Delegated Regulation are not due until 30 June 2023 at the latest). Therefore, there may
be merit in preserving the status quo for the time being while financial market participants are
becoming used to the disclosures and the Taxonomy is becoming more usable and used acrosscompanies. Analytical work could help the ESAs and stakeholders better understand theneeded improvements. Furthermore, the ESAs note that the Commission is undertaking acomprehensive assessment of SFDR.
50. The status quo avoids market disruption and further significant implementation efforts for theindustry (on the basis that there is not a clearly preferable option that might justify the
implementation costs). However, the status quo preserves the already identified weaknessesof the current framework for likely several more years: the risks of greenwashing and that DNSH
disclosure under SFDR is not sufficiently rigorous remain unaddressed in the wait for more
fundamental solutions.
More specific disclosures
51. The current disclosures could also be improved upon to require more granular information. The
ESAs have proposed in this consultation paper that quantitative thresholds related to the PAI
indicators to determine that the sustainable investments do not significantly harm any
environmental or social objectives should be disclosed on the website disclosure of the financial
product. Furthermore, the disclosure of “how the PAI indicators are taken into account” in the
pre-contractual and periodic disclosure templates should indicate that the quantitative
thresholds are available on the website disclosures for the financial product.
52. By clarifying that the FMPs should publish the thresholds for the use of PAI indicators todetermine that their sustainable investments do no significant harm, this option allows bettertransparency and some degree of comparability between financial products. However, with
FMPs still given full discretion on the methodology used to assess DNSH compliance, this option
does not ensure full comparability. Furthermore, it may not prevent the risk that the DNSH test
is applied by FMPs in a way that still allows investments in what some could still consider

21

significantly harmful activities. The ESAs want to hear from stakeholders their feedback on this
proposal.
Optional safe harbour for environmental DNSH disclosures
53. The ESAs would like to collect stakeholders views about the potential implementation of an
optional “safe-harbour for environmental DNSH” for investments in certain categories of
economic activities considered as environmentally sustainable under Article 3 of the Taxonomy
Regulation. The ESAs consulted on a similar concept in the March 2021 consultation paper ontaxonomy-aligned disclosures (JC 2021 22), but at the time it was not considered a feasible
alternative. At the time, the concern was that Article 18(2) TR requires adherence to theprinciple of the SFDR DNSH when the minimum safeguards are implemented under Article 18(1)TR, so it was not considered possible to derogate from that in the RTS. This time, the key
difference is that the statement would only concern environmental DNSH.
54. In disclosure terms, the ESAs proposed in the consultation paper on taxonomy-aligned
disclosures (JC 2021 22) a standardised statement that certain economic activities that comply
with the EU Taxonomy do not require further DNSH disclosures. This time the proposed
standardised statement would read that that certain economic activities that comply with the
EU Taxonomy do not require further environmental DNSH disclosures.
55. The implementation of an optional safe harbour for environmental DNSH disclosures forenvironmental taxonomy-aligned activities might boost use of proceeds instruments focused
exclusively on such environmental economic activities.
56. However, as the safe harbour for environmental DNSH would apply only to the part of investee
companies’ activities that are aligned with the EU Taxonomy, this could result in additional
complexity due to the separate treatment of Taxonomy-aligned economic activities. Therefore,
the recourse to such safe harbour would be optional and FMPs could decide to apply thegeneral approach of SFDR DNSH to all activities.
Longer term considerations
57. With reference to the broader Level 1 considerations mentioned in paragraph 48, the ESAs
believe that co-legislators may wish to consider shifting to a single taxonomy-based system for
DNSH. Nevertheless, should the two parallel concepts of sustainability (SFDR Article 2(17) andthe EU Taxonomy) be retained, the ESAs think the EU Taxonomy technical screening criteria
should form the basis of DNSH assessments also for SFDR.
58. The EU Taxonomy contain more detailed, activity-level technical screening criteria for DNSH
that are more sensitive to specific economic activities undertaken by investee companies.
However, the investment-level application of DNSH in SFDR represents a challenge. I.e. since
an investment in a general financing instrument in an investee company covers all thatcompany’s economic activities, so the Taxonomy-based DNSH test would have to cover all its
economic activities. The ESAs would like feedback on these issues.
22Question 17: Do you agree with the ESAs’ assessment of the DNSH framework under SFDR?
Question 18: With regard to the DNSH disclosures in the SFDR Delegated Regulation, do you
consider it relevant to make disclosures about the quantitative thresholds FMPs use to take into
account the PAI indicators for DNSH purposes mandatory? Please explain your reasoning.
Question 19: Do you support the introduction of an optional “safe harbour” for environmental
DNSH for taxonomy-aligned activities? Please explain your reasoning.
Question 20: Do you agree with the longer term view of the ESAs that if two parallel concepts ofsustainability are retained that the Taxonomy TSCs should form the basis of DNSH assessments?
Please explain your reasoning.
Question 21: Are there other options for the SFDR Delegated Regulation DNSH disclosures toreduce the risk of greenwashing and increase comparability?

3.5

Amendments regarding GHG emissions reduction targets

59. The mandate received from the European Commission requests that the ESAs propose
amendments regarding financial products information provided “in pre-contractual
documents, on websites and in periodic reports on GHG emissions reduction targets, includingintermediary targets and milestones, where relevant, and actions pursued.” This request ismeant to help deliver on the Commission’s objective to improve target-setting, disclosure andmonitoring of the financial sector’s commitments, under the Strategy for financing thetransition to a sustainable economy for sustainable finance published in July 2021.
60. A growing number of financial institutions have made “net-zero” commitments15, often as partof coalitions such as the Net Zero Asset Managers Initiative (NZAMI) and the Net-Zero Asset
Owner Alliance (NZAOA). In order to deliver on their ambition, the Commitment statement of
the NZAMI mentions that signatories will “as required, create investment products aligned withnet zero emissions by 2050 and facilitate increased investment in climate solutions.” NZAOA
signatories are committed to “transition [their] investment portfolios to net-zero [greenhousegases] GHG emissions by 2050.” Financial products offering need to evolve to cater to the needsof investors with net-zero commitments. Financial products that help align financial flows withthe objectives of the Paris Agreement can also help manage climate-related transition risks. In
that context, the ESAs anticipate a potential increase in the supply of products featuring targets
and investment strategies addressing climate change mitigation.

15

Defined in the criteria of the UN-backed Race to Zero campaign as a commitment to “reach (net) zero
GHGs as soon as possible, and by 2050 at the latest, in line with the scientific consensus on the global
effort needed to limit global warming to 1.5C with no or limited overshoot, recognising that this requires
phasing down and out all unabated fossil fuels as part of a global, just transition.”[see the Race to Zero’s
criteria]

2361. A growing number of financial products have been including GHG emissions reduction-related
terms in their names. 16 Some have designated EU Climate Transition or Paris-Aligned
Benchmarks as reference benchmarks with the potential to support investors climate change
mitigation ambitions (disclosing under Article 9(3) of the SFDR). Others have designated an
index other than an EU climate benchmark as a reference benchmark (therefore disclosing
under Article 9(1)) while some disclose under Article 8 SFDR. Given the potential importance ofsuch products for investors’ capacity to deliver on their climate commitments, high-quality
product-level disclosures are critical to support informed investment decisions. They should
support investors’ efforts to compare products and to assess the contribution such products
could make to the achievement of their own climate commitments. 17 In this respect,disclosures on intermediary targets appear important and they could take into account theinvestment horizon recommended to provide the most relevant information to investors.
Product-level disclosures should also support investors’ capacity to monitor progress over time.
62. GHG emissions reduction target disclosure requirements should not create any additionalburden for products without such targets. That is why the first disclosure requirement is aquestion asking whether the product has a GHG emission reduction target. If the answer is yes,then a set of disclosures developed by the ESAs below – and reflected in the relevant templates– should be applied. Otherwise, the proposed additional disclosures would not apply. The ESAs
consider that products should calculate their GHG emissions reduction targets on the basis of
all their investments.
63. For the sake of clarity, such disclosure requirements would also apply to products having GHG
emissions reduction as their investment objective under Article 9(3) SFDR. But such products
would be required to show the relevant benchmark disclosures when they passively track aParis-Aligned Benchmark or Climate Transition Benchmark by providing a hyperlink to a
description of the Benchmark methodology, which is information disclosed by the benchmark
administrator under Articles 13 and 27 of Regulation (EU) 2016/11.
64. The ESAs would like to highlight that such disclosures only aim to foster transparency andcomparability between financial products. As with all SFDR disclosures, disclosures at productlevel on a GHG emission reduction target should not automatically be considered as aguarantee of the robustness or ambition of the methodologies implemented by the FMP.
65. The need for detailed, decision-useful disclosures for investors should be balanced with theneed for comprehensible, summarised information suitable to retail investors. Such disclosure
aims to ensure that GHG emissions reduction targets are substantiated and tackle
16

ESA staff have conducted a preliminary screening of c. 30,000 EU-domiciled funds names as at end2022 and found at least 336 funds whose legal name includes using GHG emissions reduction-related
terms.
17
Beyond voluntary commitments taken by financial institutions, the regulatory framework does not
currently mandate financial institutions in the EU to publish transition plans. However, the draft European
Sustainability Reporting Standards (ESRS) lays out disclosure requirements related to climate transition
plans including, for institutions that do not have a transition plan, an obligation to disclose so. Once
finalised and adopted by the European Commissions, the ESRS will be incorporated in the forthcoming
Delegated Regulation pursuant to Article 49 of the Accounting Directive as amended by the Corporate
Sustainability Reporting Directive.

24

greenwashing. At the same time, disclosure requirements need to be feasible and proportional
for FMPs. The ESAs have developed the disclosures proposed below taking into account thesevarious constraints:(i) In pre-contractual documents, simplified disclosures are meant to provide informationon the type of outcome the product is committing to achieve, on the level of ambitionof the target(s), in particular for products disclosing under Article 9 SFDR the alignmentof the target with the goal of limiting global warming to 1.5 degree Celsius18 and on theshare of investments covered by the target (if not covering all investments although
the target needs to be calculated on the basis of all investment). Disclosures also
explain how the investment strategy will help deliver on the target(s);(ii) In the periodic reports, additional simplified disclosures are meant to provide
information on progress to date and to explain how the investment strategy
contributed to such progress. Periodic reports should also identify the potential delaysin achieving the target(s) and potential adjustments needed.;(iii) A third set of disclosures, more detailed and available on the website will complement
pre-contractual and periodic disclosures. Cross-references to the website should be
included in both the pre-contractual documents and the periodic disclosures.
66. An important disclosure requirement which the ESAs propose to include in pre-contractual
documents seeks to clarify the nature of the commitment the product is making. The objectiveis that financial products actually deliver what investors (retail investors in particular19) expect
and that investors understand clearly what the investment strategy can help achieve. FMPs
would be asked to provide a narrative description about the way the target will be achieved
indicating whether the GHG emissions reduction target is:a. a commitment to reduce the financed GHG emissions of the product 20 , throughdivestment from investments with particular GHG emissions levels and reallocation of
the investments towards companies with comparatively lower GHG emissions,(excluding relatively higher-emitting assets from the portfolio would achieve a
reduction in financed emissions, even if in parallel no emissions reduction has beenachieved in the real economy); and/or
b. a commitment that the investments will be invested in investee companies that deliver
actual GHG emissions reductions over the duration of the investment, either:

18

This information appears useful for investors interested in products that will support the alignment of
their financial flows on the objective of the Paris Agreement to limit global warming to 1.5C.
19
Research shows that retail investors’ decision to invest in ESG products can be motivated either by“value-alignment” or by actual investment’s impact. [Heeb, Florian and Kölbel, Julian and Paetzold, Falko
and Zeisberger, Stefan, Do Investors Care About Impact? (January 5, 2022). Forthcoming in The Review of
Financial Studies, Available at SSRN: https://ssrn.com/abstract=3765659 ; 2° Investing Initiative. What doyour clients really want? May 2022.
20
In the context of investment activities, “financed” emissions are the scope 1, scope 2 (and to someextent scope 3) GHG emissions of investee companies and assets in which funds are invested.

25

•by investing in companies that are expected to deliver GHG emissions
reductions over the duration of the investment (conducting a robust ex
ante assessment of the companies’ ability to deliver GHG emissions
reductions over time, based on their potential transition plans); or•

by engaging with investee companies to contribute to their GHG emissions(reduction resorting to active ownership and harnessing the potential
impact of stewardship and engagement).21

67. ”Climate targets” for investments may rely on a number of approaches. The most common
approach is based on GHG accounting methodologies, where financed GHG emissions are firstmeasured to set the baseline value, before a target is set for a reduction of financed GHG
emissions over a certain time horizon. Climate target-setting may also rely on otherapproaches, including capacity-based ones.22
68. While the proposed disclosure requirements do not mandate the use of any specific approach
to climate target-setting, the ESAs see some limitations to such a situation. The co-existence ofdifferent approaches to climate target-setting can be an additional burden for investors whowant to identify products that can help them deliver on their climate commitments. It can also
complicate their efforts to monitor progress and aggregate results across products. Overall, it
undermines financial product comparability. Investors would have to understand the various
methodologies and to access additional data, in order to convert baselines, targets andprogress measurements for various products into a single set of metrics that is consistent withthe financial market participant’s own entity-level commitments and/ or risks management
system. Under the empowerments in Regulation (EU) 2019/2088 referring to technicalstandards with regard to the “presentation and content” the ESAs believe that all targets should
be disclosed as a measure of financed GHG emissions, and for the purpose of comparability it
is important that all targets are provided using a single metric. Therefore, all targets should be
converted and disclosed using financed GHG emissions expressed in tonnes of CO2-equivalent
per millions EUR of investments – and the same metric should be used for the baseline value
and to measure progress.
69. Methodological standardisation regarding the disclosure of targets has important benefits forinvestors as they assess or compare products and monitor progress. Significant progress has
been made in standardising GHG accounting and reporting. This justifies relying on theforthcoming Delegated Regulation supplementing the CSRD, where such standards are
expected to become mandatory for use by financial institutions – as laid out in the European

21

In November 2022, the Glasgow Financial Alliance for Net Zero published a set of recommendations
and guidance on financial institutions net-zero transition plans. It lays out why and how financial
institutions can engage with investee companies to support their transition to net zero.
22
In its introductory guide to net zero for financial institutions, the WWF defines capacity-based
methodologies as those “which looks at forward-looking production plans of clients’ assets by technology
and by sector and maps alignment with climate scenarios” and temperature-based methodologies as
those “which give an implied degree of warming for portfolios”.

26

Financial Reporting Advisory Group’s (EFRAG) first batch of European Sustainability ReportingStandards (ESRS) submitted to the Commission in November 2022.
70. Emissions associated with financial products fall under the scope 3 downstream emissions offinancial institutions investing (or managing investments) in these products.23 With regards totheir scope 1 and scope 2 emissions, financial institutions can rely on the GHG accounting andreporting standards, available to corporates for more than two decades now. Additional GHG
accounting and reporting guidance and standards have been developed, later on, to deal
specifically with financed emissions. The GHG Protocol Corporate Value Chain (Scope 3)
Standard first provided guidance, under the Chapter dedicated to investments. In 2020, thePartnership for Carbon Accounting Financials (“PCAF”) complemented the GHG Protocol
guidance with the Global GHG Accounting and Reporting Standard for the Financial Industry(“PCAF’s Standard”), which provides detailed guidance per asset class.24
71. EFRAG has built on these pre-existing standardisation efforts for the development of its draft
ESRS. Under the draft ESRS E1, which covers climate-related disclosure requirements, financial
institutions are required to consider the use of the PCAF’s Standard for their financed
emissions. Requiring the use of the PCAF’s Standard for the measure of financial product-levelbaseline financed GHG emissions, when setting and disclosing targets, would supportconsistency in the way targets are set and progress is measured. PCAF’s Standard covers allseven GHG included in national inventories under the United Nations Framework Convention
for Climate Change (UNFCCC).25 In line with the GHG Protocol, PCAF’s Standard requires theinclusion of investee companies’ scope 1 and scope 2 emissions, and is set to require theinclusion of scope 3 emissions for all sectors over time (following a phased-in approach).26
72. Requiring FMPs to use PCAF’s standard when measuring emissions and setting GHG emissions
reduction targets will reduce the burden of assessing, comparing and aggregating investment
products claims. Enhanced transparency and comparability will support the level-playing field
and the market uptake of these investment products. That is why the proposed disclosuresrequire that the product’s baseline, target(s) and progress are disclosed based on PCAF’s
Standard. In order to reflect that requirement, the amended RTS and red line instructions of

23

Also called “financed” emissions, they often represent the most significant portion of financial
institutions’ emissions, far outweighing scope 1 and 2 emissions (respectively, emissions coming from theinstitution’s own operations and from its energy consumption)
24
Seven asset classes are covered: listed equity and corporate bonds, sovereign bonds, business loans
and unlisted equity, project finance, commercial real estate, mortgages and motor vehicle loans.
According to the second version of the standard which was published on 14 December.
25
Carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons(PCFs), sulphur hexafluoride (SF6) and nitrogen trifluoride (NF3)26
The inclusion of investees’ scope 3 emissions is challenging due to data availability and methodologicaluncertainty issues. PCAF adopted a phased-in approach whereby the requirement to include scope 3
emissions of companies will cover additional sectors over time. Starting in 2021, two sectors are covered:oil and gas, and mining. Starting 2024, transportation, construction, buildings, materials and industrial
activities are covered as well. All sectors are to be covered starting 2026.

27the templates refer to the forthcoming Commission Delegated Regulation supplementing the
CSRD that is expected to be adopted in 2023, based on EFRAG’s first batch of draft ESRS.27
73. Consistency with the forthcoming Delegated Regulation of the CSRD would be beneficial withregard to GHG removals and storage, and the use of carbon credits. Based on the latest EFRAG
drafts, under the CSRD, companies would be required to report separately on their gross GHG
emissions, on GHG removals and on their use of carbon credits. In particular, under the draft
standards, companies should disclose any “GHG emission reduction targets” they may have set,covering all three scopes in terms of gross GHG emissions and GHG removals, and carbon
credits should be accounted separately and should not be considered as means to achieve the
GHG emissions reduction targets. Consequently, the disclosure of product-level financed GHG
emissions reduction targets should only reflect gross GHG emissions of the investments. That
is why financed GHG removals and carbon credits should be disclosed separately if at all.
74. In addition, the financial market participant may also be directly financing additional GHG
mitigation projects, through the purchase of carbon credits (in addition to any carbon credits
purchased by the product’s investee companies). Plans to purchase such carbon credits andtheir use over time should be disclosed separately. Given the greenwashing concerns
surrounding these carbon credits, it is critical that investors are fully informed regarding theuse of such credits and regarding their quality. 28 The ESAs are proposing detailed website
disclosures meant to address these needs.
Question 22: Do you agree that the proposed disclosures strike the right balance between theneed for clear, reliable, decision-useful information for investors and the need to keep
requirements feasible and proportional for FMPs? Please explain your answers.
Question 23: Do you agree with the proposed approach of providing a hyperlink to the benchmark
disclosures for products having GHG emissions reduction as their investment objective under
Article 9(3) SFDR or would you prefer specific disclosures for such financial products? Do you
believe the introduction of GHG emissions reduction target disclosures could lead to confusion
between Article 9(3) and other Article 9 and 8 financial products? Please explain your answer.
Question 24: The ESAs have introduced a distinction between a product-level commitment toachieve a reduction in financed emissions (through a strategy that possibly relies only on
divestments and reallocations) and a commitment to achieve a reduction in investees’ emissions(through investment in companies that has adopted and duly executes a convincing transition planor through active ownership). Do you find this distinction useful for investors and actionable for
FMPs? Please explain your answer.
27

It is useful to note that EFRAG will start developing sector-specific ESRS in 2023. The financial sector is
expected to be subject to a number of additional sector-specific disclosure requirements. It will beessential to ensure continued consistency between such requirements and the disclosure requirements
under the SFDR, including the GHG emissions reduction-related amendments inserted in the RTS.
28
The NZAMI commitment statement, for instance, explains that for assets committed to be managed inline with the attainment of net zero emissions by 2050, signatories will “If using offsets, invest in long-term
carbon removal, where there are no technologically and/or financially viable alternatives to eliminate
emissions”

28

Question 25: Do you find it useful to have a disclosure on the degree of Paris-Alignment of the
Article 9 product’s target(s)? Do you think that existing methodologies can provide sufficiently
robust assessments of that aspect? If yes, please specify which methodology (or methodologies)
would be relevant for that purpose and what are their most critical features? Please explain youranswer.
Question 26: Do you agree with the proposed approach to require that the target is calculated on
the basis of all investments of the financial product? Please explain your answer.
Question 27: Do you agree with the proposed approach to require that, at product level, Financed
GHG emissions reduction targets be set and disclosed based on the GHG accounting and reporting
standard to be referenced in the forthcoming Delegated Act (DA) of the CSRD? Should the Global
GHG Accounting and Reporting Standard for the Financial Industry developed by PCAF be requiredas the only standard to be used for the disclosures, or should any other standard be considered?
Please justify your answer and provide the name of alternative standards you would suggest, if
any.
Question 28: Do you agree with the approach taken to removals and the use of carbon credits andthe alignment the ESAs have sought to achieve with the EFRAG Draft ESRS E1? Please explain youranswer.
Question 29: Do you find it useful to ask for disclosures regarding the consistency between the
product targets and the financial market participants entity-level targets and transition plan forclimate change mitigation? What could be the benefits of and challenges to making suchdisclosures available? Please explain you answer.

3.6

Simplification of the templates

75. The ESAs have also taken the opportunity of the Commissions mandate to review the SFDR
Delegated Regulation to reflect on the financial product templates (Annexes II-V). Conscious of
the fact that the templates have frequently been criticised for the excessive length and thecomplexity of the information presented, the ESAs would like to consult stakeholders on
possible changes to the language, layout and structure. The ESAs also intend to conduct
consumer testing on the possible changes.
76. Central to the ESAs’ approach is the need to simplify the language in the templates to enhancecomprehensibility for retail investors. For this reason, the ESAs have developed a dedicated“dashboard” of key information to complement the more detailed information of the precontractual and periodic disclosures in Chapter III and V and Annexes II to V of the SFDR
Delegated Regulation. The ESAs are of the opinion that such dashboards can be effective inattracting the attention of the reader to the most vital information and alleviating issues of
information overload, while also still providing more detailed information for moresophisticated investors further in the document. The dashboard identifies whether the producthas a sustainable investment objective or promotes environmental/social characteristics, butalso identifies the “minimum commitments” of (1) investments used to meet29

environmental/social characteristics or sustainable investment objectives; minimum figure of(2) sustainable investments and (3) Taxonomy-aligned investments, presented in the form ofbar chart, which stakeholders are invited to express views on.
77. The dashboards are neutral in colour (with the important exception of the green colour which
is only used for the investments made by the products, consistent with the colours used in therest of the templates). At the start of the dashboard there is a statement outlining what sortof product it is, and in the case of products disclosing under Article 8 SFDR, it highlights that the
product does not have a sustainable investment objective. The four boxes following thisstatement are the four core elements that the ESAs considered essential to include in thedashboard: (i) Sustainable investments, (ii) Taxonomy aligned investments, (iii) PAI
consideration, and (iv) GHG emissions reduction (i.e. decarbonisation targets). The ESAs also
tried to simplify the language in each of the boxes to make the disclosure more understandable
for consumers and retail investors. With regard to the disclosure on decarbonisation, the ESAs
opted for disclosing in the dashboard only information about a target calculated on the basisof all of the investments of the financial product. The ESAs believe that adding information
about the share of investments covered by the target to the dashboard would make thedisclosure too complex for retail investors to understand. Furthermore, the disclosures lower
down in the template provide more information on decarbonisation targets, including on theshare of investments that the target covers.
78. Icons were added next to the boxes for visual effect. These are icons that were already present
in the templates and correspond to the sections tackled in the respective boxes. Two versionsof each icon (green and grey) are available for the boxes about Sustainable investments,
Taxonomy aligned investments and PAI. When filling the templates, FMPs would select thegreen version in case the product makes sustainable investments, EU Taxonomy aligned
investments, or where it considers PAI. However, FMPs would select the grey version of theicons in case the product does not make sustainable investments or EU Taxonomy aligned
investments or where it does not consider PAI.
79. Given that the proposed dashboard provides information about the product’s sustainable andtaxonomy-aligned investment, this would allow for the below graph currently present in the“Asset allocation” section of the templates to potentially be removed (the below is taken fromAnnex II):30

80. The ESAs believe that the terminology used in the templates can be considered challenging formany retail investors (e.g. the reference to “Article 8” and “Article 9”, the difference between“sustainable objective” and “promotion of characteristics”, the notion of “other investmentsaligned with E/S characteristics, the concept of “Principal Adverse Impacts”). The definitions
and the glossary in the left-hand margin can partially address these challenges, but principally
the ESAs believe the proposed use of plainer language can help.
Question 30: What are your views on the inclusion of a dashboard at the top of Annexes II-V of the
SFDR Delegated Regulation as summary of the key information to complement the more detailed
information in the pre-contractual and periodic disclosures ? Does it serve the purpose of helping
consumers and less experienced retail investors understand the essential information in a simpler
and more visual way?
Question 31: Do you agree that the current version of the templates capture all the informationneeded for retail investors to understand the characteristics of the products ? Do you have views
on how to further simplify the language in the dashboard, or other sections of the templates, tomake it more understandable to retail investors?
Question 32: Do you have any suggestion on how to further simplify or enhance the legibility of
the current templates?
Question 33: Is the investment tree in the asset allocation section necessary if the dashboard
shows the proportion of sustainable and taxonomy-aligned investments?

3.7

Other adjustments

81. Finally, the ESAs have taken the opportunity of the review to address a number of technicalissues that have been raised since the adoption of the RTS in October 2021 by stakeholders.
Those issues are presented below:
82. General principles for the presentation of the information: the ESAs have noted that FMPs
were given a certain discretion to adapt the colours which could result in different shades ofgreen or even different colours used in the pie chart and bar chart on the taxonomy alignment.
To ensure consistency on the use of templates, the ESAs have included an amendment in Article
2 of the Delegated Regulation that the colours in the templates cannot be changed.
Question 34: Do you agree with this approach of ensuring consistency in the use of colours in
Annex II to V in the templates?
83. Delivery of pre-contractual and periodic disclosures electronically: when the pre-contractualand periodic disclosures are delivered electronically, the ESAs propose to allow to display thedisclosures as being extendable on click, based on the questions that open each section (thoseaccompanied by an icon). The ESAs will conduct a consumer testing on this proposal.
Question 35: Do you agree with the approach to allow to display the pre-contractual and periodic
disclosures in an extendable manner electronically?
31

84. Definition of equivalent information: in relation to Article 17(2)(b) and Recital (35) ofRegulation (EU) 2022/1288, when the taxonomy-alignment of investments is not available fromthe public disclosures of investee companies, FMPs should be able to rely on “equivalent
information” from investee companies or third-party providers.
85. The Commission clarified in its May 2022 Q&As that Recital (21) Regulation (EU) 2020/852
refers to exceptional cases where FMPs cannot reasonably obtain the relevant information toreliably determine the alignment with the technical screening criteria established pursuant tothat Regulation (as far as economic activities carried out by undertakings that are not reporting
according to that Regulation are concerned). In such exceptional cases and only for thoseeconomic activities for which complete, reliable and timely information could not be obtained,
FMPs are allowed to make complementary assessments and estimates on the basis of
information from other sources. Assessments and estimates should only compensate forlimited and specific parts of the desired data elements and produce a prudent outcome. FMPs
should clearly explain the basis for their conclusions as well as the reasons for having to makesuch complementary assessments and estimates for the purposes of disclosure to end
investors. Information on taxonomy-eligible (as opposed to aligned) activities should not beprovided for the disclosure of the extent to which investments underlying the financial productare in Taxonomy-aligned economic activities.
86. Rather than referring to the concept of “equivalent information”, the ESAs suggest to align withthe wording of the Recital (21) of Regulation (EU) 2020/852 and use the term “estimates” only.
87. The ESAs considered a set of criteria inspired by the work undertaken by the Platform of
Sustainable Finance in its Platform Usability Report and would like more feedback fromstakeholders with regard to their feasibility. Furthermore, it may be the case that the European
Commission may wish to have the opportunity to consider more general guidelines for the useof estimates across different sustainable finance legislation.
88. The ESAs would appreciate feedback on the possible criteria, as outlined by the Platform
Usability Report, on what can be accepted as estimates:•

For substantial contribution, FMPs could seek evidence from the reporting investee
company that its activities are in compliance with Article 3(a) of the Taxonomy
Regulation. Where an investee company does not directly provide information about
turnover derived from products of services associated with economic activities that
qualify as environmentally sustainable under Regulation (EU) 2020/852, or capital
expenditure or operating expenditure related to assets or processes associated witheconomic activities that qualify as environmentally sustainable under Regulation (EU)2020/852, FMPs may have recourse to environmental metrics disclosed by the investee
company to determine substantial contribution. Where using information provided bya third party, FMPs shall ensure that the source of that information is the investee
company’s reporting. If an investee company has not reported key environmental
metrics required to determine substantial contribution, an FMP or third party data
provider should not estimate those values. When a company has not reported activity32

level information, but has reported metrics at investee company level, these could be
used to estimate compliance with environmentally sustainable economic activities (i.e.
economic activities compliant with the EU Taxonomy) under the precautionary
principle;•

In order to show that the economic activities comply with the do no significant harm
principle in Article 3(b) of the Taxonomy Regulation, FMPs could assess, whereapplicable, their compliance with EU and international environmental laws andstandards, and adherence to the quantitative and process-based tests laid out in thetechnical screening criteria referred to in Article 3(d) of the Taxonomy Regulation.
Investee company reported environmental metrics and the existence of adequate due
diligence processes, including policies, managements systems, monitoring, reporting,could be used to determine compliance with the qualitative process-based tests of dono significant harm under Article 3(b) of the Taxonomy Regulation.

•

To show compliance with minimum social safeguards referred to in Article 3(c) ofRegulation (EU) 2020/852, investee company reported social and governance policies,
management systems, metrics, and remediation processes could be used to determine
compliance with the qualitative process-based tests of minimum safeguards. This
assessment should be made at entity level and can therefore be applied at that levelto any issuance of that investee company. The assessment could focus on forward
looking compliance, incorporating social supply chain management and remediation of
any identified risks via continuous monitoring of the accountability displayed by theinvestee company. FMPs should not consider negative or controversial media reaction
with regard to compliance with Minimum Safeguards. Project-based investments do
not require an assessment at issuing investee company-level but assurance that the
project is conducted in accordance with Article 3(c) of the Taxonomy Regulation.

Question 36: Do you have any feedback with regard to the potential criteria for estimates?
Question 37: Do you perceive the need for a more specific definition of the concept of “keyenvironmental metrics” to prevent greenwashing? If so, how could those metrics be defined?
89. The calculation of the proportion of sustainable investments of financial products: the ESAs
would like to gather feedback whether further specifications are required to calculate theproportion of sustainable investments. These specifications would build upon the provisions ofArticle 17 of SFDR Delegated Regulation related to the calculation of the Taxonomy-alignmentof financial products, as well as upon the rules proposed in this consultation paper regarding
the consideration of derivatives within the calculations of the principal adverse impacts.
Question 38: Do you see the need to set out specific rules on the calculation of the proportion ofsustainable investments of financial products? Please elaborate.
90. Financial products with investment options: To cater for the specificities of financial productswith investment options which can be insurance-based investment products that offer a choice33

of investment options to the investor, and pension products that offer different options (suchas the pan-European pension product) the SFDR Delegated Regulation includes provisions for
those products.
91. Periodic disclosures for financial products with investment options: The delegated regulation
currently specifies that pre-contractually, for products that offer a large range of underlying
investment options and where a corresponding large number of annexes of information need
to be provided, the SFDR disclosures can be provided through a cross-reference to other SFDR
disclosures made pursuant to Directives, Regulations or national law. This in practice means alink to the website disclosures made in accordance with Article 10(1)(c) of SFDR, including to
the website of financial market participant offering the financial product as an investment
option. The reason to allow for cross-referencing is that including the SFDR disclosures for all
relevant investment options would lead to information overload, as such products can offer alarge number of options.
92. Periodically, this possibility was previously not proposed by the ESAs, as the number of invested
options chosen is usually significantly lower than the number of options offered. Since theadoption of the SFDR Delegated Regulation, the ESAs have received requests to change theapproach on the basis that the number of options chosen can still be quite numerous and hence
the risk of information overload is also present for the periodic disclosures. To address this,the ESAs propose to replicate the pre-contractual rules, allowing financial products withinvestment options to cross-reference to the relevant sectoral SFDR disclosures (including
website disclosures made in accordance with Article 10 of Regulation (EU) 2019/2088, including
by the financial market participant offering the financial product).
93. When the cross-references are provided via a link to the website disclosure, the link should
open the relevant sectoral SFDR disclosure for the specific investment option, and not a website
section of the manufacturer of the investment option where other information on thisinvestment option or on different investment options is available. This is necessary as retailconsumers might struggle with finding the sustainability disclosures, as they might not beaware that this disclosure is an Annex of one pre-contractual document (such as the UCITS
prospectus) of the different documents published in such pages (factsheets, Key Information
Document etc.). As a result, the ESAs propose that the cross-referencing is to the specificdocument where the SFDR disclosure is Annexed to, by adding a reference to article 10(1)(c)for pre-contractual disclosures and article 10(1)(d) for periodic disclosures.
94. Website disclosures for financial products with investment options: While the SFDR DelegatedRegulation introduced specific rules for financial products with investment options precontractually and periodically, it did not do so for website disclosures. The ESAs have provided
clarifications on how to disclose the sustainability-related information on the website in theparagraphs 52-53 of the clarifications statement published in 2022. In the current RTS, the ESAs
have added these clarifications in the normative text. Namely, the draft RTS clarifies thatwebsite disclosures for financial products with investment options referred to in Article 8(1) or
9(1), (2) and (3) SFDR should include disclosure of the following items:
34

a. a list of the investment options that qualify the financial product as a financial productreferred to in Article 8(1) or 9(1), (2) and (3) SFDR;
b. a summary of the underlying investment options that qualify the financial product as afinancial product referred to in Article 8(1) or 9(1), (2) and (3) SFDR;

c. Additional details should be disclosed at the underlying investment option level. This
includes a summary per investment option. Where relevant, the information can beprovided by cross-references to the specific section in the website of the specificunderlying investment option. The cross-references can be a direct link to therelevant SFDR disclosure for the specific investment option as required under sectoralrules, and not a link to the general website section of the manufacturer of theinvestment option where information on the different investment options isavailable, or where different pre-contractual documents of that investment options
are generally available. This is because investors might not be aware that the SFDR
disclosure is an Annex of a specific document (listed in Article 6(3) SFDR) that isfrequently published jointly with other documents such as factsheets or Key
Information Document in more general pages of the investment option. Alternatively,
such information is published on a page with a list of the investment options
available. As a result, the ESAs require that the cross-referencing is to the relevant
Annex containing the SFDR disclosure or to the stand-alone SFDR disclosure, where itis provided separately.
95. Disclosures for some underlying investment options that qualify the financial product withinvestment options as a financial product referred to in Article 8(1), 9(1), (2) and (3) SFDR: The
underlying investment options offered might or might not qualify as stand-alone financial
products offered by the financial market participant that is marketing the financial product withinvestment options nor by another financial market participant. For example, this can be thecase for profit participation funds that are only offered in the form of a multi-option product.
96. The lack of standardised disclosures for underlying investment options that are not stand-alone
financial products creates a greenwashing risk as the financial market participant could still
make sustainability related claims for the underlying investment option, without being required
to follow the SFDR disclosures.
97. As a result, the ESAs propose that FMPs should disclose for underlying investment options that,
because of its sustainability-related features, qualify the financial product with investment
options as a financial product that promotes environmental and/or social characteristics or asa financial product that has sustainable investment as its objective, the financial producttemplates, irrespective of whether the underlying investment option qualifies as a stand-alone
financial product under the SFDR or not. In that case the wording in the template is to be
adjusted by replacing “product” by “investment option”.
98. The ESAs propose that this should not apply to investment options that are financial
instruments according to Annex I of Directive 2014/65/EU, except for units in collective
35

investment undertakings. This is because of the potential scope extension of SFDR and thatsome financial products with investment options giving access to thousands of shares or bondsthat would be subject to an impossibly large disclosure obligation.
Question 39: Do you agree that cross-referencing in periodic disclosures of financial products withinvestment options would be beneficial to address information overload?
Question 40: Do you agree with the proposed website disclosures for financial products withinvestment options?
Question 41: What are your views on the proposal to require that any investment option withsustainability-related features that qualifies the financial product with investment options as afinancial product that promotes environmental and/or social characteristics or as a financial
product that has sustainable investment as its objective, should disclose the financial producttemplates, with the exception of those investment options that are financial instruments according
to Annex I of Directive 2014/65/EU and are not units in collective investment undertakings? Shouldthose investment options be covered in some other way?
99. Machine readability: In the context of the upcoming Regulation on the European Single Access
Point (ESAP), the Joint Committee may be mandated to define which information disclosed
pursuant to SFDR (Article 3(1), Article 3(2), Article 4(1), Article 4(3), Article 4(4), Article 4(5),Article 5(1)and Article 10(1)) should be prepared in a machine-readable format and whichmachine-readable format should be used.29
100. The use of files format structured so that software applications can easily identify,
recognise and extract specific data, including individual statements of fact, and their internal
structure, could allow for a more effective supervision of the compliance of these documentswith the Delegated Regulation.
101. The ESAs would like to take this opportunity to gauge the preliminary views of stakeholders
with regards to machine-readability for SFDR disclosures within the scope of this Consultation(Article 4(1), Article 4(3), Article 4(4), Article 4(5) and Article 10(1)).
Question 42: What are the criteria the ESAs should consider when defining which information should
be disclosed in a machine-readable format? Do you have any views at this stage as to whichmachine-readable format should be used? What challenges do you anticipate preparing and/or
consuming such information in a machine-readable format?

Preliminary impact assessments
102. The ESAs have provided preliminary impact assessments of the proposed amendments to
CDR (EU) 2022/1288 under empowerments in Regulation (EU) 2019/2088 in Section 5.

29

Proposal for a Regulation of the European Parliament and the Council amending certain Regulations as
regards the establishment and functioning of the European single access point, COM/2021/725

36

Question 43: Do you have any views on the preliminary impact assessments? Can you provide
estimates of costs associated with each of the policy options?

Questions to stakeholders
103. The sections above contain several questions for stakeholders in this consultation paper.
These questions are reproduced below for ease of reference:

Question 1: Do you agree with the newly proposed mandatory social indicators in Annex I, Table I(amount of accumulated earnings in non-cooperative tax jurisdictions for undertakings whose
turnover exceeds € 750 million, exposure to companies involved in the cultivation and productionof tobacco, interference with the formation of trade unions or election worker representatives,share of employees earning less than the adequate wage) ?
Question 2: Would you recommend any other mandatory social indicator or adjust any of the ones
proposed?
Question 3: Do you agree with the newly proposed opt-in social indicators in Annex I, Table III(excessive use of non guaranteed-hour employees in investee companies, excessive use of
temporary contract employees in investee companies, excessive use of non-employee workers ininvestee companies, insufficient employment of persons with disabilities in the workforce, lack ofgrievance/complaints handling mechanism for stakeholders materially affected by the operationsof investee companies, lack of grievance/complaints handling mechanism for consumers/ endusers of the investee companies)?
Question 4: Would you recommend any other social indicator or adjust any of the ones proposed?
Question 5: Do you agree with the changes proposed to the existing mandatory and opt-in social
indicators in Annex I, Table I and III (i.e. replacing the UN Global Compact Principles with the UN
Guiding Principles and ILO Declaration on Fundamental Principles and Rights at Work) ? Do you
have any additional suggestions for changes to other indicators not considered by the ESAs?
Question 6: For real estate assets, do you consider relevant to apply any PAI indicator related tosocial matters to the entity in charge of the management of the real estate assets the FMP
invested in?
Question 7: For real estate assets, do you see any merit in adjusting the definition of PAI indicator
22 of Table 1 in order to align it with the EU Taxonomy criteria applicable to the DNSH of theclimate change mitigation objective under the climate change adaptation objective?
Question 8: Do you see any challenges in the interaction between the definition ‘enterprise value’and ‘current value of investment’ for the calculation of the PAI indicators?
Question 9: Do you have any comments or proposed adjustments to the new formulae suggested in
Annex I?
37

Question 10: Do you have any comments on the further clarifications or technical changes to thecurrent list of indicators? Did you encounter any issues in the calculation of the adverse impact for
any of the other existing indicators in Annex I?
Question 11: Do you agree with the proposal to require the disclosure of the share of information
for the PAI indicators for which the financial market participant relies on information directly frominvestee companies?
Question 12: What is your view on the approach taken in this consultation paper to define ‘allinvestments’? What are the advantages and drawbacks you identify? Would a change in theapproach adopted for the treatment of ‘all investments’ be necessary in your view?
Question 13: Do you agree with the ESAs’ proposal to only require the inclusion of information on
investee companies’ value chains in the PAI calculations where the investee company reports them?
If not, what would you propose as an alternative?
Question 14: Do you agree with the proposed treatment of derivatives in the PAI indicators or would
you suggest any other method?
Question 15: What are your views with regard to the treatment of derivatives in general (Taxonomyalignment, share of sustainable investments and PAI calculations)? Should the netting provision of
Article 17(1)(g) be applied to sustainable investment calculations?
Question 16: Do you see the need to extend the scope of the provisions of point g of paragraph 1 of
Article 17 of the SFDR Delegated Regulation to asset classes other than equity and sovereign
exposures?
Question 17: Do you agree with the ESAs’ assessment of the DNSH framework under SFDR?
Question 18: With regard to the DNSH disclosures in the SFDR Delegated Regulation, do you
consider it relevant to make disclosures about the quantitative thresholds FMPs use to take into
account the PAI indicators for DNSH purposes mandatory? Please explain your reasoning.
Question 19: Do you support the introduction of an optional “safe harbour” for environmental
DNSH for taxonomy-aligned activities? Please explain your reasoning.
Question 20: Do you agree with the longer term view of the ESAs that if two parallel concepts ofsustainability are retained that the Taxonomy TSCs should form the basis of DNSH assessments?
Please explain your reasoning.
Question 21: Are there other options for the SFDR Delegated Regulation DNSH disclosures toreduce the risk of greenwashing and increase comparability?
Question 22: Do you agree that the proposed disclosures strike the right balance between theneed for clear, reliable, decision-useful information for investors and the need to keep
requirements feasible and proportional for FMPs? Please explain your answers.
38Question 23: Do you agree with the proposed approach of providing a hyperlink to the benchmark
disclosures for products having GHG emissions reduction as their investment objective under
Article 9(3) SFDR or would you prefer specific disclosures for such financial products? Do you
believe the introduction of GHG emissions reduction target disclosures could lead to confusion
between Article 9(3) and other Article 9 and 8 financial products? Please explain your answer.
Question 24: The ESAs have introduced a distinction between a product-level commitment toachieve a reduction in financed emissions (through a strategy that possibly relies only on
divestments and reallocations) and a commitment to achieve a reduction in investees’ emissions(through investment in companies that has adopted and duly executes a convincing transition planor through active ownership). Do you find this distinction useful for investors and actionable for
FMPs? Please explain your answer.
Question 25: Do you find it useful to have a disclosure on the degree of Paris-Alignment of the
Article 9 product’s target(s)? Do you think that existing methodologies can provide sufficiently
robust assessments of that aspect? If yes, please specify which methodology (or methodologies)
would be relevant for that purpose and what are their most critical features? Please explain youranswer.
Question 26: Do you agree with the proposed approach to require that the target is calculated on
the basis of all investments of the financial product? Please explain your answer.
Question 27: Do you agree with the proposed approach to require that, at product level, Financed
GHG emissions reduction targets be set and disclosed based on the GHG accounting and reporting
standard to be referenced in the forthcoming Delegated Act (DA) of the CSRD? Should the Global
GHG Accounting and Reporting Standard for the Financial Industry developed by PCAF be requiredas the only standard to be used for the disclosures, or should any other standard be considered?
Please justify your answer and provide the name of alternative standards you would suggest, if
any.
Question 28: Do you agree with the approach taken to removals and the use of carbon credits andthe alignment the ESAs have sought to achieve with the EFRAG Draft ESRS E1? Please explain youranswer.
Question 29: Do you find it useful to ask for disclosures regarding the consistency between the
product targets and the financial market participants entity-level targets and transition plan forclimate change mitigation? What could be the benefits of and challenges to making suchdisclosures available? Please explain you answer.
Question 30: What are your views on the inclusion of a dashboard at the top of Annexes II-V of the
SFDR Delegated Regulation as summary of the key information to complement the more detailed
information in the pre-contractual and periodic disclosures ? Does it serve the purpose of helping
consumers and less experienced retail investors understand the essential information in a simpler
and more visual way?

39

Question 31: Do you agree that the current version of the templates capture all the informationneeded for retail investors to understand the characteristics of the products ? Do you have views
on how to further simplify the language in the dashboard, or other sections of the templates, tomake it more understandable to retail investors?
Question 32: Do you have any suggestion on how to further simplify or enhance the legibility of
the current templates?
Question 33: Is the investment tree in the asset allocation section necessary if the dashboard
shows the proportion of sustainable and taxonomy-aligned investments?
Question 34: Do you agree with this approach of ensuring consistency in the use of colours in
Annex II to V in the templates?
Question 35: Do you agree with the approach to allow to display the pre-contractual and periodic
disclosures in an extendable manner electronically?
Question 36: Do you have any feedback with regard to the potential criteria for estimates?
Question 37: Do you perceive the need for a more specific definition of the concept of “keyenvironmental metrics” to prevent greenwashing? If so, how could those metrics be defined?
Question 38: Do you see the need to set out specific rules on the calculation of the proportion ofsustainable investments of financial products? Please elaborate.
Question 39: Do you agree that cross-referencing in periodic disclosures of financial products withinvestment options would be beneficial to address information overload?
Question 40: Do you agree with the proposed website disclosures for financial products withinvestment options?
Question 41: What are your views on the proposal to require that any investment option withsustainability-related features that qualifies the financial product with investment options as afinancial product that promotes environmental and/or social characteristics or as a financial
product that has sustainable investment as its objective, should disclose the financial producttemplates, with the exception of those investment options that are financial instruments according
to Annex I of Directive 2014/65/EU and are not units in collective investment undertakings? Shouldthose investment options be covered in some other way?
Question 42: What are the criteria the ESAs should consider when defining which information should
be disclosed in a machine-readable format? Do you have any views at this stage as to whichmachine-readable format should be used? What challenges do you anticipate preparing and/or
consuming such information in a machine-readable format?
Question 43: Do you have any views on the preliminary impact assessments? Can you provide
estimates of costs associated with each of the policy options?
40

Next steps
104. The ESAs will be reviewing these draft RTS based on the responses received. They will thenbe submitted as a final report to the Commission for endorsement and scrutiny by the European
Parliament and Council before being published in the Official Journal of the European Union.

41

4. Draft RTS
COMMISSION DELEGATED REGULATION (EU) No …/..
of XXX
amending Delegated Regulation (EU) 2022/1288
supplementing Regulation (EU) 2019/2088 of the European Parliament and of the Council withregard to regulatory technical standards specifying the details of the content and presentationof the information in relation to the principle of ‘do no significant harm’, specifying the content,
methodologies and presentation of information in relation to sustainability indicators andadverse sustainability impacts, and the content and presentation of the information in relation
to the promotion of environmental or social characteristics and sustainable investment
objectives in precontractual documents, on websites and in periodic reports(Text with EEA relevance)
THE EUROPEAN COMMISSION,
Having regard to the Treaty on the Functioning of the European Union,
Having regard to Regulation (EU) 2019/2088 of the European Parliament and of the Council onsustainability-related disclosures in the financial services sector (30), and in particular Article 2a(3),Article 4(6), third subparagraph, Article 4(7), second subparagraph, Article 8(3), fourthsubparagraph, Article 8(4), fourth subparagraph, Article 9(5), fourth subparagraph, Article 9(6),fourth subparagraph, Article 10(2), fourth subparagraph, Article 11(4), fourth subparagraph andArticle 11(5), fourth subparagraph thereof,
Whereas:(1)

Regulation (EU) 2019/2088 establishes harmonised rules for sustainability-related
disclosures by financial market participants and financial advisers. Commission DelegatedRegulation (EU) 2022/1288 (31) lays down the content, methodologies and presentation ofentity-level principal adverse impact disclosures and the content and presentation offinancial product-level pre-contractual, website and periodic disclosures. That Regulation
also requires pre-contractual and periodic disclosures of a financial product investing in an
economic activity that contributes to one or more of the environmental objectives referred
to in Regulation (EU) 2020/852 of the European Parliament and of the Council32.

30

OJ L 317, 9.12.2019, p. 1.
OJ L 196, 25.7.2022, p.1
32
Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on theestablishment of a framework to facilitate sustainable investment, and amending Regulation (EU)2019/2088 (OJ L 198, 22.6.2020, p. 13).
31

42

(2)

The European Supervisory Authorities propose changes for the European Commission toconsider to the Delegated Regulation (EU) 2022/128833 regarding principal adverse impact
indicators and transparency by financial products following a request for such amendmentsfrom the European Commission on 28 April 2022.

(3)

With the aim of enhancing the comprehensiveness of the disclosures of the principal
adverse impacts of investment decisions on sustainability factors, it is necessary to specify
that the analysis of the adverse impacts of investee companies includes the adverse
impacts of their value chains. However, to ensure coherence with the additional
information on value chains to be disclosed in accordance with Directive (EU) 2022/2464of the European Parliament and of the Council34 and the accompanying sustainability
reporting standards, that information should be required where those investee
companies themselves report that information in accordance with that Directive. If
investee companies are not subject to the reporting required under that Directive,
financial market participant should include information on those companies’ value chains
where that information is readily available, for example by third party data providers.

(4)With the same aim of enhancing the comprehensiveness of the disclosures at entity level
and to avoid circumvention by financial market participants, it is also appropriate toinclude the adverse impacts of the derivatives of financial market participants as they also
constitute investment decisions on sustainability factors. For this purpose, the calculationand conversion methodology set out in Article 8 and Annex II of Commission DelegatedRegulation (EU) No 231/201335 is an appropriate methodology for calculating theexposure by converting the derivatives into equivalent positions in the underlying assetsof those derivatives.

(5)

As announced in the Communication on the Strategy for Financing the Transition to a
Sustainable Economy36, financial market participants should provide more transparency
on the decarbonisation targets of their financial products. In order to enhance therobustness of the financial sector’s commitments to sustainability goals, new disclosure
obligations on any greenhouse gas emission reduction targets of financial products should
be introduced in this Regulation. Financial products referred to in Article 9(3) ofRegulation (EU) 2019/2088 that for the purpose of measuring their performance track the
return of an EU Climate Transition Benchmark or an EU Paris-aligned Benchmark areconsidered to always have a decarbonisation target and should refer to the relevant
decarbonisation disclosures of the benchmark administrator.

33

Commission Delegated Regulation (EU) 2022/1288 of 6 April 2022 supplementing Regulation (EU)2019/2088 of the European Parliament and of the Council with regard to regulatory technical standards
specifying the details of the content and presentation of the information in relation to the principle of ‘dono significant harm’, specifying the content, methodologies and presentation of information in relation
to sustainability indicators and adverse sustainability impacts, and the content and presentation of theinformation in relation to the promotion of environmental or social characteristics and sustainable
investment objectives in precontractual documents, on websites and in periodic reports (OJ L 196,
25.7.2022, p. 1).
34
Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022
amending Regulation (EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive
2013/34/EU, as regards corporate sustainability reporting (OJ L 322, 16.12.2022, p. 15).
35
Commission Delegated Regulation (EU) No 231/2013 of 19 December 2012 supplementing Directive
2011/61/EU of the European Parliament and of the Council with regard to exemptions, general operating
conditions, depositaries, leverage, transparency and supervision (OJ L 083 22.3.2013, p. 1).
36
COM(2021)390.

43

(6)

In order to provide more comprehensive disclosures of social adverse impacts ofinvestment decisions, it is necessary to add additional indicators for such adverse impacts
that are always principal, covering impacts arising from earnings in non-cooperative tax
jurisdictions, the cultivation and production of tobacco, interference in the formation of
trade unions, or employees earning less than an adequate wage. Other indicators are also
required covering additional adverse impacts on social factors that may be principal
adverse impacts.

(7)

Other technical changes are required to the indicators for adverse impacts of investment
decisions on sustainability factors to update and clarify the provisions relating to theentity-level disclosures. In order to increase clarity for financial market participants, it isnecessary to introduce additional formulas specifying the metrics for all the indicators in
Tables 1 to 3 of Annex I of Delegated Regulation (EU) 2022/1288.

(8)

In order to ensure that investors receive information that is comprehensible and is simple
and clear, it is appropriate to simplify the presentation of the financial product precontractual and periodic disclosures, including through a new dashboard of key
information to be presented at the beginning of the disclosure templates.

(9)

It is appropriate to complement the content and presentation of the disclosures forfinancial products with investment options to ensure that adequate information on each
investment option with sustainability characteristics or with a sustainable investment
objective is disclosed. In particular, pre-contractual, periodic and website disclosures forfinancial products offering a range of investment options should provide detailed
information at the investment option level, including the investment options that do not
qualify as financial products, provided the investment option promotes environmental orsocial characteristics or has a sustainable investment objective. At the same time, it is
proportionate to exclude those investment options that qualify as financial instruments
according to Section C of Annex I to Directive 2014/65/EU and are not units in collective
investment undertakings because such instruments are typically not made available byagents to end investors (principals).

(10)

Commission Delegated Regulation (EU) 2022/1288 enables cross-referencing where thenumber of annexes of the pre-contractual and periodic disclosures of financial productswith investment options prevents the disclosures from being clear and concise. It isappropriate to clarify that financial market participants may make use of such crossreferencing by including a hyperlink to the templates published in accordance with points(c) and (d) of Article 10(1) of Regulation (EU) 2019/2088. Similarly, cross-referencing
through hyperlinks should also be available for website disclosures of financial productswith investment options in relation to the information disclosed in accordance with
Article 10(1).

(11)

This Regulation is based on the draft regulatory technical standards submitted to theCommission by the European Banking Authority, the European Insurance and Occupational
Pensions Authority and the European Securities and Markets Authority (European
Supervisory Authorities).

(12)

The European Supervisory Authorities have conducted open public consultations on thedraft regulatory technical standards on which this Regulation is based, analysed thepotential related costs and benefits and requested the opinion of the Banking Stakeholder
44

Group established in accordance with Article 37 of Regulation (EU) No 1093/2010 of theEuropean Parliament and of the Council ([1]), the Insurance and Reinsurance Stakeholder
Group established in accordance with Article 37 of Regulation (EU) No 1094/2010 of theEuropean Parliament and of the Council ([2]), and the Securities and Markets Stakeholder
Group established in accordance with Article 37 of Regulation (EU) No 1095/2010 of theEuropean Parliament and of the Council ([3]).
(13)

In order to ensure the smooth functioning of the financial services sector and sustainability
disclosures, it is necessary that this Regulation applies from […],HAS ADOPTED THIS REGULATION:
Article 1
Amendments to Commission Delegated Regulation (EU) 2022/1288
Delegated Regulation (EU) 2022/1288 is amended as follows:(1) Article 1 is replaced by the following:‘Article 1
Definitions
For the purposes of this Regulation, the following definitions apply:(1)‘greenhouse gas (GHG) emissions’ means emissions of gases listed in Part
2 of Annex V to Regulation 2018/1999 expressed in tonnes of CO2equivalent 37;(2)‘financed GHG emissions’ means GHG emissions relating to investments
underlying the financial product and shall be measured in accordance with
the GHG accounting and reporting standard for the financial industry
mentioned in [Section/Article] […] of Commission Delegated Regulation[1]

Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010
establishing a European Supervisory Authority (European Banking Authority), amending Decision No
716/2009/EC and repealing Commission Decision 2009/78/EC (OJ L 331, 15.12.2010, p. 12).
[2]
Regulation (EU) No 1094/2010 of the European Parliament and of the Council of 24 November 2010
establishing a European Supervisory Authority (European Insurance and Occupational Pensions
Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/79/EC (OJ L 331,
15.12.2010, p. 48).
[3]
Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010
establishing a European Supervisory Authority (European Securities and Markets Authority), amending
Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC (OJ L 331, 15.12.2010, p. 84).
37
Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the
Governance of the Energy Union and Climate Action, amending Regulations (EC) No 663/2009 and (EC)No 715/2009 of the European Parliament and of the Council, Directives 94/22/EC, 98/70/EC, 2009/31/EC,
2009/73/EC, 2010/31/EU, 2012/27/EU and 2013/30/EU of the European Parliament and of the Council,
Council Directives 2009/119/EC and (EU) 2015/652 and repealing Regulation (EU) No 525/2013 of theEuropean Parliament and of the Council (OJ L 328, 21.12.2018, p.1).

45

(EU) …/… of … supplementing Directive (EU) 2022/2464 of the European
Parliament and the Council38;(3)‘GHG removals and storage’ means GHG removals and storage as referred
to in Article [XX] of Commission Delegated Regulation (EU) …/… of …
supplementing Directive (EU) 2022/2464 of the European Parliament and theCouncil];(4)‘carbon credits’ means carbon credits as defined in Article [XX] of
Commission Delegated Regulation (EU) …/… of … supplementing
Directive (EU) 2022/2464 of the European Parliament and the Council];(5)‘sovereign exposure’ means an exposure to central governments, central
banks and supranational issuers;(6)‘environmentally sustainable economic activity’ means an economic activity
that complies with the requirements laid down in Article 3 of Regulation (EU)2020/852;(7)‘non-financial undertaking’ means an undertaking that is not a financial
undertaking as defined in point (8);(8)‘financial undertaking’ means an AIFM as defined in Article 4(1), point (b),of Directive 2011/61/EU of the European Parliament and of the Council 39, amanagement company as defined in Article 2(1), point (b), of Directive
2009/65/EC of the European Parliament and of the Council, an investmentcompany authorised in accordance with Articles 27, 28 and 29 of Directive
2009/65/EC of the European Parliament and of the Council 40 that has notdesignated for its management a management company authorised inaccordance with Articles 6, 7 and 8 of that Directive, a credit institution as
defined in Article 4(1), point (1), of Regulation (EU) No 575/2013 of theEuropean Parliament and of the Council41, an investment firm as defined in
Article 4(1), point (2), of Regulation (EU) No 575/2013, an insurance
undertaking as defined in Article 13, point (1), of Directive 2009/138/EC of

38

Throughout the Articles, reference to ‘Commission Delegated Regulation (EU) …/… of … supplementing
Directive (EU) 2022/2464 of the European Parliament and the Council’ means to the delegated act that
the European Commission will adopt pursuant to Article 29b of Directive (EU) 2022/2464 of the European
Parliament and the Council. The reference to the relevant Section or Article will be inserted following the
publication of such delegated act.
39
Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative
Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC)No 1060/2009 and (EU) No 1095/2010 (OJ L 174, 1.7.2011, p. 1).
40
Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordinationof laws, regulations and administrative provisions relating to undertakings for collective investment intransferable securities (UCITS) (OJ L 302, 17.11.2009, p. 32).
41
Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on
prudential requirements for credit institutions and amending Regulation (EU) No 648/2012 (OJ L 176,
27.6.2013, p. 1).

46

the European Parliament and of the Council42, a reinsurance undertaking as
defined in Article 13, point (4), of Directive 2009/138/EC, or any third
country entity that carries out similar activities, is subject to the laws of athird country and is supervised by a third-country supervisory authority;(9)‘transitional economic activity’ means an economic activity that complies
with the requirements laid down in Article 10(2) of Regulation (EU)2020/852;(10)‘enabling economic activity’ means an economic activity that complies withthe requirements laid down in Article 16 of Regulation (EU) 2020/852.’;(2) in Article 2, paragraph 1 is replaced by the following:‘1.

Financial market participants and financial advisers shall provide the information
required by this Regulation free of charge and in a manner that is easily accessible,
non-discriminatory, prominent, simple, concise, comprehensible, fair, clear and not
misleading. Financial market participants and financial advisers shall present andlay out the information required by this Regulation in a way that is easy to read, usecharacters of readable size and use a style that facilitates its understanding.
Financial market participants may only adapt size and font type of characters usedin the templates set out in Annexes I to V to this Regulation.’;(3) in Article 6, the following paragraphs 4 to 7 are inserted:‘4.

For the purposes of the indicators related to adverse impacts referred to in paragraph1, financial market participants shall include derivatives by calculating themaccording to the conversion method set out in Annex II to Commission DelegatedRegulation (EU) No 231/201343 and applying Article 8(2), points © and (d) and
Article 8(4) of that Regulation. Financial market participant shall net positions inaccordance with Article 8(3), point (a) of that Regulation, without going below
zero.
By way of derogation from the first subparagraph, where a derivative transaction
does not result in an indirect transaction to buy the underlying investee company,
sovereign exposures or real estate asset, it shall be excluded from the calculations

42

Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on thetaking-up and pursuit of the business of Insurance and Reinsurance (Solvency II) (OJ L 335, 17.12.2009, p.
1).
43Commission Delegated Regulation (EU) No 231/2013 of 19 December 2012 supplementing Directive
2011/61/EU of the European Parliament and of the Council with regard to exemptions, general operating
conditions, depositaries, leverage, transparency and supervision (OJ L 83, 22.3.2013, p. 1).

47

of principal adverse impact of investment decisions on sustainability factors in this
Chapter.
5.

For the purposes of the indicators related to principal adverse impacts referred to inparagraph 1 that apply to investments in investee companies, financial market
participants shall include information on the value chains of those investee
companies where that information is reported by those investee companies inaccordance with the sustainability reporting requirements in Article 19a or 29a of
Directive 2013/34/EU of the European Parliament and of the Council44. Financial
market participants shall include information on the value chains of other investee
companies where that information is readily available.

6.

Financial market participants shall disclose in the column ‘Explanation’ in thesection ‘Description of the principal adverse impacts on sustainability factors’ in
Table 1 of Annex I, the proportion of their calculation that is based on information
obtained directly from the investee company, sovereign or supranational or realestate asset.

7.

Where the investments decisions exclusively finance identified projects, theassessment of the principal adverse impacts of these investment decisions may belimited to those of the projects financed. Financial market participants shall indicate
whether the assessment is limited to principal adverse impacts of the projects
financed.’;(4) Point (c) of Article 7(1) is replaced by the following:‘(c) The methodologies to select and prioritise the indicators referred to in Article
6(1), points (a), (b) and (c), and to identify and assess the principal adverse impacts
referred to in Article 6(1), and in particular an explanation of how thosemethodologies take into account the probability of occurrence and the severity of
those principal adverse impacts, including their potentially irremediable character;’;(5) the following Article 14a is inserted:‘Article 14a
GHG emission reduction targets information
1. Financial market participants shall disclose the information set out in the template inAnnex II on GHG emission reduction targets where:44

Directive 2013/34/EU of the European Parliament and of the Council of 26 June 2013 on the annual
financial statements, consolidated financial statements and related reports of certain types ofundertakings, amending Directive 2006/43/EC of the European Parliament and of the Council andrepealing Council Directives 78/660/EEC and 83/349/EEC (OJ L 182, 29.6.2013, p. 19).

48

(a) The GHG emission reduction target aims to reduce financed GHG emissions; and(b) The GHG emission reduction target is calculated on the basis of investments ofthe financial product to which the GHG accounting and reporting standard forthe financial industry referred to in [Article / Section [XXX] of Commission
Delegated Regulation (EU) …/… of … supplementing Directive (EU)2022/2464 of the European Parliament and the Council] applies.
2. The baseline financed GHG emission shall be expressed in tonnes of CO2-equivalent
per million EUR and calculated according to the following formula:
𝐵𝑎𝑠𝑒𝑙𝑖𝑛𝑒 𝐹𝑖𝑛𝑎𝑛𝑐𝑒𝑑 𝐺𝐻𝐺 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛 𝑖 (𝑡𝐶𝑂2𝑒𝑞/€𝑀) =𝐹𝑖𝑛𝑎𝑛𝑐𝑒𝑑 𝐺𝐻𝐺 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠𝑖 (𝑡𝐶𝑂2𝑒𝑞)
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠𝑖 (€𝑀)

Where the value of the ‘Baseline financed GHG emissionsi’ is calculated for financial
product i, and where the ‘current value of investmentsi’ refers to the financial product’s
investments referred to in paragraph 1(b) and expressed in million EUR.
The GHG emission reduction target shall be expressed in tonnes of CO2-equivalent per
million EUR or in percentage terms relative to the baseline financed GHG emission.
Investee companies’ GHG removals and storage, investee companies’ carbon credits andcarbon credits of the financial market participant shall not be included in the calculationof the GHG emission reduction target of the financial product.

3. Information on investee companies’ GHG removals and storage, investee companies’
carbon credits and carbon credits of the financial market participant shall be provided inaccordance with the template set out in Annex II, in the section ‘What is the greenhousegas emission reduction target of the product?’.
Where information on investee companies’ GHG removals and storage or carbon credits
is not readily available, financial market participants shall provide details of the best
efforts used to obtain the information either directly from investee companies, or bycarrying out additional research, cooperating with third party data providers or external
experts or making reasonable assumptions and indicate that such information is notavailable.’;(6) Article 15 is amended as follows:(a) the introductory sentence of paragraph 1 is replaced by the following:

49

‘1.

For the financial products referred to in Article 6, first subparagraph, ofRegulation (EU) 2020/852, financial market participants shall provide, in thesection ‘What is the minimum proportion of EU Taxonomy investments’ inthe template set out in Annex II, all of the following:’;(b) point (b) of paragraph 3 is replaced by the following:‘(b)

where information about the degree to which the investments are inenvironmentally sustainable economic activities is not readily available frompublic disclosures by investee companies, details of whether the financial
market participant used estimates;’;(7) Article 16 is replaced by the following:‘Article 16
Sustainable investment information in the asset allocation section
for financial products that promote social characteristics
For financial products that promote environmental or social characteristics and that include
a commitment in sustainable investments with a social objective, financial market
participants shall include in the section ‘What is the asset allocation planned for thisproduct?’ in the template set out in Annex II the minimum share of those sustainable
investments.’;(8) Article 17 is amended as follows:(a) in paragraph 1, the following point (ba) is inserted:‘(ba) for loans and advances granted by the financial product to investee companies,
where a proportion of activities of those investee companies is associated withenvironmentally sustainable economic activities, the market value of that proportion of
those loans and advances’;(b) in paragraph 1, point (c) is replaced by the following:‘(c) for loans and advances other than those referred to in point (ba), where a proportionof the proceeds is required by the terms of those loans and advances to be used
exclusively on environmentally sustainable economic activities, the market value of that
proportion’;(c) point (b) of paragraph 2 is replaced by the following:50

‘(b) for other investee companies, estimates obtained by the financial market participant
directly from investee companies or from third party providers.’;(9) in Article 18, the following paragraphs (4) and (5) are inserted:‘4. For the financial products with a GHG emission reduction target set in accordancewith Article 14a(1), financial market participants shall provide the information in theformat of the template set out in Annex III on GHG emission reduction targets. The
baseline financed GHG emission and the GHG emission reduction target shall becalculated in accordance with Article 14a(2) and (3).
5. By way of derogation from paragraph 4, for financial products referred to in Article
9(3) of Regulation (EU) 2019/2088 whose investment objective is to track an EU Climate
Transition Benchmark or an EU Paris-aligned Benchmark as defined in Article 3, points(23a) and (23b) of Regulation (EU) 2016/1011, financial market participants shallprovide a hyperlink to information disclosed by the benchmark administrator pursuant
to Articles 13 and 27 of that Regulation.’;(10) Article 20 is amended as follows:(a) paragraphs 2 to 5 are replaced by the following:‘2. The prominent statement referred to in paragraph 1 shall be accompanied by all of thefollowing:(a)a list of the investment options referred to in paragraph 3, presented in accordancewith the categories of investment options referred to in points (a) and (b) of that paragraph;(b)
the proportions of investment options within each of the categories referred to inparagraph 3, points (a) and (b), relative to the total number of investment options offered by
the financial product.
3. Financial market participants shall provide all of the following information in annexes
to the document or information referred to in Article 6(3) of Regulation (EU) 2019/2088 forthe following categories of investment options:(a)for each investment option that promotes environmental or social characteristics, theinformation referred to in Articles 14 to 17 of this Regulation;(b)for each investment option that has sustainable investment as its objective, theinformation referred to in Articles 18 and 19 of this Regulation.
4. Financial market participants shall present the information referred to in paragraph 3,
point (a), in the form of the template set out in Annex II and the information referred to inparagraph 3, point (b), in the form of the template set out in Annex III. For this purpose,references to ‘product’ and ‘financial product’ in the templates shall be replaced by‘investment option’.
51

5. By way of derogation from paragraph 3 and the second sentence of paragraph 4, wherea financial product offers a range of investment options to the investor such that the
information about those investment options cannot be provided in annexes to the document
or information referred to in Article 6(3) of Regulation (EU) 2019/2088 in a clear andconcise manner due to the number of annexes required, financial market participants may
provide the information referred to in paragraph 3 of this Article by including in the main
body of the document or information referred to in Article 6(3) of Regulation (EU)2019/2088 a hyperlink to the templates referred to in paragraph 4.’;(b) the following paragraph 6 is inserted:‘6. For the purposes of this Article, the investment options shall not include those investment
options that qualify as financial instruments according to points (1), (2) and (4) to (11) of
Section C, Annex I to Directive 2014/65/EU.’;(11) Article 21 is amended as follows:(a) paragraphs 2 to 5 are replaced by the following:‘2. The prominent statement referred to in paragraph 1 shall be accompanied by a list of
the investment options referred to in paragraph 3.
3. For each investment option that has sustainable investment as its objective, financial
market participants shall provide the information referred to in Articles 18 and 19 of thisRegulation in annexes to the document or information referred to in Article 6(3) ofRegulation (EU) 2019/2088.
4. Financial market participants shall present the information referred to in paragraph 3 in
the form of the template set out in Annex III. For this purpose, references to ‘product’ and‘financial product’ in the template shall be replaced by ‘investment option’.
5. By way of derogation from paragraph 3 and the second sentence of paragraph 4, wherea financial product offers a range of investment options to the investor such that the
information relating to those investment options cannot be provided in annexes to the
document or information referred to in Article 6(3) of Regulation (EU) 2019/2088 in a clear
and concise manner due to the number of annexes required, financial market participants
may provide the information referred to in paragraph 3 of this Article by including in themain body of the document or information referred to in Article 6(3) of Regulation (EU)2019/2088 a hyperlink to the templates referred to in paragraph 4.’;(b) the following paragraph 6 is inserted:
45

Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets infinancial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (recast), OJ L 173
12.6.2014, p. 349.

52‘6. For the purposes of this Article, the investment options shall not include those investment
options that qualify as financial instruments according to points (1), (2) and (4) to (11) of
Section C, Annex I to Directive 2014/65/EU.’;(12) Article 22 is deleted;(13) Article 24 is replaced by the following:‘Article 24
Sections of website product disclosure for financial products that promote
environmental or social characteristics
For financial products that promote environmental or social characteristics, financial
market participants shall publish the information referred to in Article 10(1) of Regulation(EU) 2019/2088 and Articles 25 to 36 of this Regulation in the following order and madeup of all of the following sections titled:(a)‘Summary’;(b)‘No sustainable investment objective’;(c)‘Environmental or social characteristics of the financial product’;(d)‘Investment strategy’;(e)‘Proportion of investments’;(ea)where the financial product has set a GHG emission reduction target in accordancewith Article 14a(1), ‘GHG emission reduction target’;(f)‘Monitoring of environmental or social characteristics’;(g)‘Methodologies for environmental or social characteristics’;(h)‘Data sources and processing’;(i)‘Limitations to methodologies and data’;(j)‘Due diligence’;(k)‘Engagement policies’;(l)where an index is designated as a reference benchmark to attain the environmental
or social characteristics promoted by the financial product, ‘Designated reference
benchmark’.’;(14) in Article 26, paragraph 2, point (a) is replaced by the following:‘(a)

how the indicators for adverse impacts in Table 1 of Annex I, and any relevant
indicators in Tables 2 and 3 of that Annex are taken into account, including thedescription of the thresholds used to determine that the sustainable investments do

53

not significantly harm any environmental or social objectives and how they are
determined;’;(15) Article 29 is replaced by the following:‘Article 29
Website section ‘Proportion of investments’ for financial products that promote
environmental or social characteristics
In the website section ‘Proportion of investments’ referred to in Article 24, point (e),financial market participants shall insert the information referred to in the section ‘What is
the asset allocation planned for this product?’ in the template set out in Annex II to thisRegulation and shall distinguish between direct exposures in investee entities and all othertypes of exposures to those entities.’;(16) the following Article 29a is inserted:‘Article 29a
Website section ‘GHG emission reduction target’ for financial products that promote
environmental or social characteristics
1.
For financial products that set GHG emission reduction targets in accordance with
Article 14a(1), in the website section ‘GHG emission reduction target’ referred to in Article
24, point (ea), financial market participants shall provide all of the following information:(a)
A description of the actions planned to achieve the GHG emission reduction target,
including of all of the following:(i)whether and how binding elements of the investment strategy are designed to meet
the GHG emission reduction target;(ii)

actions planned to meet the GHG emission reduction target;(iii)

where the financial product commits to contribute to GHG emission reduction at
investee companies’ level, a summary of the engagement plan supporting the GHG
emission reduction target, including how the financial market participant intends to
conduct dialogue with investee companies, exercise voting rights, monitor investee
companies progress regarding GHG emissions reduction target and actions plannedin case of non-achievement of the GHG emission reduction target;(b)
Where the financial market participant has disclosed a transition plan for climatechange mitigation and related target(s) in accordance with [Section] […] of Commission
54Delegated Regulation (EU) …/… of … supplementing Directive (EU) 2022/2464 of theEuropean Parliament and the Council], all of the following information:(i)a summary of the transition plan for climate change mitigation and related targets;(ii)

a description of the contribution that the financial product is expected to have on
the financial market participant’s ability to achieve its transition plan for climatechange mitigation and the related targets;(iii)

any discrepancy between the methodology used to set the transition plan for climatechange mitigation and related targets and the methodology used to set the GHG
emissions reduction target of the financial product.’;(17) Article 37 is replaced by the following:‘Article 37
Website product disclosure for financial products that have sustainable investments
as their objective
For financial products that have sustainable investments as their objective, financial market
participants shall publish the information referred to in Article 10(1) of Regulation (EU)2019/2088 and Articles 38 to 49 of this Regulation in the following order and made up of
all of the following sections titled:(a)‘Summary’;(b)‘No significant harm to the sustainable investment objective’;(c)‘Sustainable investment objective of the financial product’;(d)‘Investment strategy’;(e)‘Proportion of investments’;(ea)

Where the financial product has a GHG emission reduction target in accordancewith Article 14a(1), ‘GHG emission reduction target’;(f)‘Monitoring of sustainable investment objective’;(g)‘Methodologies for sustainable investments’;(h)‘Data sources and processing’;(i)‘Limitations to methodologies and data’;(j)‘Due diligence’ ;(k)‘Engagement policies’ ;(l)‘Attainment of the sustainable investment objective’.’;(18) in Article 39, point (a) is replaced by the following:
55

‘(a)

how the indicators for adverse impacts in Table 1 of Annex I, and any relevant
indicators in Tables 2 and 3 of that Annex, are taken into account, including thedescription of the thresholds used to determine that the sustainable investments do
not significantly harm any environmental or social objectives and how they are
determined;’;(19) the following Article 42a is inserted:‘Article 42a
Website section ‘GHG emissions reduction target’ for financial products that havesustainable investments as their objective
1. For financial products that set GHG emission reduction targets in accordance with
Article 14a(1), in the website section ‘GHG emissions reduction target’ referred to in
Article 37, point (ea), financial market participants shall provide all of the following
information:(a) a description of the actions planned to achieve the GHG emission reduction target,
including of all of the following:(i)whether and how binding elements of the investment strategy are designed to meet
the GHG emission reduction target;(ii)

actions planned to meet the GHG emission reduction target;(iii)

where the financial product commits to contribute to GHG emission reduction at
investee companies’ level, a summary of the engagement plan supporting the GHG
emission reduction target, including how the financial market participant intends to
conduct dialogue with investee companies, exercise voting rights, monitor investee
companies progress regarding GHG emissions reduction target and actions plannedin case of non-achievement of the GHG emission reduction target;(b) Where the financial market participant has disclosed a transition plan for climatechange mitigation and related targets in accordance with [Section] […] of Commission
Delegated Regulation (EU) …/… of … supplementing Directive (EU) 2022/2464 of theEuropean Parliament and the Council], all of the following information:(i)a summary of the transition plan for climate change mitigation and related targets;(ii)

a description of the contribution that the financial product is expected to have on
the financial market participant’s ability to achieve its transition plan for climatechange mitigation and the related targets;

56

(iii)

any discrepancy between the methodology used to set the transition plan for climatechange mitigation and related targets, and the methodology used to set the GHG
emissions reduction target of the financial product.

2.

By way of derogation from paragraph 1, for financial products referred to in Article
9(3) of Regulation (EU) 2019/2088 that use an EU Climate Transition Benchmark or an EU
Paris-aligned Benchmark as defined in Article 3, points (23a) and (23b) of Regulation(EU) 2016/1011 to measure performance by tracking the return of those indices, financial
market participants shall provide a hyperlink to information disclosed by the benchmark
administrator pursuant to Articles 13 and 27 of that Regulation.’;(20) Article 44 is replaced by the following:‘Article 44
Website section ‘Methodologies for sustainable investments’ for financial productsthat have sustainable investment as their objective
In the website section ‘Methodologies for sustainable investments’ referred to in Article
37, point (g), financial market participants shall describe the methodologies used tomeasure the attainment of the sustainable investment objective and how the sustainability
indicators to measure the attainment of that sustainable investment objective are used.’;(21) in Chapter IV, the following Sections 3 and 4 are inserted:‘SECTION 3
Website financial product disclosure for financial products with one or more underlying
investment options that qualify the financial product as promoting environmental orsocial characteristics
Article 49a
Website section for the disclosure of sustainability-related information about
financial products with underlying investment options that qualify those financial
products as promoting environmental or social characteristics
1. By way of derogation from Section 1, where a financial product offers investment options
to the investor and one or more of those investment options qualify that financial product asa financial product that promotes environmental or social characteristics, financial market
participants shall publish the information referred to in Article 10(1) of Regulation (EU)2019/2088 and Articles 49b to 49f of this Regulation in the following order and made up of
all of the following sections titled:

57

(a)

‘List of investment options that promote environmental or social
characteristics’;(b)‘List of investment options that have sustainable investment as theirobjective’;(c)‘Summary’;(d)for each investment option that promotes environmental or social
characteristics ‘Investment option information: environmental or social
characteristics’;(e)

for each investment option that has a sustainable investment objective,‘Investment option information: sustainable investment objective’.

2. For the purposes of this Section, the investment options shall not include thoseinvestment options that qualify as the financial instruments referred to in points (1), (2) and(4) to (11) of Section C, Annex I to Directive 2014/65/EU.
Article 49b
Website section ‘List of investment options that qualify the financial product aspromoting environmental or/and social characteristics’
In the website section ‘List of investment options that promote environmental or social
characteristics’ referred to in Article 49a, point (a), financial market participants shall list all
investment options that promote environmental or social characteristics.
Article 49c
Website section ‘List of investment options that have sustainable investment as theirobjective’
In the website section ‘List of investment options that have sustainable investment as theirobjective’ referred to in Article 49a, point (b), financial market participants shall list all
investment options that have sustainable investment as their objective.
Article 49d
Website section ‘Summary’ for financial products with underlying investment
options
1. In the website section ‘Summary’ referred to in Article 49a, point (c), financial market
participants shall summarise the information contained in the different sections referred toin that Article about the financial product with underlying investment options, including58

whether a sustainability-related investment strategy is applied to all the options or only aselection of options and in that case to specify to which options. The summary section shallhave a maximum length of two sides of A4-sized paper when printed.
2. The website section ‘Summary’ referred to in Article 49a, point (c), shall be provided in
at least the following languages:(a)one of the official languages of the home Member State and, where different andwhere the financial product is made available in more than one Member State, in an
additional language customary in the sphere of international finance;(b)where the financial product is made available in a host Member State, one of theofficial languages of that host Member State.
Article 49e
Website section ‘Investment option information: environmental or social
characteristics’
1. In the website section ‘Investment option information: environmental or social
characteristics’ as referred to in Article 49a, point (d), financial market participants shallidentify each investment option and publish the information referred to in Article 10(1) ofRegulation (EU) 2019/2088 and Articles 25 to 36 of this Regulation in respect of thoseinvestment options in the same order and made up of all of the same sections as those referred
to in Article 24.
2. For the purposes of paragraph 1:(a) the sections referred to in Article 24 shall be subsections of the website section,‘Investment option information: environmental or social characteristics’;(b) in Articles 26 to 36, references to ‘financial product’ shall be replaced with ‘investment
option’.
3. By way of derogation from paragraphs 1 and 2, financial market participants may provide
the information referred to in paragraph 1 in respect of an investment option through a
hyperlink to the website section for that investment option published in accordance with
Article 24 of this Regulation, where applicable.
Article 49f
Website section ‘Investment option information: sustainable investment objective’
1. In the website section ‘Investment option information: sustainable investment objective’as referred to in Article 49a, point (e), financial market participants shall identify each
investment option and publish the information referred to in Article 10(1) of Regulation
59

(EU) 2019/2088 and Articles 38 to 49 of this Regulation in respect of those investment
options in the same order and made up of the same sections as those referred to in Article37.
2. For the purposes of paragraph 1:(a) the sections referred to in Article 37 shall be subsections of the website section,‘Investment option information: sustainable investment objective’;(b) in Articles 38 to 49, references to ‘financial product’ shall be replaced with ‘investment
option.
3. By way of derogation from paragraphs 1 and 2, financial market participants may provide
the information referred to in paragraph 1 in respect of an investment option through a
hyperlink to the website section for that investment option published in accordance with
Article 37 of this Regulation, where applicable.

SECTION 4
Website product disclosure for financial products with underlying options that all havesustainable investment as their objective
Article 49f
Website section for the disclosure of sustainability-related information about
financial products with underlying options that all have sustainable investment as
their objective
1. By way of derogation from Section 2, where a financial product offers investment options
to the investor and those investment options all have sustainable investment as theirobjective, financial market participants shall publish the information referred to in
Article 10(1) of Regulation (EU) 2019/2088 and Articles 49g to 49i of this Regulation in thefollowing order and made up of all of the following sections titled:(a)‘List of investment options that have sustainable investment as their objective’;(b)‘Summary’;(c)for each investment option, ‘Investment option information: sustainable investment
objective’.
2. For the purposes of this Section, the investment options shall not include those investment
options that qualify as the financial instruments referred to in points (1), (2) and (4) to (11) of
Section C, (1), (2) and (4) to (11) of Section C of Annex I to Directive 2014/65/EU.

60

Article 49g
Website section ‘List of investment options that have sustainable investment as theirobjective’
In the website section ‘List of investment options that qualify the financial product as having
sustainable investment as its objective’ referred to in Article 49f, point (a), financial market
participants shall list all the investment options.
Article 49h
Website section ‘Summary’ for financial products with underlying options that all
have sustainable investment as their objective
1. In the website section ‘Summary’ referred to in Article 49f, point (b), financial market
participants shall summarise the information contained in point (c) of that Article. The
summary section shall have a maximum length of two sides of A4-sized paper when printed.
2. The website section ‘Summary’ referred to in Article 49f, point (b), shall be provided in
at least the following languages:(a)one of the official languages of the home Member State and, where different andwhere the financial product is made available in more than one Member State, in an
additional language customary in the sphere of international finance;(b)where the financial product is made available in a host Member State, one of theofficial languages of that host Member State.
Article 49i
Website section ‘Investment option information: sustainable investment objective’ forfinancial products with underlying options that all have sustainable investment as
their objective
1. In the website section ‘Investment option information: sustainable investment objective’as referred to in Article 49f, point (c), financial market participants shall identify each
investment option and publish the information referred to in Article 10(1) of Regulation(EU) 2019/2088 and Articles 38 to 49 of this Regulation in respect of those investment
options in the same order and made up of the same sections as those referred to in Article37.
2. For the purposes of paragraph 1:(a) the sections referred to in Article 37 shall be subsections of the website section,‘Investment option information: sustainable investment objective’;61

(b) in Articles 38 to 49, references to ‘financial product’ shall be replaced with ‘investment
option.
3. By way of derogation from paragraphs 1 and 2, financial market participants may provide
the information referred to in paragraph 1 in respect of an investment option through a
hyperlink to the website section for that investment option published in accordance with
Article 37 of this Regulation, where applicable.’;(22) Article 51 is replaced by the following:‘Article 51
Attainment of the environmental or social characteristics promoted by thefinancial products‘In the section ‘To what extent were the environmental and/or social characteristics of thisproduct met?’ in the template set out in Annex IV to this Regulation, financial market
participants shall provide all of the following information:(a) the extent to which the environmental or social characteristics promoted by the financial
product were met during the period covered by the periodic report, including theperformance of the sustainability indicators used to measure how each of thoseenvironmental or social characteristics are met and which derivatives, if any, have been used
to meet those environmental or social characteristics;(b) for the financial products referred to in Article 6, first paragraph, of Regulation (EU)2020/852, an identification of the environmental objectives set out in Article 9 of that
Regulation to which the sustainable investment underlying the financial product contributed;(c) where the financial market participant has provided at least one previous periodic reportin accordance with this Section for the financial product, a historical comparison between
the period covered by the periodic report and periods covered by previous periodic reports;(d)for financial products that included a commitment to make sustainable investments,
an explanation of how those investments have contributed to the sustainable investment
objectives referred to in Article 2, point (17), of Regulation (EU) 2019/2088;(e) information on principal adverse impacts on sustainability factors as referred to in thesection ‘How did this product consider the most significant negative impacts of its
investments on the environment and society (principal adverse impacts)’ in the template set
out in Annex IV to this Regulation.’;(23) the following Article 51a is inserted:‘Article 51a62‘Progress achieved towards the GHG emissions reduction target for financial
products that promote environmental or social characteristics
For financial products that set GHG emission reduction target in accordance with Article
14a(1), in the section ‘How much progress was achieved towards the financial product GHG
emission reduction target?’ in the template set out in Annex IV to this Regulation, financial
market participants shall provide all of the following information:(a)a comparison between the information published in the template set out in Annex II
to this Regulation on the GHG emission reduction target and the progress achieved towards
that target. The comparison shall be presented in the form of a table and shall include:(i) the baseline financed GHG emissions published in the template set out in Annex II to thisRegulation;(ii) intermediate and final GHG emission reduction targets published in the template set out
in Annex II to this Regulation and the progress achieved during the period covered by theperiodic report. Progress in terms of financed GHG emissions reduction shall be measuredin accordance with Article 14a(2) of this Regulation;(iii) investee companies’ GHG removals and storage published in the template set out inAnnex II to this Regulation and the progress achieved during the period covered by theperiodic report;(iv) investee companies’ and financial market participant’s carbon credits published in thetemplate set out in Annex II to this Regulation and the progress in terms of carbon credits
used by investee companies and by the financial market participant during the period
covered by the periodic report.
Where information on investee companies’ progress as regards GHG removals and storage
or carbon credits is not readily available, financial market participants shall provide detailsof the best efforts used to obtain the information either directly from investee companies, orby carrying out additional research, cooperating with third party data providers or external
experts or making reasonable assumptions and indicate that such information is notavailable;(b)
A description of how the implementation of the investment strategy contributed tothe achievement of the target and the description of amendments to the investment strategy
during the period covered by the periodic report;(c)Where the GHG emission reduction target has not been met, an explanation of whythat target has not been met, including the explanation of obstacles encountered and theextent to which it hampered progress towards the target(s), and a description of corrective
actions planned to meet the target.’;63

(24) Article 52 is replaced by the following:‘Article 52

Largest investments for financial products that promote environmental or social
characteristics
1. The section ‘What were the largest investments of this product?’ in the template set out
in Annex IV to this Regulation shall contain a list, in descending order of size, of the
fifteen investments constituting the largest proportion of investments of the financial
product during the period covered by the periodic report, including the sector andcountries in which those investments were made.
2. By way of derogation from paragraph 1, where the number of investments constituting

fifty percent of the investments of the financial product during the period covered by theperiodic report is less than fifteen, the section referred to in paragraph 1 shall contain alist of those investments, in descending order of size, including the sectors and countries
in which those investments were made.’;(25) the following Article 54a is inserted:‘Article 54a
Information on how the sustainable investments of the financial product do notsignificantly harm any of the sustainable objectives‘For financial products that included a commitment to make sustainable investments, inthe section ‘With regards to the sustainable investments of the product, how did they notcause significant harm to any environmental or social sustainable investment objective?’in the template set out in Annex IV to this Regulation, financial market participants shallprovide an explanation of how those investments have not harmed significantly any of
the objectives referred to in Article 2, point (17), of Regulation (EU) 2019/2088 during
the period covered by the periodic report, including all of the following:(i) how the indicators for adverse impacts in Table 1 of Annex I, and any relevant
indicators in Tables 2 and 3 of that Annex, were taken into account. Financial market
participants shall provide a concise explanation of how the thresholds to determine thatthe sustainable investments have not harmed significantly any sustainable investment
objective during the reference period were determined and provide a hyperlink to thesection on the website referred to in Article 26(2)(a) where further explanations and thethresholds are disclosed;(ii) whether the sustainable investment was aligned with the OECD Guidelines forMultinational Enterprises and the UN Guiding Principles on Business and Human
Rights, including the principles and rights set out in the eight fundamental conventions
64

identified in the Declaration of the International Labour Organisation on Fundamental
Principles and Rights at Work and the International Bill of Human Rights.’;(26) in Article 55, paragraph 1, the introductory sentence is replaced by the following:‘For financial products referred to in Article 6, first paragraph, of Regulation (EU)2020/852, financial market participants shall include in the section ‘What was the
proportion of EU Taxonomy investments?’ in the template set out in Annex IV all of thefollowing information:’;(27) Article 56 is replaced by the following:‘Article 56
Information for financial products that promote social characteristics
For financial products that promote environmental or social characteristics that included
a commitment in sustainable investments with a social objective, the section ‘What was
the share of socially sustainable investments?’ in the template set out in Annex IV shallcontain the share of those sustainable investments.’;(28) the following Articles 56a and 56b are inserted:‘Article 56a
Information on the investments of the financial product that do not promote
environmental or social characteristics
In the section ‘What investments are not in line with the product’s environmental or social
characteristics, what was their purpose and were there any minimum environmental orsocial safeguards?’ in the template set out in Annex IV to this Regulation, financial market
participants shall provide a description of the purpose of the investments of the financial
product that do not promote environmental or social characteristics during the period
covered by the periodic report, including a description of any minimum environmental orsocial safeguards and whether those investments are used for hedging, relate to cash held
as ancillary liquidity or are investments for which there are insufficient data.
Article 56b
Information on the actions taken to meet the environmental or social characteristics
promoted by the financial productIn the section ‘What actions have been taken to meet the environmental and/or social
characteristics during the reference period?’ in the template set out in Annex IV to thisRegulation, financial market participants shall provide a description of the actions taken
65during the period covered by the periodic report to meet the environmental or social
characteristics promoted by the financial product, including shareholder engagement as
referred to in Article 3g of Directive 2007/36/EC and any other engagement relating to theenvironmental or social characteristics promoted by the financial product.’(29) in Article 57, paragraph 1, the introductory sentence is replaced by the following:‘In the section ‘How did this product perform compared to the reference benchmark andhow was the benchmark monitored to ensure consistency with the environmental and/or
social characteristics of the product?’ in the template set out in Annex IV to thisRegulation, financial market participants shall, for financial products that promote
environmental or social characteristics, provide all of the following information:’;(30) Article 59 is replaced by the following:‘Article 59
Attainment of the sustainable investment objective of the financial productIn the section ‘To what extent was the sustainable investment objective of this productmet?’ in the template set out in Annex V, financial market participants shall provide allof the following information:(a)in the subsection ‘How did the indicators measuring the sustainable objectives of thisfinancial product perform?’ the extent to which the sustainable investment objective
was attained during the period covered by the periodic report, including theperformance of:(i) the sustainability indicators referred to in the subsection ‘How do you measure
how the sustainable investment objective of this product will be met?’ of the section‘What is the sustainable investment objective of this product?’ in the template set out
in Annex III to this Regulation;(ii) any derivatives referred to in the subsection ‘How does the use of derivatives
contribute to the sustainable investment objective?’ of the section ‘What is the asset
allocation and the minimum share of sustainable investments?’ in the template set
out in Annex III to this Regulation used to attain the sustainable investment
objective;(b)for the financial products referred to in Article 5, first paragraph, of Regulation (EU)2020/852, an identification of the environmental objectives set out in Article 9 ofthat Regulation to which the sustainable investment underlying the financial productcontributed;

66

(c)

for the financial products referred to in Article 9(3) of Regulation (EU) 2019/2088,
information on how the objective of a reduction in carbon emissions was alignedwith the Paris Agreement, containing a description of the contribution of the financial
product during the period covered by the periodic report to achieve the objectives of
the Paris Agreement, including in respect of an EU Climate Transition Benchmark
or EU Paris-aligned Benchmark, the ESG factors and criteria considered by the
benchmark administrator in accordance with Delegated Regulation (EU) 2020/1818;(d)where the financial market participants have provided at least one previous periodic
report in accordance with this Section for the financial product, a historicalcomparison between the current period covered by the periodic report and previous
periods;(e)an explanation of how the sustainable investments have contributed to a sustainable
investment objective;(f)

information on principal adverse impacts on sustainability factors as referred to in
the section ‘How did this product consider the most significant negative impacts of
its investments on the environment and society (principal adverse impacts)?’ in thetemplate set out in Annex V to this Regulation.’;(31) the following Article 59a is inserted:‘Article 59a
Progress achieved towards the GHG emissions reduction target for financial productsthat have sustainable investment as their objective
1. For financial products that set GHG emission reduction targets in accordance with Article
14a(1), in the section ‘How much progress was achieved towards the financial product GHG
emission reduction target?’ in the template set out in Annex V to this Regulation, financial
market participants shall provide all of the following information:(a)a comparison between the information published in the template set out in Annex III
to this Regulation on the GHG emission reduction target and the progress achieved
towards that target. The comparison shall be presented in the form of a table and shall
include:(i) the baseline financed GHG emissions published in the template set out in Annex
III to this Regulation;(ii) intermediate and final GHG emission reduction targets published in the template
set out in Annex III to this Regulation and the progress achieved during the period
covered by the periodic report. Progress in terms of financed GHG emissions
reduction shall be measured in accordance with the GHG accounting and reporting67

standard for the financial industry mentioned in [Section/Article] […] ofCommission Delegated Regulation (EU) …/… of … supplementing Directive (EU)2022/2464 of the European Parliament and the Council;(iii) investee companies’ GHG removals and storage published in the template set
out in Annex III to this Regulation and the progress in terms of investee companies’
GHG removals and storage deployed during the period covered by the periodic
report;(iv) investee companies’ and financial market participant’s carbon credits publishedin the template set out in Annex III to this Regulation and the progress in terms ofcarbon credits used by investee companies or by the financial market participant
during the period covered by the periodic report.
Where information on investee companies’ progress as regards GHG removals andstorage or carbon credits is not readily available, financial market participants shallprovide details of the best efforts used to obtain the information either directly frominvestee companies, or by carrying out additional research, cooperating with third
party data providers or external experts or making reasonable assumptions andindicate that such information is not available;(b)

A description of how the implementation of the investment strategy contributed tothe achievement of the target and the description of amendments to the investment
strategy during the period covered by the periodic report;(c)Where the GHG emission reduction target has not been met, an explanation of whythat target has not been met, including the explanation of obstacles encountered andthe extent to which it hampered progress towards the target(s), and a description ofcorrective actions planned to meet the target.’2.

By way of derogation from paragraph 1, for financial products referred to in Article
9(3) of Regulation (EU) 2019/2088 that use an EU Climate Transition Benchmark
or an EU Paris-aligned Benchmark as defined in Article 3, points (23a) and (23b) ofRegulation (EU) 2016/1011 to measure performance by tracking the return of thoseindices, financial market participants shall provide a hyperlink to information
disclosed by the benchmark administrator pursuant to Articles 13 and 27 of that
Regulation;(32) Article 60 is replaced by the following:‘Article 60
Largest investments for financial products that have sustainable investment as theirobjective68

1.

In the section ‘What were the largest investments of this product?’ in the template
set out in Annex V, financial market participants shall list, in descending order ofsize, the fifteen investments constituting the largest proportion of investments of thefinancial product during the period covered by the periodic report, including thesectors and countries of those investments.

2.

By way of derogation from paragraph 1, where the number of investments
constituting fifty percent of the investments of the financial product during the period
covered by the periodic report is less than fifteen, the section referred to in paragraph1 shall contain a list of those investments, in descending order of size, including thesectors and countries in which those investments were made.’;(33) Article 61 is replaced by the following:‘Article 61
Proportion of sustainable investments for financial products that have sustainable
investment as their objective
In the section ‘What was the proportion of sustainable investments?’ in the template set
out in Annex V, financial market participants shall provide all of the following
information:(a) the proportions of the investments of the financial product that contributed to thesustainable investment objective;(b) the proportion of investments during the period covered by the periodic report indifferent sectors and sub-sectors.
(c) an explanation of how the sustainable investments have not harmed significantly anyof the sustainable investment objectives during the period covered by the periodic
report, including all of the following:(i) how the indicators for adverse impacts in Table 1 of Annex I, and any relevant
indicators in Tables 2 and 3 of that Annex, were taken into account. Financial
market participants shall provide a concise explanation of how the thresholds todetermine that the sustainable investments have not harmed significantly any
sustainable investment objective during the reference period were determined andprovide a hyperlink to the section on the website referred to in Article 39(a) where
further explanations and the thresholds are disclosed;(ii) whether the sustainable investment was aligned with the OECD Guidelines forMultinational Enterprises and the UN Guiding Principles on Business and Human
Rights, including the principles and rights set out in the eight fundamental
conventions identified in the Declaration of the International Labour Organisation

69

on Fundamental Principles and Rights at Work and the International Bill of Human
Rights.’;(34) Article 62 is replaced by the following:‘Article 62
Information on environmentally sustainable investments for financial productswith the objective of sustainable investment
1. For the financial products referred to in Article 5, first paragraph, of Regulation (EU)2020/852, the section ‘What was the proportion of EU Taxonomy-related investments?’
in the template set out in Annex V shall contain all of the following information:(a) a breakdown in accordance with Article 55(1), point (a);(b) a description of the sustainable investments in environmentally sustainable economic
activities during the period covered by the periodic report, including:(i) the information in accordance with Article 55(1), point (b)(i);(ii) a graphical representation in the form of a bar chart in accordance with Article
55(1), point (b)(ii);(iii) a graphical representation in the form of a bar chart in accordance with Article
55(1), point (b)(iii);(iv) the information referred to in Article 15(3), point (b);(v) a breakdown in accordance with Article 55(1), point (b)(v);(vi) where the financial product invested in sustainable investments with anenvironmental objective but that are not environmentally sustainable economic
activities, a clear explanation of the reasons for doing so;(vii) where the financial market participant has provided at least one previous
periodic report in accordance with this Section for the financial product, a historicalcomparison of the degree to which the investments were made in environmentally
sustainable economic activities during the period covered by the periodic report andduring previous periods;(c) a narrative explanation in accordance with Article 55(1), point (b)(viii);

70

2. For the purposes of paragraph 1, point (b)(ii) and point (b)(iii), financial market
participants shall apply Article 55(2).’;(35) the following Articles 62a to 62c are inserted:‘Article 62a
Information for financial products having sustainable investments with a social
objective
For financial products having sustainable investments with a social objective, the section‘What was the share of socially sustainable investments?’ in the template set out in Annex
V shall contain the share of those sustainable investments.
‘Article 62b
Information on the investments that do not have a sustainable objective for financial
products with the objective of sustainable investments
In the section ‘What investments were not sustainable, what was their purpose and were
there any minimum environmental or social safeguards?’ in the template set out in Annex
V to this Regulation, financial market participants shall provide a description of the
purpose of the investments of the financial product that do not have a sustainable objective
during the period covered by the periodic report, including a description of any minimum
environmental or social safeguards and whether those investments are used for hedging,
relate to cash held as ancillary liquidity.’‘Article 62c
Information on the actions taken to attain the sustainable investment objective
In the section ‘What actions have been taken attain the sustainable investment objective
during the reference period?’ in the template set out in Annex V to this Regulation, financial
market participants shall provide a description of the actions taken during the period coveredby the periodic report to meet the environmental or social characteristics promoted by thefinancial product, including shareholder engagement as referred to in Article 3g of Directive
2007/36/EC and any other engagement relating to the sustainable investment objective of
the financial product.’(36)

in Article 63, paragraph 1, the introductory sentence is replaced by the following:‘1. In the section ‘How did this product perform compared to the reference sustainablebenchmark and how was the benchmark monitored to ensure consistency with thesustainable investment objective of the product?’ in the template set out in Annex V,
financial market participants shall, for financial products that have sustainable investment71

as their objective and for which an index has been designated as a reference benchmark,provide all of the following information:’;(37) in Article 64, paragraph 2, point (c) is replaced by the following:‘(c) the proportion of underlying assets of the financial product referred to in the section‘What was the proportion of investments that promote environmental and/or social
characteristics?’ in the template set out in Annex IV to this Regulation and in the section‘What was the proportion of sustainable investments?’ in the template set out in Annex V.’;(38) Articles 65 and 66 are replaced by the following:‘Article 65
Financial products with one or more underlying investment options that qualify thosefinancial products as financial products that promote environmental or social
characteristics
1. By way of derogation from Articles 50 to 57, where a financial product offers investment
options to the investor and one or more of those investment options qualify that financial
product as a financial product that promotes environmental or social characteristics, financial
market participants shall insert in the main body of the document or information referred toin Article 11(2) of Regulation (EU) 2019/2088 a prominent statement confirming all of thefollowing:(a)that the financial product promotes environmental or social characteristics;(b)that the attainment of those characteristics is subject to investing in at least one of
the investment options referred to in paragraph 2 of this Article and holding at least one ofthose options during the holding period of the financial product;(c)that further information related to those environmental or social characteristics isavailable in the annexes referred to in paragraph 2 of this Article.
2. Financial market participants shall provide all of the following information in annexes
to the document or information referred to in Article 11(2) of Regulation (EU) 2019/2088:(a)for each investment option invested in that promotes environmental or social
characteristics, the information referred to in Articles 50 to 57 of this Regulation;(b)for each investment option invested in that has sustainable investment as its
objective, the information referred to in Articles 58 to 63 of this Regulation.

72

3. Financial market participants shall present the information referred to in paragraph 2,
point (a), in the form of the template set out in Annex IV and the information referred to inparagraph 2, point (b), in the form of the template set out in Annex V. For this purpose,references to ‘product’ and ‘financial product’ in the template shall be replaced by‘investment option’.
4. By way of derogation from paragraph 2 and the second sentence of paragraph 3, wherea financial product offers a range of investment options to the investor such that the
information about those investment options cannot be provided in annexes to the document
or information referred to in Article 11(2) of Regulation (EU) 2019/2088 in a clear andconcise manner due to the number of annexes required, financial market participants may
provide the information referred to in paragraph 2 of this Article by including in the main
body of the document or information referred to in Article 11(2) of Regulation (EU)2019/2088 hyperlinks to the annexes referred to in paragraph 2.’
5. For the purposes of this Article, the investment options shall not include those investment
options that qualify as financial instruments according to points (1), (2) and (4) to (11) of
Section C, Annex I to Directive 2014/65/EU.
Article 66
Financial products with underlying investment options that all have sustainable
investment as their objectives
1. By way of derogation from Articles 58 to 63, where a financial product offers investment
options to the investor and all of those investment options have sustainable investment as
their objectives, financial market participants shall confirm in a prominent statement in themain body of the document or information referred to in Article 11(2) of Regulation (EU)2019/2088 that the financial product has as its objective sustainable investment and that the
information related to that objective is available in the annexes referred to in paragraph 2 ofthis Article.
2. Financial market participants shall provide the information referred to in Articles 58 to
63 in the annexes to the document or information referred to in Article 11(2) of Regulation(EU) 2019/2088 for each investment option that has sustainable investment as its objective.
3. Financial market participants shall present the information referred to in paragraph 2 in
the form of the template set out in Annex V. For this purpose, references to ‘product’ and‘financial product’ in the template shall be replaced by ‘investment option’.

46

Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets infinancial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (recast), OJ L 173
12.6.2014, p. 349.

73

4. By way of derogation from paragraph 2 and the second sentence of paragraph 3, wherea financial product offers a range of investment options to the investor such that the
information about those investment options cannot be provided in annexes to the document
or information referred to in Article 11(2) of Regulation (EU) 2019/2088 in a clear andconcise manner due to the number of annexes required, financial market participants may
provide the information referred to in paragraph 2 of this Article by including in the main
body of the document or information referred to in Article 11(2) of Regulation (EU)2019/2088 hyperlinks to the annexes referred to in paragraph 2.
5. For the purposes of this Article, the investment options shall not include those investment
options that qualify as financial instruments according to points (1), (2) and (4) to (11) of
Section C, (1), (2) and (4) to (11) of Section C of Annex I to Directive 2014/65/EU.';(39) Annexes I to V are replaced by Annexes I to V of this Regulation.
Article 2
Entry into force and application
1. This Regulation shall enter into force on the twentieth day following that of its publication in
the Official Journal of the European Union.
2. This Regulation shall apply from […].
This Regulation shall be binding in its entirety and directly applicable in all Member States.
Done at Brussels,

For the Commission
The President[For the Commission
On behalf of the President][Position]47

Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets infinancial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (recast), OJ L 173
12.6.2014, p. 349.

74

ANNEX I
Template principal adverse sustainability impacts statement
For the purposes of this Annex, the following definitions shall apply:(1)‘current value of investment’ means the value in EUR of the investment by the financial market participant in the investee company;(2)‘enterprise value’ means the sum, at fiscal year-end, of the market capitalisation of ordinary shares, the market capitalisation of preferredshares, and the book value of total debt and non-controlling interests, without the deduction of cash or cash equivalents;(3)‘scope 1, 2 and 3 GHG emissions’ means the scope of greenhouse gas emissions referred to in points (1)(e)(i) to (iii) of Annex III to Regulation(EU) 2016/1011 of the European Parliament and of the Council48;(4)‘current value of all investments’ means the value in EUR of the following investments of the financial market participant:i.

for financial market participants referred to in Article 2(1)(a) of Regulation (EU) 2019/2088, the following balance sheet items: holdings
in related undertakings, including participations (item R0090), equities (item R0100), bonds (item R0130), collective investment
undertakings (item R0180), derivatives (item R0190), deposits other than cash equivalents (item R0200), other investments (itemR0210), assets held for index-linked and unit-linked contracts (item R0220), loans and mortgages (item R0230), deposits to cedants(item R0350) and cash and cash equivalents (item R0410), as defined in Annex I to Commission Implementing Regulation (EU)2015/245249;

ii.

for financial market participants referred to in Article 2(1)(b) and (j) of Regulation (EU) 2019/2088, financial instruments and financial
contracts (including cash and cash equivalents) held as part of the activity of portfolio management as defined in Article 4(1), point (8),of Directive 2014/65/EU;

iii.

for financial market participants referred to in Article 2(1)(c) of Regulation (EU) 2019/2088, the following lines from the balance sheet:currency and deposits, debt securities, loans, equity, investment fund shares/units, pension fund reserves, financial derivatives, other48

Regulation (EU) 2016/1011 of the European Parliament and of the Council of 8 June 2016 on indices used as benchmarks in financial instruments and financial contracts
or to measure the performance of investment funds and amending Directives 2008/48/EC and 2014/17/EU and Regulation (EU) No 596/2014 (OJ L 171, 29.6.2016, p. 1).
49
Commission Implementing Regulation (EU) 2015/2452 laying down implementing technical standards with regard to the procedures, formats and templates of thesolvency and financial condition report in accordance with Directive 2009/138/EC of the European Parliament and of the Council (OJ L347, 31.12.205, p. 1285).

75

accounts receivable/payable, non-financial assets as referred to in Table 1a of Annex I of Regulation (EU) 2018/231 of the European
Central Bank50 and real estate property as referred to in Table 1 of Chapter 7 of Annex A to Regulation (EU) No 549/201351;
iv.

for financial market participants referred to in Article 2(1)(e), (g), (h) and (i) of Regulation (EU) 2019/2088, all assets under management
resulting from both collective and portfolio management activities;(5)‘companies active in the fossil fuel sector’ means companies that derive any revenues from exploration, mining, extraction, production,
processing, storage, refining or distribution, including transportation, storage and trade, of fossil fuels as defined in Article 2, point (62), ofRegulation (EU) 2018/1999 of the European Parliament and of the Council52, except for environmentally sustainable economic activities
referred to in Section 4.29 to 4.31 of Annexes I and II to Delegated Regulation (EU) 2021/2139;(6)‘energy consumption intensity’ means the ratio of energy consumption per unit of activity, output or any other metric of the investee company
to the total energy consumption of that investee company;(7)‘high impact climate sectors’ means the sectors listed in Sections A to H and Section L of Annex I to Regulation (EC) No 1893/2006 of theEuropean Parliament and of the Council53;(8)‘activities negatively affecting biodiversity-sensitive areas’ means activities that are characterised by all of the following:

50

(a)

those activities lead to the deterioration of natural habitats and the habitats of species and disturb the species for which a protected area
has been designated;(b)

for those activities, none of the conclusions, mitigation measures or impact assessments adopted pursuant to any of the following
Directives or national provisions or international standards that are equivalent to those Directives have been implemented:

Regulation (EU) 2018/231 of the European Central Bank of 26 January 2018 on statistical reporting requirements for pension funds (ECB/2018/2) (OJ L 45, 17.2.2018, p.

3).
51

Regulation (EU) No 549/2013 of the European Parliament and of the Council of 21 May 2013 on the European system of national and regional accounts in the European
Union (OJ L 174, 26.6.2013, p.1)
52
Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the Governance of the Energy Union and Climate Action, amending
Regulations (EC) No 663/2009 and (EC) No 715/2009 of the European Parliament and of the Council, Directives 94/22/EC, 98/70/EC, 2009/31/EC, 2009/73/EC, 2010/31/EU,
2012/27/EU and 2013/30/EU of the European Parliament and of the Council, Council Directives 2009/119/EC and (EU) 2015/652 and repealing Regulation (EU) No 525/2013 of
the European Parliament and of the Council (OJ L 328, 21.12.2018, p. 1).
53
Regulation (EC) No 1893/2006 of the European Parliament and of the Council of 20 December 2006 establishing the statistical classification of economic activities NACE
Revision 2 and amending Council Regulation (EEC) No 3037/90 as well as certain EC Regulations on specific statistical domains Text with EEA relevance (OJ L 393, 30.12.2006,
p. 1–39).

76

(i)

Directive 2009/147/EC of the European Parliament and of the Council54;(ii)

Council Directive 92/43/EEC55;(iii)
an Environmental Impact Assessment (EIA) as defined in Article 1(2), point (g), of Directive 2011/92/EU of the European
Parliament and of the Council56;(iv)
for activities located in third countries, conclusions, mitigation measures or impact assessments adopted in accordance withnational provisions or international standards that are equivalent to the Directives and impact assessments listed in points (i), (ii) and(iii);(9)‘biodiversity-sensitive areas’ means Natura 2000 network of protected areas, UNESCO World Heritage sites and Key Biodiversity Areas(‘KBAs’), as well as other protected areas, as referred to in Appendix D of Annex II to Commission Delegated Regulation (EU) 2021/213957;(10)‘emissions to water’ means direct emissions of priority substances as defined in Article 2(30) of Directive 2000/60/EC of the European
Parliament and of the Council58 and direct emissions of nitrates, phosphates and pesticides;(11)‘hazardous waste’ means hazardous waste as defined in Article 3(2) of Directive 2008/98/EC of the European Parliament and of the Council59;(12)‘radioactive waste’ means radioactive waste as defined in Article 3(7) of Council Directive 2011/70/Euratom60;(13)‘UN Guiding Principles’ means the Principles of the UN Guiding Principles on Business and Human Rights;(14)‘ILO Declaration’ means the International Labour Organization Declaration on Fundamental Principles and Rights at Work;54

Directive 2009/147/EC of the European Parliament and of the Council of 30 November 2009 on the conservation of wild birds (OJ L 20, 26.1.2010, p. 7).
Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora (OJ L 206, 22.7.1992, p. 7).
56
Directive 2011/92/EU of the European Parliament and of the Council of 13 December 2011 on the assessment of the effects of certain public and private projects on theenvironment (OJ L 026, 28.1.2012, p. 1).
57
Commission Delegated Regulation (EU) 2021/2139 of 4 June 2021 supplementing Regulation (EU) 2020/852 of the European Parliament and of the Council by establishing
the technical screening criteria for determining the conditions under which an economic activity qualifies as contributing substantially to climate change mitigation or climatechange adaptation and for determining whether that economic activity causes no significant harm to any of the other environmental objectives (OJ L 442, 9.12.2021, p. 1).
58
Directive 2000/60/EC of the European Parliament and of the Council of 23 October 2000 establishing a framework for Community action in the field of water policy (OJ L
327, 22.12.2000, p. 1).
59
Directive 2008/98/EC of the European Parliament and of the Council of 19 November 2008 on waste and repealing certain Directives (OJ L 312, 22.11.2008, p. 3).
60
Council Directive 2011/70/Euratom of 19 July 2011 establishing a Community framework for the responsible and safe management of spent fuel and radioactive waste(OJ L 199, 2.8.2011, p. 48).
55

77

(15)

‘pay’ means pay as defined in [point (a) of Article (3)(1) of] [Directive (EU) …/… of … of the European Parliament and of the Council [PayTransparency Directive]];(16)‘controversial weapons’ means anti-personnel mines, cluster munitions, chemical weapons and biological weapons;(17)‘adequate wage’ means adequate wage as defined in Appendix […] of Commission Delegated Regulation (EU) …/… of … supplementing
Directive (EU) 2022/2464 of the European Parliament and the Council – current ESRS S1];

(18)

‘nearly zero-energy building (NZEB)’means nearly zero-energy building as defined in point 2 of Article 2 of Directive 2010/31/EU of theEuropean Parliament and of the Council61;(19)‘primary energy (PE)’ means primary energy as defined in point 5 of Article 2 of Directive 2010/31/EU;(20)‘energy performance certificate (EPC)’ means energy performance certificate as defined in point 12 of Article 2 of Directive 2010/31/EU;(21)‘inorganic pollutants’ means emissions within or lower than the emission levels associated with the best available techniques (BAT-AEL) as
defined in Article 3, point (13) of Directive 2010/75/EU of the European Parliament and of the Council62, for the Large Volume Inorganic
Chemicals- Solids and Others industry;(22)‘air pollutants’ means direct emissions of sulphur dioxides (SO2), nitrogen oxides (NOx), non-methane volatile organic compounds (NMVOC),
and fine particulate matter (PM2,5) as defined in Article 3, points (5) to (8), of Directive (EU) 2016/2284 of the European Parliament and of
the Council63, ammonia (NH3) as referred to in that Directive and heavy metals (HM) as referred to in Annex I to that Directive;(23)‘areas of high water stress’ means regions where the percentage of total water withdrawn is high (40-80%) or extremely high (greater than80%) in the World Resources Institute’s (WRI) Water Risk Atlas tool “Aqueduct”;(24)‘ozone depleting substances’ mean substances listed in the Montreal Protocol on Substances that Deplete the Ozone Layer;(25)‘land degradation’ means land degradation means as defined in Article […] of Commission Delegated Regulation (EU) …/… of …
supplementing Directive (EU) 2022/2464 of the European Parliament and the Council – current ESRS E4];

61

Directive 2010/31/EU of the European Parliament and of the Council of 19 May 2010 on the energy performance of buildings (recast) (OJ L 153, 18.6.2010, p. 13).
Directive 2010/75/EU of the European Parliament and of the Council of 24 November 2010 on industrial emissions (integrated pollution prevention and control) (OJ L 334,
17.12.2010, p. 17).
Directive (EU) 2016/2284 of the European Parliament and of the Council of 14 December 2016 on the reduction of national emissions of certain atmospheric pollutants,
amending Directive 2003/35/EC and repealing Directive 2001/81/EC (Text with EEA relevance ), OJ L 344, 17.12.2016, p. 1–31
62

63

78

(26)

‘desertification’ means desertification as defined in Appendix […] of Commission Delegated Regulation (EU) …/… of … supplementing
Directive (EU) 2022/2464 of the European Parliament and the Council – current ESRS E4];

(27)

‘sustainable land/agriculture practices or policies’ means practices or policies in accordance with the meaning of ‘sustainable food system’ in
Article …/… in Regulation/Directive …/… [legislative proposal for a framework for a sustainable food system by the European Commission
due before the end of 2023 – see page 5 of COM(2020)381 “A Farm to Fork Strategy for a fair, healthy and environmentally-friendly foodsystem”];(28)‘sustainable oceans/seas practices or policies’ means practices or policies relating to oceans, seas, coasts and inland waters, including emerging
sectors and non-market goods and services, aimed at ensuring environmental, social and economic sustainability in the long term and which
are consistent with the sustainable development goals (SDGs) of the United Nations 2030 Agenda for Sustainable Development, and inparticular SDG 14 (‘Conserve and sustainably use the oceans, seas and marine resources for sustainable development’), and with Union
environmental legislation;(29)‘non-recycled waste’ means any waste not recycled within the meaning of ‘recycling’ in Article 3(17) of Directive 2008/98/EC;(30)‘protected area’ means the Natura 2000 network of protected areas set up in accordance with Directives 2009/147/EC and 92/43/EEC64 anddesignated areas in the European Environment Agency’s Common Database on Designated Areas (CDDA);(31)‘deforestation’ means the temporary or permanent human-induced conversion of forested land to non-forested land;(32)‘supplier code of conduct’ means publicly available code of conducts adopted by suppliers that include prevention policies against unsafe
working conditions child labour and forced labour;(33)‘whistleblower’ means ‘reporting person’ as defined in Article 5(7) of Directive (EU) 2019/1937 of the European Parliament and of theCouncil65;(34)‘human rights policy’ means a policy commitment approved at board level on human rights that the economic activities of the investee company
shall be in line with the UN Guiding Principles;64

Directive 2009/147/EC of the European Parliament and of the Council of 30 November 2009 on the conservation of wild birds (codified version) (OJ L 20, 26.1.2010, p.7)
and Council Directive 92/43/EEC of 21 May 1992 on the conservation of natural habitats and of wild fauna and flora (OJ L 206, 22.7.1993, p.7). All the information about theN2000 network is assembled and visualised through the N2000 network viewer.
65
Directive (EU) 2019/1937 of the European Parliament and of the Council of 23 October 2019 on the protection of persons who report breaches of Union law (OJ L305,
26.11.2019, p. 17).

79

(35)

‘child labour’ means child labour as defined in Appendix […] of Commission Delegated Regulation (EU) …/… of … supplementing Directive(EU) 2022/2464 of the European Parliament and the Council – current ESRS S1];

(36)

‘affected communities’ means affected communities as defined in Appendix […] of Commission Delegated Regulation (EU) …/… of …
supplementing Directive (EU) 2022/2464 of the European Parliament and the Council – current ESRS S3];(37)

‘corruption’ means ‘active corruption’ and ‘passive corruption’ as referred to in points (a) and (b) of Article 4(2) of Directive (EU) 2017/1371
of the European Parliament and of the Council66 and ‘active and passive corruption in the private sector’ as referred to in Article 2 of theCouncil Framework Decision 2003/568/JHA67 ;(38)‘persons with disabilities’ means persons with disabilities as defined in Appendix […] of Commission Delegated Regulation (EU) …/… of …
supplementing Directive (EU) 2022/2464 of the European Parliament and the Council – current ESRS S1];

(39)

‘severe human rights issues and incidents’ means severe human rights issues and incidents in accordance with Article [current AR 106of
Commission Delegated Regulation (EU) …/… of … supplementing Directive (EU) 2022/2464 of the European Parliament and the Council –current ESRS S1];

(40)

‘non-renewable energy sources’ means energy sources other than renewable energy sources;(41)‘renewable energy sources’ means the following renewable non-fossil sources: wind, solar (solar thermal and solar photovoltaic) andgeothermal energy, ambient energy, tide, wave and other ocean energy, hydropower, biomass, landfill gas, sewage treatment plant gas, andbiogas;(42)‘EU list of non-cooperative jurisdictions for tax purposes’ means the list of jurisdictions included in the applicable Council conclusions on therevised EU list of non-cooperative jurisdictions for tax purposes;(43)‘threatened species’ means endangered species, including flora and fauna, listed in the European Red List or the IUCN Red List, as referred
to in Section 7 of Annex II to Delegated Regulation (EU) 2021/2139;

66

Directive (EU) 2017/1371 of the European Parliament and of the Council of 5 July 2017 on the fight against fraud to the Union's financial interests by means of criminallaw (OJ L 198, 28.7.2017, p. 29).
67
Council Framework Decision 2003/568/JHA of 22 July 2003 on combating corruption in the private sector (OJ L 192, 31.7.2003, p. 54).

80

(44)

‘area of high biodiversity value outside protected areas’ means land with high biodiversity value as referred to in Article 7b(3) of Directive
98/70/EC of the European Parliament and of the Council68.

For the purposes of this Annex, the following formulas shall apply:‘GHG emissions’ shall be calculated in accordance with the following formula:(1)

For x: {1,2,3}
𝑛𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖∑(
× 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦 ′ 𝑠 𝑆𝑐𝑜𝑝𝑒(𝑥) 𝐺𝐻𝐺 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠𝑖 (𝑡𝐶𝑂2𝑒𝑞))
𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦 ′ 𝑠 𝑒𝑛𝑡𝑒𝑟𝑝𝑟𝑖𝑠𝑒 𝑣𝑎𝑙𝑢𝑒𝑖
𝑖=1𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠‘carbon footprint’ shall be calculated in accordance with the following formula:(2)

𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖∑𝑛𝑖=1 (× 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦′𝑠 𝑆𝑐𝑜𝑝𝑒 1, 2 𝑎𝑛𝑑 3 𝐺𝐻𝐺 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠𝑖 (𝑡𝐶𝑂2𝑒𝑞))
𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦 ′ 𝑠 𝑒𝑛𝑡𝑒𝑟𝑝𝑟𝑖𝑠𝑒 𝑣𝑎𝑙𝑢𝑒𝑖
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠‘GHG intensity of investee companies’ shall be calculated in accordance with the following formula:(3)𝑛𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖
𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦′𝑠 𝑆𝑐𝑜𝑝𝑒 1, 2 𝑎𝑛𝑑 3 𝐺𝐻𝐺 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠𝑖 (𝑡𝐶𝑂2𝑒𝑞)∑(
×)
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦 ′ 𝑠 €𝑀 𝑟𝑒𝑣𝑒𝑛𝑢𝑒𝑖
𝑖=1

𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
68

Directive 98/70/EC of the European Parliament and of the Council of 13 October 1998 relating to the quality of petrol and diesel fuels and amending Council Directive
93/12/EEC (OJ L 350, 28.12.1998, p. 58).

81

(4)

‘exposure to companies active in the fossil fuel sector’ shall be calculated in accordance with the following formula:∑𝑛𝑖=1(𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑎𝑐𝑡𝑖𝑣𝑒 𝑖𝑛 𝑡ℎ𝑒 𝑓𝑜𝑠𝑠𝑖𝑙 𝑓𝑢𝑒𝑙 𝑠𝑒𝑐𝑡𝑜𝑟)
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑎𝑐𝑡𝑖𝑣𝑒 𝑖𝑛 𝑡ℎ𝑒 𝑓𝑜𝑠𝑠𝑖𝑙 𝑓𝑢𝑒𝑙 𝑠𝑒𝑐𝑡𝑜𝑟(5)‘exposure to companies active in the coal sector’ shall be calculated in accordance with the following formula:∑𝑛𝑖=1(𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑎𝑐𝑡𝑖𝑣𝑒 𝑖𝑛 𝑡ℎ𝑒 𝑐𝑜𝑎𝑙 𝑠𝑒𝑐𝑡𝑜𝑟)
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑎𝑐𝑡𝑖𝑣𝑒 𝑖𝑛 𝑡ℎ𝑒 𝑐𝑜𝑎𝑙 𝑠𝑒𝑐𝑡𝑜𝑟(6)‘share of non-renewable energy consumption and production’ shall be calculated in accordance with the following formula:𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖a) 𝐸𝑛𝑒𝑟𝑔𝑦 𝑐𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 = ∑𝑛𝑖=1(𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
×𝑐𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 𝑜𝑓 𝑛𝑜𝑛−𝑟𝑒𝑛𝑒𝑤𝑎𝑏𝑙𝑒 𝑒𝑛𝑒𝑟𝑔𝑦 (𝑖𝑛 𝐺𝑊ℎ) 𝑏𝑦 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖
𝑐𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 𝑜𝑓 𝑒𝑛𝑒𝑟𝑔𝑦 (𝑖𝑛 𝐺𝑊ℎ) 𝑏𝑦 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖)𝑏) 𝐸𝑛𝑒𝑟𝑔𝑦 𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑜𝑛
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖
𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑜𝑛 𝑜𝑓 𝑛𝑜𝑛 − 𝑟𝑒𝑛𝑒𝑤𝑎𝑏𝑙𝑒 𝑒𝑛𝑒𝑟𝑔𝑦 (𝑖𝑛 𝐺𝑊ℎ) 𝑏𝑦 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖= ∑(×)
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑜𝑛 𝑜𝑓 𝑒𝑛𝑒𝑟𝑔𝑦 (𝑖𝑛 𝐺𝑊ℎ) 𝑏𝑦 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖𝑛𝑖=1𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(7)‘energy consumption intensity per high impact climate sector’ shall be calculated in accordance with the following formula:82

𝐹𝑜𝑟 𝛼 𝑖𝑛 {𝐴, 𝐵, 𝐶, 𝐷, 𝐸, 𝐹, 𝐺, 𝐻, 𝐿}
𝑛

= ∑(
𝑖=1

𝐸𝑛𝑒𝑟𝑔𝑦 𝑐𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 𝑖𝑛𝑡𝑒𝑛𝑠𝑖𝑡𝑦𝛼𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖
𝑒𝑛𝑒𝑟𝑔𝑦 𝑐𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖 𝑏𝑒𝑙𝑜𝑛𝑔𝑖𝑛𝑔 𝑡𝑜 𝑁𝐴𝐶𝐸(𝛼)(𝑖𝑛 𝐺𝑊ℎ)×)
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦 ′ 𝑠 €𝑀 𝑟𝑒𝑣𝑒𝑛𝑢𝑒𝑖 𝑏𝑒𝑙𝑜𝑛𝑔𝑖𝑛𝑔 𝑡𝑜 𝑁𝐴𝐶𝐸(𝛼)𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠 𝑏𝑒𝑙𝑜𝑛𝑔𝑖𝑛𝑔 𝑡𝑜 𝑁𝐴𝐶𝐸(𝛼)(8)‘activities negatively affecting biodiversity-sensitive areas’ shall be calculated in accordance with the following formula:∑𝑛𝑖=1(

𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑤𝑖𝑡ℎ 𝑠𝑖𝑡𝑒𝑠 𝑜𝑟 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑜𝑛𝑠 𝑙𝑜𝑐𝑎𝑡𝑒𝑑 𝑖𝑛 𝑜𝑟 𝑛𝑒𝑎𝑟 𝑡𝑜)𝑏𝑖𝑜𝑑𝑖𝑣𝑒𝑟𝑠𝑖𝑡𝑦 𝑠𝑒𝑛𝑠𝑖𝑡𝑖𝑣𝑒 𝑎𝑟𝑒𝑎𝑠 𝑤ℎ𝑒𝑟𝑒 𝑎𝑐𝑡𝑖𝑣𝑖𝑡𝑖𝑒𝑠 𝑜𝑓 𝑡ℎ𝑜𝑠𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑛𝑒𝑔𝑎𝑡𝑖𝑣𝑒𝑙𝑦 𝑎𝑓𝑓𝑒𝑐𝑡 𝑡ℎ𝑜𝑠𝑒 𝑎𝑟𝑒𝑎𝑠
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(9)‘emissions to water’ shall be calculated in accordance with the following formula:∑𝑛𝑖=1(

𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖
× 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦′𝑠 𝑡𝑜𝑛𝑛𝑒𝑠 𝑜𝑓 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠 𝑡𝑜 𝑤𝑎𝑡𝑒𝑟 𝑔𝑒𝑛𝑒𝑟𝑎𝑡𝑒𝑑𝑖 )𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦 ′ 𝑠 𝑒𝑛𝑡𝑒𝑟𝑝𝑟𝑖𝑠𝑒 𝑣𝑎𝑙𝑢𝑒𝑖
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(10)‘hazardous waste ratio’ and ‘radioactive waste ratio’ shall be calculated in accordance with the following formula:83∑𝑛𝑖=1(𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖
× 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦 ′ 𝑠 𝑡𝑜𝑛𝑛𝑒𝑠 𝑜𝑓 ℎ𝑎𝑧𝑎𝑟𝑑𝑜𝑢𝑠 𝑎𝑛𝑑 𝑟𝑎𝑑𝑖𝑜𝑎𝑐𝑡𝑖𝑣𝑒 𝑤𝑎𝑠𝑡𝑒 𝑔𝑒𝑛𝑒𝑟𝑎𝑡𝑒𝑑𝑖 )𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦 ′ 𝑠 𝑒𝑛𝑡𝑒𝑟𝑝𝑟𝑖𝑠𝑒 𝑣𝑎𝑙𝑢𝑒𝑖
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(11)‘violations of Organisation for Economic Cooperation and Development (OECD) Guidelines for Multinational Enterprises or the UN Guiding
Principles, including the principles and rights set out in the eight fundamental conventions identified in the ILO Declaration’ shall be calculated
in accordance with the following formula:∑𝑛𝑖=1(

𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑣𝑖𝑜𝑙𝑎𝑡𝑖𝑜𝑛 𝑜𝑓)𝑎𝑡 𝑙𝑒𝑎𝑠𝑡 𝑜𝑛𝑒 𝑖𝑛𝑡𝑒𝑟𝑛𝑎𝑡𝑖𝑜𝑛𝑎𝑙 𝑔𝑢𝑖𝑑𝑒𝑙𝑖𝑛𝑒𝑠 𝑜𝑟 𝑝𝑟𝑖𝑛𝑐𝑖𝑝𝑙𝑒𝑠
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠

where the international guidelines or principles are either OECD guidelines for multinational enterprises or the UN Guiding Principles, including
the principles and rights set out in the eight fundamental conventions identified in the ILO Declaration; and𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
(12)

∑𝑛𝑖=1

‘lack of processes and compliance mechanisms to monitor compliance with the OECD Guidelines for Multinational Enterprises or the UN
Guiding principles, including the principles and rights set out in the eight fundamental conventions identified in the ILO Declaration’ shall becalculated in accordance with the following formula:(𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑤𝑖𝑡ℎ 𝑛𝑜 𝑝𝑜𝑙𝑖𝑐𝑖𝑒𝑠 𝑡𝑜 𝑚𝑜𝑛𝑖𝑡𝑜𝑟 𝑐𝑜𝑚𝑝𝑙𝑖𝑎𝑛𝑐𝑒 𝑤𝑖𝑡ℎ𝑜𝑟 𝑛𝑜 𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 𝑔𝑟𝑖𝑒𝑣𝑎𝑛𝑐𝑒 𝑎𝑛𝑑 𝑐𝑜𝑚𝑝𝑙𝑎𝑖𝑛𝑡𝑠 ℎ𝑎𝑛𝑑𝑙𝑖𝑛𝑔 𝑚𝑒𝑐ℎ𝑎𝑛𝑖𝑠𝑚𝑠 𝑡𝑜 𝑎𝑑𝑑𝑟𝑒𝑠𝑠 𝑣𝑖𝑜𝑙𝑎𝑡𝑖𝑜𝑛𝑠 𝑜𝑓 𝑎𝑡 𝑙𝑒𝑎𝑠𝑡 𝑜𝑛𝑒 𝑖𝑛𝑡𝑒𝑟𝑛𝑎𝑡𝑖𝑜𝑛𝑎𝑙 𝑔𝑢𝑖𝑑𝑒𝑙𝑖𝑛𝑒 𝑜𝑟 𝑝𝑟𝑖𝑛𝑐𝑖𝑝𝑙𝑒)
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑚𝑒𝑛𝑡𝑠84where the international guideline or principle are either OECD guidelines for multinational enterprises or the UN Guiding Principles, including theprinciples and rights set out in the eight fundamental conventions identified in the ILO Declaration ; and𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(13)‘gender pay gap’ shall be calculated in accordance with the following formula:
𝐹𝑜𝑟 𝑒𝑎𝑐ℎ 𝑖 = 1, … , 𝑛
𝑝𝑎𝑦 𝑜𝑓 𝑚𝑎𝑙𝑒 𝑝𝑎𝑖𝑑 𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑒𝑠 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖()− 𝑝𝑎𝑦 𝑜𝑓 𝑓𝑒𝑚𝑎𝑙𝑒 𝑝𝑎𝑖𝑑 𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑒𝑠 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖
𝐺𝑒𝑛𝑑𝑒𝑟 𝑃𝑎𝑦 𝐺𝑎𝑝𝑖 = max{0;}𝑝𝑎𝑦 𝑜𝑓 𝑚𝑎𝑙𝑒 𝑝𝑎𝑖𝑑 𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑒𝑠 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖
𝑛

∑(
𝑖=1

𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖
× 𝐺𝑒𝑛𝑑𝑒𝑟 𝑃𝑎𝑦 𝐺𝑎𝑝𝑖 )𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠

𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(14)‘management and supervisory bodies gender diversity’ shall be calculated in accordance with the following formula:
𝑛

∑(
𝑖=1

𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖
𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑚𝑎𝑙𝑒 𝑏𝑜𝑎𝑟𝑑 𝑚𝑒𝑚𝑏𝑒𝑟𝑠 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖
×)𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠 𝑡𝑜𝑡𝑎𝑙 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑏𝑜𝑎𝑟𝑑 𝑚𝑒𝑚𝑏𝑒𝑟𝑠 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖
where board members mean members of management and supervisory bodies; and𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
85

(15)

‘amount of accumulated earnings in non-cooperative tax jurisdictions’ shall be calculated in accordance with the following formula:𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖× 𝑎𝑐𝑐𝑢𝑚𝑢𝑙𝑎𝑡𝑒𝑑 𝑒𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖∑ 𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑖=1
𝑓𝑟𝑜𝑚 𝑡ℎ𝑒 𝐸𝑈 𝑟𝑒𝑣𝑖𝑠𝑒𝑑 𝑙𝑖𝑠𝑡 𝑜𝑓 𝑛𝑜𝑛 − 𝑐𝑜𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑣𝑒 𝑗𝑢𝑟𝑖𝑑𝑖𝑐𝑡𝑖𝑜𝑛𝑠 𝑓𝑜𝑟 𝑡𝑎𝑥 𝑝𝑢𝑟𝑝𝑜𝑠𝑒𝑠)𝑛(𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑤ℎ𝑒𝑟𝑒 𝑡ℎ𝑒 𝑡𝑜𝑡𝑎𝑙 𝑐𝑜𝑛𝑠𝑜𝑙𝑖𝑑𝑎𝑡𝑒𝑑 𝑟𝑒𝑣𝑒𝑛𝑢𝑒 𝑜𝑛 𝑖𝑡𝑠 𝑏𝑎𝑙𝑎𝑛𝑐𝑒 𝑠ℎ𝑒𝑒𝑡 𝑑𝑎𝑡𝑒𝑓𝑜𝑟 𝑒𝑎𝑐ℎ 𝑜𝑓 𝑡ℎ𝑒 𝑙𝑎𝑠𝑡 𝑡𝑤𝑜 𝑐𝑜𝑛𝑠𝑒𝑐𝑢𝑡𝑖𝑣𝑒 𝑓𝑖𝑛𝑎𝑛𝑐𝑖𝑎𝑙 𝑦𝑒𝑎𝑟𝑠 𝑒𝑥𝑐𝑒𝑒𝑑𝑠 𝑡𝑜𝑡𝑎𝑙 𝑜𝑓 750𝑀€ 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(16)‘exposure to controversial weapons’ shall be calculated in accordance with the following formula:∑𝑛𝑖=1(𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛𝑣𝑜𝑙𝑣𝑒𝑑 𝑖𝑛 𝑡ℎ𝑒 𝑚𝑎𝑛𝑢𝑓𝑎𝑐𝑡𝑢𝑟𝑒 𝑜𝑟 𝑠𝑒𝑙𝑙𝑖𝑛𝑔 𝑜𝑓 𝑐𝑜𝑛𝑡𝑟𝑜𝑣𝑒𝑟𝑠𝑖𝑎𝑙 𝑤𝑒𝑎𝑝𝑜𝑛𝑠)𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠

𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(17)‘exposure to companies involved in the cultivation and production of tobacco’ shall be calculated in accordance with the following formula:∑𝑛𝑖=1(𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛𝑣𝑜𝑙𝑣𝑒𝑑 𝑖𝑛 𝑡ℎ𝑒 𝑐𝑢𝑙𝑡𝑖𝑣𝑎𝑡𝑖𝑜𝑛 𝑎𝑛𝑑 𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑜𝑛 𝑜𝑓 𝑡𝑜𝑏𝑎𝑐𝑐𝑜)
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(18)‘interference in the formation of trade unions or elections of worker representatives’ shall be calculated in accordance with the following
formula:86∑𝑛𝑖=1(𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑤𝑖𝑡ℎ𝑜𝑢𝑡 𝑐𝑜𝑚𝑚𝑖𝑡𝑚𝑒𝑛𝑡𝑠)
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
where investee companies without commitments means the investee companies without commitments on their non-interference in the formation of
trade unions or election of worker representatives; and𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(19)‘share of employees earning less than the adequate wage’ shall be calculated in accordance with the following formula:
𝑛

∑(
𝑖=1

𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖
𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑒𝑠 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖 𝑒𝑎𝑟𝑛𝑖𝑛𝑔 𝑙𝑒𝑠𝑠 𝑡ℎ𝑎𝑛 𝑡ℎ𝑒 𝑎𝑑𝑒𝑞𝑢𝑎𝑡𝑒 𝑤𝑎𝑔𝑒
×)𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑒𝑠 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(20)‘sovereign GHG intensity’ shall be calculated in accordance with the following formula:𝑛𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑠𝑜𝑣𝑒𝑟𝑒𝑖𝑔𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖 𝑐𝑜𝑢𝑛𝑡𝑟𝑦 ′ 𝑠 𝑆𝑐𝑜𝑝𝑒 1,2 𝑎𝑛𝑑 3 𝐺𝐻𝐺 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠𝑖 ( tCO2eq)∑(
×)
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑐𝑜𝑢𝑛𝑡𝑟𝑦 ′ 𝑠 𝐺𝐷𝑃𝑖
𝑖=1

𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑑𝑖𝑓𝑓𝑒𝑟𝑒𝑛𝑡 𝑠𝑜𝑣𝑒𝑟𝑒𝑖𝑔𝑛𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(21)‘investee countries subject to social violations’ shall be calculated in accordance with the following formula:∑𝑛𝑖=1(𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑢𝑛𝑡𝑟𝑦𝑖 𝑢𝑛𝑑𝑒𝑟 𝑖𝑛𝑣𝑒𝑠𝑡𝑖𝑔𝑎𝑡𝑖𝑜𝑛)
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠87𝑤ℎ𝑒𝑟𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑢𝑛𝑡𝑟𝑦𝑖 𝑢𝑛𝑑𝑒𝑟 𝑖𝑛𝑣𝑒𝑠𝑡𝑖𝑔𝑎𝑡𝑖𝑜𝑛 𝑚𝑒𝑎𝑛𝑠 𝑐𝑜𝑢𝑛𝑡𝑟𝑖𝑒𝑠 𝑢𝑛𝑑𝑒𝑟 𝑖𝑛𝑣𝑒𝑠𝑡𝑖𝑔𝑎𝑡𝑖𝑜𝑛 𝑓𝑜𝑟 𝑠𝑜𝑐𝑖𝑎𝑙 𝑣𝑖𝑜𝑙𝑎𝑡𝑖𝑜𝑛𝑠 𝑎𝑠 𝑟𝑒𝑓𝑒𝑟𝑟𝑒𝑑 𝑡𝑜 𝑖𝑛 𝑖𝑛𝑡𝑒𝑟𝑛𝑎𝑡𝑖𝑜𝑛𝑎𝑙
𝑡𝑟𝑒𝑎𝑡𝑖𝑒𝑠 𝑎𝑛𝑑 𝑐𝑜𝑛𝑣𝑒𝑛𝑡𝑖𝑜𝑛𝑠, 𝑈𝑛𝑖𝑡𝑒𝑑 𝑁𝑎𝑡𝑖𝑜𝑛𝑠 𝑝𝑟𝑖𝑛𝑐𝑖𝑝𝑙𝑒𝑠 𝑎𝑛𝑑 𝑤ℎ𝑒𝑟𝑒 𝑎𝑝𝑝𝑙𝑖𝑐𝑎𝑏𝑙𝑒 𝑛𝑎𝑡𝑖𝑜𝑛𝑎𝑙 𝑙𝑎𝑤𝑠 𝑜𝑟 𝑝𝑟𝑖𝑛𝑐𝑖𝑝𝑙𝑒𝑠; and𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑑𝑖𝑓𝑓𝑒𝑟𝑒𝑛𝑡 𝑠𝑜𝑣𝑒𝑟𝑒𝑖𝑔𝑛𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(22)‘exposure to fossil fuels through real estate assets’ shall be calculated in accordance with the following formula:∑𝑛𝑖=1(𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖 𝑖𝑛 𝑟𝑒𝑎𝑙 𝑒𝑠𝑡𝑎𝑡𝑒 𝑎𝑠𝑠𝑒𝑡𝑠 𝑖𝑛𝑣𝑜𝑙𝑣𝑒𝑑 𝑖𝑛 𝑡ℎ𝑒 𝑒𝑥𝑡𝑟𝑎𝑐𝑡𝑖𝑜𝑛, 𝑠𝑡𝑜𝑟𝑎𝑔𝑒, 𝑡𝑟𝑎𝑛𝑠𝑝𝑜𝑟𝑡 𝑜𝑟 𝑚𝑎𝑛𝑢𝑓𝑎𝑐𝑡𝑢𝑟𝑒 𝑜𝑓 𝑓𝑜𝑠𝑠𝑖𝑙 𝑓𝑢𝑒𝑙𝑠)
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑟𝑒𝑎𝑙 𝑒𝑠𝑡𝑎𝑡𝑒 𝑎𝑠𝑠𝑒𝑡𝑠 𝑖𝑛𝑣𝑜𝑙𝑣𝑒𝑑 𝑖𝑛 𝑡ℎ𝑒 𝑒𝑥𝑡𝑟𝑎𝑐𝑡𝑖𝑜𝑛, 𝑠𝑡𝑜𝑟𝑎𝑔𝑒 𝑜𝑟 𝑚𝑎𝑛𝑢𝑓𝑎𝑐𝑡𝑢𝑟𝑒 𝑜𝑓 𝑓𝑜𝑠𝑠𝑖𝑙 𝑓𝑢𝑒𝑙𝑠(23)‘inefficient real estate assets’ shall be calculated in accordance with the following formula:((𝑉𝑎𝑙𝑢𝑒 𝑜𝑓 𝑟𝑒𝑎𝑙 𝑒𝑠𝑡𝑎𝑡𝑒 𝑎𝑠𝑠𝑒𝑡𝑠 𝑏𝑢𝑖𝑙𝑡 𝑏𝑒𝑓𝑜𝑟𝑒 31.12.2020 𝑤𝑖𝑡ℎ 𝐸𝑃𝐶 𝑜𝑓 𝐶 𝑜𝑟 𝑏𝑒𝑙𝑜𝑤)+(𝑉𝑎𝑙𝑢𝑒 𝑜𝑓 𝑟𝑒𝑎𝑙 𝑒𝑠𝑡𝑎𝑡𝑒 𝑎𝑠𝑠𝑒𝑡𝑠 𝑏𝑢𝑖𝑙𝑡 𝑎𝑓𝑡𝑒𝑟 31.12.2020 𝑤𝑖𝑡ℎ 𝑃𝐸 𝑑𝑒𝑚𝑎𝑛𝑑 𝑏𝑒𝑙𝑜𝑤 𝑁𝑍𝐸𝐵 𝑖𝑛 𝐷𝑖𝑟𝑒𝑐𝑡𝑖𝑣𝑒 2010/31/𝐸𝑢))
𝑉𝑎𝑙𝑢𝑒 𝑜𝑓 𝑟𝑒𝑎𝑙 𝑒𝑠𝑡𝑎𝑡𝑒 𝑎𝑠𝑠𝑒𝑡𝑠 𝑟𝑒𝑞𝑢𝑖𝑟𝑒𝑑 𝑡𝑜 𝑎𝑏𝑖𝑑𝑒 𝑏𝑦 𝐸𝑃𝐶 𝑎𝑛𝑑 𝑁𝑍𝐸𝐵 𝑟𝑢𝑙𝑒𝑠(24)‘emissions of inorganic pollutants’ shall be calculated in accordance with the following formula:∑𝑛𝑖=1(

𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖
× 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦 ′ 𝑠 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠𝑜𝑓 𝑖𝑛𝑜𝑟𝑔𝑎𝑛𝑖𝑐 𝑝𝑜𝑙𝑙𝑢𝑡𝑎𝑛𝑡𝑠𝑖 (𝑖𝑛 𝑡𝑜𝑛𝑛𝑒𝑠))
𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦 ′ 𝑠 𝑒𝑛𝑡𝑒𝑟𝑝𝑟𝑖𝑠𝑒 𝑣𝑎𝑙𝑢𝑒𝑖
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
88

(25)

‘emissions of air pollutants’ shall be calculated in accordance with the following formula:∑𝑛𝑖=1(

𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖
× 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦 ′ 𝑠 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠 𝑜𝑓 𝑎𝑖𝑟 𝑝𝑜𝑙𝑙𝑢𝑡𝑎𝑛𝑡𝑠𝑖 (𝑖𝑛 𝑡𝑜𝑛𝑛𝑒𝑠))
𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦 ′ 𝑠 𝑒𝑛𝑡𝑒𝑟𝑝𝑟𝑖𝑠𝑒 𝑣𝑎𝑙𝑢𝑒𝑖
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(26)‘emissions of ozone-depleting substances’ shall be calculated in accordance with the following formula:𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖∑𝑛𝑖=1(× 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦 ′ 𝑠 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠 𝑜𝑓 𝑜𝑧𝑜𝑛𝑒 − 𝑑𝑒𝑝𝑙𝑒𝑡𝑖𝑛𝑔 𝑠𝑢𝑏𝑠𝑡𝑎𝑛𝑐𝑒𝑠𝑖 (𝑖𝑛 𝑡𝑜𝑛𝑛𝑒𝑠))
𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦 ′ 𝑠 𝑒𝑛𝑡𝑒𝑟𝑝𝑟𝑖𝑠𝑒 𝑣𝑎𝑙𝑢𝑒𝑖
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(27)‘investments in companies without carbon emission reduction initiatives’ shall be calculated in accordance with the following formula:∑𝑛𝑖=1(𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖 𝑤𝑖𝑡ℎ𝑜𝑢𝑡 𝑐𝑎𝑟𝑏𝑜𝑛 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛 𝑟𝑒𝑑𝑢𝑐𝑡𝑖𝑜𝑛 𝑖𝑛𝑡𝑖𝑎𝑡𝑖𝑣𝑒)
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 in the investments(28)‘breakdown of energy consumption by type of non-renewable sources of energy’ shall be calculated in accordance with the following formula:
𝑛

∑(
𝑖=1

𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖
𝑐𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 𝑜𝑓 𝑛𝑜𝑛 − 𝑟𝑒𝑛𝑒𝑤𝑎𝑏𝑙𝑒 𝑒𝑛𝑒𝑟𝑔𝑦 (𝑖𝑛 𝐺𝑊ℎ) 𝑡𝑦𝑝𝑒 𝑏𝑦 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖
×)𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑐𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 𝑜𝑓 𝑒𝑛𝑒𝑟𝑔𝑦 (𝑖𝑛 𝐺𝑊ℎ) 𝑏𝑦 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
89

(29)

‘water usage and recycling’ shall be calculated in accordance with the following formula:𝑛𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖
𝑎𝑚𝑜𝑢𝑛𝑡 𝑜𝑓 𝑤𝑎𝑡𝑒𝑟 𝑐𝑜𝑛𝑠𝑢𝑚𝑒𝑑 𝑏𝑦 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦 (𝑖𝑛 𝑐𝑢𝑏𝑖𝑐 𝑚𝑒𝑡𝑒𝑟𝑠)𝑖∑(×)
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦 ′ 𝑠 €𝑀 𝑟𝑒𝑣𝑒𝑛𝑢𝑒𝑖
𝑖=1

𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑛

∑(
𝑖=1

𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖
𝑎𝑚𝑜𝑢𝑛𝑡 𝑜𝑓 𝑤𝑎𝑡𝑒𝑟 𝑟𝑒𝑐𝑦𝑐𝑙𝑒𝑑 𝑎𝑛𝑑 𝑟𝑒𝑢𝑠𝑒𝑑 𝑏𝑦 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 (𝑖𝑛 𝑐𝑢𝑏𝑖𝑐 𝑚𝑒𝑡𝑒𝑟𝑠)𝑖×)
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑎𝑚𝑜𝑢𝑛𝑡 𝑜𝑓 𝑤𝑎𝑡𝑒𝑟 𝑐𝑜𝑛𝑠𝑢𝑚𝑒𝑑 𝑏𝑦 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠𝑖
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(30)‘investments in companies without water management policies’ shall be calculated in accordance with the following formula:∑𝑛𝑖=1 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑤𝑖𝑡ℎ𝑜𝑢𝑡 𝑤𝑎𝑡𝑒𝑟 𝑚𝑎𝑛𝑎𝑔𝑒𝑚𝑒𝑛𝑡 𝑝𝑜𝑙𝑖𝑐𝑖𝑒𝑠𝑖
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(31)‘exposure to areas of high-water stress’ shall be calculated in accordance with the following formula:∑𝑛𝑖=1((32)

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑤𝑖𝑡ℎ 𝑠𝑖𝑡𝑒𝑠 𝑙𝑜𝑐𝑎𝑡𝑒𝑑)𝑖𝑛 𝑎𝑟𝑒𝑎𝑠 𝑜𝑓 ℎ𝑖𝑔ℎ 𝑤𝑎𝑡𝑒𝑟 𝑠𝑡𝑟𝑒𝑠𝑠 𝑤𝑖𝑡ℎ𝑜𝑢𝑡 𝑎 𝑤𝑎𝑡𝑒𝑟 𝑚𝑎𝑛𝑎𝑔𝑒𝑚𝑒𝑛𝑡 𝑝𝑜𝑙𝑖𝑐𝑦𝑖
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠‘investments in companies producing pesticides and other agro-chemicals’ shall be calculated in accordance with the following formula:90

∑𝑛𝑖=1((33)

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑡ℎ𝑒 𝑎𝑐𝑡𝑖𝑣𝑖𝑡𝑖𝑒𝑠 𝑜𝑓 𝑤ℎ𝑖𝑐ℎ)𝑓𝑎𝑙𝑙 𝑢𝑛𝑑𝑒𝑟 𝐷𝑖𝑣𝑖𝑠𝑖𝑜𝑛 20.2 𝑜𝑓 𝐴𝑛𝑛𝑒𝑥 𝐼 𝑡𝑜 𝑅𝑒𝑔𝑢𝑙𝑎𝑡𝑖𝑜𝑛 (𝐸𝐶)𝑁𝑜 1893/2006𝑖𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠‘land degradation, desertification, soil sealing’ shall be calculated in accordance with the following formula:
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑡ℎ𝑒 𝑎𝑐𝑡𝑖𝑣𝑖𝑡𝑖𝑒𝑠 𝑜𝑓∑𝑛𝑖=1()
𝑤ℎ𝑖𝑐ℎ 𝑐𝑎𝑢𝑠𝑒 𝑙𝑎𝑛𝑑 𝑑𝑒𝑔𝑟𝑎𝑑𝑎𝑡𝑖𝑜𝑛, 𝑑𝑒𝑠𝑒𝑟𝑡𝑖𝑓𝑖𝑐𝑎𝑡𝑖𝑜𝑛 𝑜𝑟 𝑠𝑜𝑖𝑙 𝑠𝑒𝑎𝑙𝑖𝑛𝑔𝑖
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(34)‘investments in companies without sustainable land-agriculture practices or policies’ shall be calculated in accordance with the following
formula:∑𝑛𝑖=1(

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑤𝑖𝑡ℎ𝑜𝑢𝑡)
𝑠𝑢𝑠𝑡𝑎𝑖𝑛𝑎𝑏𝑙𝑒 𝑙𝑎𝑛𝑑 𝑜𝑟 𝑎𝑔𝑟𝑖𝑐𝑢𝑙𝑡𝑢𝑟𝑒 𝑝𝑟𝑎𝑐𝑡𝑖𝑐𝑒𝑠 𝑜𝑟 𝑝𝑜𝑙𝑖𝑐𝑖𝑒𝑠𝑖
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠

𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(35)‘investments in companies without sustainable oceans/seas practices or policies’ shall be calculated in accordance with the following formula:𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑤𝑖𝑡ℎ𝑜𝑢𝑡∑𝑛𝑖=1()
𝑠𝑢𝑠𝑡𝑎𝑖𝑛𝑎𝑏𝑙𝑒 𝑜𝑐𝑒𝑎𝑛𝑠 𝑜𝑟 𝑠𝑒𝑎𝑠 𝑝𝑟𝑎𝑐𝑡𝑖𝑐𝑒𝑠 𝑜𝑟 𝑝𝑜𝑙𝑖𝑐𝑖𝑒𝑠𝑖
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠

91

(36)

‘non-recycled waste ratio’ shall be calculated in accordance with the following formula:∑𝑛𝑖=1((37)

𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖
× 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦 ′ 𝑠 𝑡𝑜𝑛𝑛𝑒𝑠 𝑜𝑓 𝑛𝑜𝑛 − 𝑟𝑒𝑐𝑦𝑐𝑙𝑒𝑑 𝑤𝑎𝑠𝑡𝑒 𝑔𝑒𝑛𝑒𝑟𝑎𝑡𝑒𝑑𝑖 )𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦 ′ 𝑠 𝑒𝑛𝑡𝑒𝑟𝑝𝑟𝑖𝑠𝑒 𝑣𝑎𝑙𝑢𝑒𝑖
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠‘natural species and protected areas’ shall be calculated in accordance with the following formula:∑𝑛𝑖=1 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑤ℎ𝑜𝑠𝑒 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑜𝑛𝑠 𝑎𝑓𝑓𝑒𝑐𝑡 𝑡ℎ𝑟𝑒𝑎𝑡𝑒𝑑 𝑠𝑝𝑒𝑐𝑖𝑒𝑠𝑖
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑤𝑖𝑡𝑜𝑢𝑡 𝑎 𝑏𝑖𝑜𝑑𝑖𝑣𝑒𝑟𝑠𝑖𝑡𝑦 𝑝𝑟𝑜𝑡𝑒𝑐𝑡𝑖𝑜𝑛 𝑝𝑜𝑙𝑖𝑐𝑦
𝑐𝑜𝑣𝑒𝑟𝑖𝑛𝑔 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑜𝑛𝑎𝑙 𝑠𝑖𝑡𝑒𝑠 𝑜𝑤𝑛𝑒𝑑, 𝑙𝑒𝑎𝑠𝑒𝑑, 𝑚𝑎𝑛𝑎𝑔𝑒𝑑 𝑖𝑛 𝑜𝑟 𝑎𝑑𝑗𝑎𝑐𝑒𝑛𝑡 𝑡𝑜, 𝑎 𝑝𝑟𝑜𝑡𝑒𝑐𝑡𝑒𝑑)𝑎𝑟𝑒𝑎 𝑜𝑟 𝑎𝑛 𝑎𝑟𝑒𝑎 𝑜𝑓 ℎ𝑖𝑔ℎ 𝑑𝑖𝑣𝑒𝑟𝑠𝑖𝑡𝑦 𝑣𝑎𝑙𝑢𝑒 𝑜𝑢𝑡𝑠𝑖𝑑𝑒 𝑝𝑟𝑜𝑡𝑒𝑐𝑡𝑒𝑑 𝑎𝑟𝑒𝑎𝑠𝑖
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠∑𝑛𝑖=1((38)‘deforestation’ shall be calculated in accordance with the following formula:∑𝑛𝑖=1 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑤𝑖𝑡ℎ𝑜𝑢𝑡 𝑎 𝑝𝑜𝑙𝑖𝑐𝑦 𝑡𝑜 𝑎𝑑𝑑𝑟𝑒𝑠𝑠 𝑑𝑒𝑓𝑜𝑟𝑒𝑠𝑡𝑎𝑡𝑖𝑜𝑛𝑖
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(39)‘share of corporate debt securities not issued under Union legislation on environmentally sustainable bonds’ shall be calculated in accordancewith the following formula:92

∑𝑛𝑖=1(

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠 𝑖𝑛 𝑐𝑜𝑟𝑝𝑜𝑟𝑎𝑡𝑒 𝑑𝑒𝑏𝑡 𝑠𝑒𝑐𝑢𝑟𝑖𝑡𝑖𝑒𝑠 𝑛𝑜𝑡 𝑖𝑠𝑠𝑢𝑒𝑑 𝑢𝑛𝑑𝑒𝑟)
𝑈𝑛𝑖𝑜𝑛 𝑙𝑒𝑔𝑖𝑠𝑙𝑎𝑡𝑖𝑜𝑛 𝑜𝑛 𝑒𝑛𝑣𝑖𝑟𝑜𝑛𝑚𝑒𝑛𝑡𝑎𝑙𝑙𝑦 𝑠𝑢𝑠𝑡𝑎𝑖𝑛𝑎𝑏𝑙𝑒 𝑏𝑜𝑛𝑑𝑠𝑖
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑐𝑜𝑟𝑝𝑜𝑟𝑎𝑡𝑒 𝑑𝑒𝑏𝑡 𝑠𝑒𝑐𝑢𝑟𝑖𝑡𝑖𝑒𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑐𝑜𝑟𝑝𝑜𝑟𝑎𝑡𝑒 𝑑𝑒𝑏𝑡 𝑠𝑒𝑐𝑢𝑟𝑖𝑡𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(40)‘share of sovereign and supranational debt securities not issued under Union legislation on environmentally sustainable bonds’ shall becalculated in accordance with the following formula:∑𝑛𝑖=1(

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠 𝑖𝑛 𝑠𝑜𝑣𝑒𝑟𝑒𝑖𝑔𝑛 𝑎𝑛𝑑 𝑠𝑢𝑝𝑟𝑎𝑛𝑎𝑡𝑖𝑜𝑛𝑎𝑙 𝑑𝑒𝑏𝑡 𝑠𝑒𝑐𝑢𝑟𝑖𝑡𝑖𝑒𝑠 𝑛𝑜𝑡 𝑖𝑠𝑠𝑢𝑒𝑑 𝑢𝑛𝑑𝑒𝑟)
𝑈𝑛𝑖𝑜𝑛 𝑙𝑒𝑔𝑖𝑠𝑙𝑎𝑡𝑖𝑜𝑛 𝑜𝑛 𝑒𝑛𝑣𝑖𝑟𝑜𝑛𝑚𝑒𝑛𝑡𝑎𝑙𝑙𝑦 𝑠𝑢𝑠𝑡𝑎𝑖𝑛𝑎𝑏𝑙𝑒 𝑏𝑜𝑛𝑑𝑠𝑖
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑠𝑜𝑣𝑒𝑟𝑒𝑖𝑔𝑛 𝑎𝑛𝑑 𝑠𝑢𝑝𝑟𝑎𝑛𝑎𝑡𝑖𝑜𝑛𝑎𝑙 𝑑𝑒𝑏𝑡 𝑠𝑒𝑐𝑢𝑟𝑖𝑡𝑖𝑒𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑠𝑜𝑣𝑒𝑟𝑒𝑖𝑔𝑛 𝑎𝑛𝑑 𝑠𝑢𝑝𝑟𝑎𝑛𝑎𝑡𝑖𝑜𝑛𝑎𝑙 𝑑𝑒𝑏𝑡 𝑠𝑒𝑐𝑢𝑟𝑖𝑡𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(41)‘GHG emissions’ in real estate shall be calculated in accordance with the following formula:
𝐹𝑜𝑟 𝑥 = {1,2,3, 𝑇𝑜𝑡𝑎𝑙}
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛 𝑟𝑒𝑎𝑙 𝑒𝑠𝑡𝑎𝑡𝑒 𝑎𝑠𝑠𝑒𝑡𝑖∑(
× 𝑠𝑐𝑜𝑝𝑒(𝑥) 𝐺𝐻𝐺 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠 𝑔𝑒𝑛𝑒𝑟𝑎𝑡𝑒𝑑 𝑏𝑦 𝑟𝑒𝑎𝑙 𝑒𝑠𝑡𝑎𝑡𝑒 𝑎𝑠𝑠𝑒𝑡𝑖 (𝑡𝐶𝑂2𝑒𝑞)
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑟𝑒𝑎𝑙 𝑒𝑠𝑡𝑎𝑡𝑒 𝑎𝑠𝑠𝑒𝑡𝑖
𝑛𝑖=1

𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑟𝑒𝑎𝑙 𝑒𝑠𝑡𝑎𝑡𝑒 𝑎𝑠𝑠𝑒𝑡𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(42)‘energy consumption intensity’ shall be calculated in accordance with the following formula:
𝑛

∑(
𝑖=1

𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑟𝑒𝑎𝑙 𝑒𝑠𝑡𝑎𝑡𝑒 𝑎𝑠𝑠𝑒𝑡𝑖
𝑒𝑛𝑒𝑟𝑔𝑦 𝑐𝑜𝑛𝑠𝑢𝑚𝑝𝑡𝑖𝑜𝑛 (𝑖𝑛 𝐺𝑊ℎ) 𝑜𝑓 𝑟𝑒𝑎𝑙 𝑒𝑠𝑡𝑎𝑡𝑒 𝑎𝑠𝑠𝑒𝑡𝑖
×)𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠 𝑖𝑛 𝑟𝑒𝑎𝑙 𝑒𝑠𝑡𝑎𝑡𝑒 𝑎𝑠𝑠𝑒𝑡𝑠 𝑠𝑢𝑟𝑓𝑎𝑐𝑒 𝑎𝑟𝑒𝑎 𝑜𝑓 𝑟𝑒𝑎𝑙 𝑒𝑠𝑡𝑎𝑡𝑒 𝑎𝑠𝑠𝑒𝑡𝑖 (𝑖𝑛 𝑠𝑞𝑢𝑎𝑟𝑒 𝑚𝑒𝑡𝑒𝑟𝑠)
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑟𝑒𝑎𝑙 𝑒𝑠𝑡𝑎𝑡𝑒 𝑎𝑠𝑠𝑒𝑡𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠93‘waste production in operations’ shall be calculated in accordance with the following formula:(43)(𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑟𝑒𝑎𝑙 𝑒𝑠𝑡𝑎𝑡𝑒 𝑎𝑠𝑠𝑒𝑡 𝑛𝑜𝑡 𝑒𝑞𝑢𝑖𝑝𝑝𝑒𝑑 𝑤𝑖𝑡ℎ 𝑓𝑎𝑐𝑖𝑙𝑖𝑡𝑖𝑒𝑠 𝑓𝑜𝑟 𝑤𝑎𝑠𝑡𝑒 𝑠𝑜𝑟𝑡𝑖𝑛𝑔)𝑎𝑛𝑑 𝑛𝑜𝑡 𝑐𝑜𝑣𝑒𝑟𝑒𝑑 𝑏𝑦 𝑎 𝑤𝑎𝑠𝑡𝑒 𝑟𝑒𝑐𝑜𝑣𝑒𝑟𝑦 𝑜𝑟 𝑟𝑒𝑐𝑦𝑐𝑙𝑖𝑛𝑔 𝑐𝑜𝑛𝑡𝑟𝑎𝑐𝑡𝑖∑
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠 𝑖𝑛 𝑟𝑒𝑎𝑙 𝑒𝑠𝑡𝑎𝑡𝑒 𝑎𝑠𝑠𝑒𝑡𝑠𝑛𝑖=1

𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑟𝑒𝑎𝑙 𝑒𝑠𝑡𝑎𝑡𝑒 𝑎𝑠𝑠𝑒𝑡𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠‘raw materials consumption for new construction and major renovations’ shall be calculated in accordance with the following formula:

(44)

𝑛

𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑛𝑒𝑤𝑙𝑦 𝑐𝑜𝑛𝑠𝑡𝑟𝑢𝑐𝑡𝑒𝑑 𝑜𝑟 𝑟𝑒𝑛𝑜𝑣𝑎𝑡𝑒𝑑 𝑟𝑒𝑎𝑙 𝑒𝑠𝑡𝑎𝑡𝑒 𝑎𝑠𝑠𝑒𝑡𝑖
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑛𝑒𝑤𝑙𝑦 𝑐𝑜𝑛𝑠𝑡𝑟𝑢𝑐𝑡𝑒𝑑 𝑜𝑟 𝑟𝑒𝑛𝑜𝑣𝑎𝑡𝑒𝑑 𝑟𝑒𝑎𝑙 𝑒𝑠𝑡𝑎𝑡𝑒 𝑎𝑠𝑠𝑒𝑡𝑠
𝑖=1
𝑊𝑒𝑖𝑔ℎ𝑡 𝑜𝑓 𝑟𝑎𝑤 𝑏𝑢𝑖𝑙𝑑𝑖𝑛𝑔 𝑚𝑎𝑡𝑒𝑟𝑖𝑎𝑙𝑠 𝑏𝑦 𝑟𝑒𝑎𝑙 𝑒𝑠𝑡𝑎𝑡𝑒 𝑎𝑠𝑠𝑒𝑡 (𝑖𝑛 𝑡𝑜𝑛𝑛𝑒𝑠)𝑖×)
𝑊𝑒𝑖𝑔ℎ𝑡 𝑜𝑓 𝑏𝑢𝑖𝑙𝑑𝑖𝑛𝑔 𝑚𝑎𝑡𝑒𝑟𝑖𝑎𝑙𝑠 𝑏𝑦 𝑟𝑒𝑎𝑙 𝑒𝑠𝑡𝑎𝑡𝑒 𝑎𝑠𝑠𝑒𝑡 (𝑖𝑛 𝑡𝑜𝑛𝑛𝑒𝑠)𝑖∑(𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑛𝑒𝑤 𝑐𝑜𝑛𝑠𝑡𝑟𝑢𝑐𝑡𝑖𝑜𝑛 𝑜𝑟 𝑚𝑎𝑗𝑜𝑟 𝑟𝑒𝑛𝑜𝑣𝑎𝑡𝑖𝑜𝑛𝑠 𝑜𝑓 𝑟𝑒𝑎𝑙 𝑒𝑠𝑡𝑎𝑡𝑒 𝑎𝑠𝑠𝑒𝑡𝑠‘land artificialisation’ shall be calculated in accordance with the following formula:

(45)
𝑛

∑(
𝑖=1

𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑟𝑒𝑎𝑙 𝑒𝑠𝑡𝑎𝑡𝑒 𝑎𝑠𝑠𝑒𝑡𝑖
𝑛𝑜𝑛 𝑣𝑒𝑔𝑒𝑡𝑎𝑡𝑒𝑑 𝑠𝑢𝑟𝑓𝑎𝑐𝑒 𝑎𝑟𝑒𝑎 𝑜𝑓 𝑟𝑒𝑎𝑙 𝑒𝑠𝑡𝑎𝑡𝑒 𝑎𝑠𝑠𝑒𝑡𝑖 (𝑖𝑛 𝑠𝑞𝑢𝑎𝑟𝑒 𝑚𝑒𝑡𝑒𝑟𝑠)×)𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠 𝑖𝑛 𝑟𝑒𝑎𝑙 𝑒𝑠𝑡𝑎𝑡𝑒 𝑎𝑠𝑠𝑒𝑡𝑠
𝑠𝑢𝑟𝑓𝑎𝑐𝑒 𝑎𝑟𝑒𝑎 𝑜𝑓 𝑟𝑒𝑎𝑙 𝑒𝑠𝑡𝑎𝑡𝑒 𝑎𝑠𝑠𝑒𝑡𝑖 (𝑖𝑛 𝑠𝑞𝑢𝑎𝑟𝑒 𝑚𝑒𝑡𝑒𝑟𝑠)
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑟𝑒𝑎𝑙 𝑒𝑠𝑡𝑎𝑡𝑒 𝑎𝑠𝑠𝑒𝑡𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(46)‘investments in companies without workplace accident prevention policies or management systems’ shall be calculated in accordance with thefollowing formula:94

𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑤𝑖𝑡ℎ 𝑛𝑜 𝑝𝑢𝑏𝑙𝑖𝑐𝑙𝑦 𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 𝑝𝑜𝑙𝑖𝑐𝑦 𝑜𝑟 𝑚𝑎𝑛𝑎𝑔𝑒𝑚𝑒𝑛𝑡 𝑠𝑦𝑠𝑡𝑒𝑚 𝑖𝑛 𝑝𝑙𝑎𝑐𝑒 𝑝𝑟𝑒𝑣𝑒𝑛𝑡𝑖𝑛𝑔 𝑎𝑐𝑐𝑖𝑑𝑒𝑛𝑡𝑠∑𝑛𝑖=1(
𝑡ℎ𝑎𝑡 𝑜𝑐𝑐𝑢𝑟 𝑎𝑠 𝑝𝑎𝑟𝑡 𝑜𝑓 𝑡ℎ𝑒 𝑒𝑥𝑒𝑟𝑐𝑖𝑠𝑒 𝑜𝑓 𝑙𝑎𝑏𝑜𝑢𝑟 𝑎𝑐𝑡𝑖𝑣𝑖𝑡𝑖𝑒𝑠𝑖 )𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(47)‘rate of recordable work-related injuries’ shall be calculated in accordance with the following formula:𝑛𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦 ′ 𝑠 𝑟𝑎𝑡𝑒 𝑜𝑓 𝑟𝑒𝑐𝑜𝑟𝑑𝑎𝑏𝑙𝑒 𝑤𝑜𝑟𝑘 𝑟𝑒𝑙𝑎𝑡𝑒𝑑 𝑖𝑛𝑗𝑢𝑟𝑖𝑒𝑠
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖∑(×
𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦 ′ 𝑠 €𝑀 𝑟𝑒𝑣𝑒𝑛𝑢𝑒
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑖=1
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠; 𝑎𝑛𝑑𝑤ℎ𝑒𝑟𝑒 𝑟𝑎𝑡𝑒 𝑜𝑓 𝑟𝑒𝑐𝑜𝑟𝑑𝑎𝑏𝑙𝑒 𝑤𝑜𝑟𝑘 𝑟𝑒𝑙𝑎𝑡𝑒𝑑 𝑖𝑛𝑗𝑢𝑟𝑖𝑒𝑠 =𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑎𝑐𝑐𝑖𝑑𝑒𝑛𝑡𝑠 𝑜𝑐𝑐𝑢𝑟𝑖𝑛𝑔 𝑎𝑠 𝑝𝑎𝑟𝑡 𝑜𝑓 𝑡ℎ𝑒 𝑒𝑥𝑒𝑟𝑐𝑖𝑠𝑒 𝑜𝑓 𝑙𝑎𝑏𝑜𝑢𝑟 𝑎𝑐𝑡𝑖𝑣𝑖𝑡𝑖𝑒𝑠 𝑖𝑛 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖
𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑒𝑠 𝑖𝑛 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖(48)‘number of days lost to work-related injuries, accidents, ill health and fatalities’ shall be calculated in accordance with the following formula:𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠𝑛×∑ 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦 ′ 𝑠 𝑤𝑜𝑟𝑘𝑑𝑎𝑦𝑠 𝑙𝑜𝑠𝑡 𝑡𝑜 𝑤𝑜𝑟𝑘 − 𝑟𝑒𝑙𝑎𝑡𝑒𝑑 𝑖𝑛𝑗𝑢𝑟𝑖𝑒𝑠, 𝑎𝑐𝑐𝑖𝑑𝑒𝑛𝑡𝑠, 𝑖𝑙𝑙 ℎ𝑒𝑎𝑙𝑡ℎ𝑖=1
𝑎𝑛𝑑 𝑓𝑎𝑡𝑎𝑙𝑖𝑡𝑖𝑒𝑠
𝑜𝑐𝑐𝑢𝑟𝑖𝑛𝑔 𝑎𝑠 𝑝𝑎𝑟𝑡 𝑜𝑓 𝑡ℎ𝑒 𝑒𝑥𝑒𝑟𝑐𝑖𝑠𝑒 𝑜𝑓 𝑙𝑎𝑏𝑜𝑢𝑟 𝑎𝑐𝑡𝑖𝑣𝑖𝑡𝑖𝑒𝑠𝑖 )(𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(49)‘lack of supplier code of conduct’ shall be calculated in accordance with the following formula:95

∑𝑛𝑖=1(𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑤𝑖𝑡ℎ𝑜𝑢𝑡 𝑠𝑢𝑝𝑝𝑙𝑖𝑒𝑟 𝑐𝑜𝑑𝑒 𝑜𝑓 𝑐𝑜𝑛𝑑𝑢𝑐𝑡𝑖 )𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠

𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
(50)

∑𝑛𝑖=1

‘lack of grievance/complaints handling mechanism to report alleged cases of discrimination related to employee matters’ shall be calculated
in accordance with the following formula:(𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑤𝑖𝑡ℎ 𝑛𝑜 𝑔𝑟𝑖𝑒𝑣𝑎𝑛𝑐𝑒 𝑎𝑛𝑑 𝑐𝑜𝑚𝑝𝑎𝑖𝑛𝑡𝑠 ℎ𝑎𝑛𝑑𝑙𝑖𝑛𝑔 𝑚𝑒𝑐ℎ𝑎𝑛𝑖𝑠𝑚𝑠 𝑡𝑜 𝑟𝑒𝑝𝑜𝑟𝑡 𝑎𝑙𝑙𝑒𝑔𝑒𝑑 𝑐𝑎𝑠𝑒𝑠 𝑜𝑓
𝑑𝑖𝑠𝑐𝑟𝑖𝑚𝑖𝑛𝑎𝑡𝑖𝑜𝑛 𝑟𝑒𝑙𝑎𝑡𝑒𝑑 𝑡𝑜
𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑒 𝑚𝑎𝑡𝑡𝑒𝑟𝑠)
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(51)‘insufficient whistleblower protection’ shall be calculated in accordance with the following formula:∑𝑛𝑖=1 𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑤𝑖𝑡ℎ𝑜𝑢𝑡 𝑤ℎ𝑖𝑠𝑡𝑙𝑒𝑏𝑙𝑜𝑤𝑒𝑟 𝑝𝑟𝑜𝑡𝑒𝑐𝑡𝑖𝑜𝑛 𝑝𝑜𝑙𝑖𝑐𝑦
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(52) ‘incidents of discrimination related to any type of discrimination leading to monetary and non-monetary sanctions’ shall be calculated inaccordance with the following formula:96

𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠∑
×
𝑛𝑢𝑚𝑏𝑒𝑟𝑜𝑓𝑖𝑛𝑐𝑖𝑑𝑒𝑛𝑡𝑠
𝑟𝑒𝑙𝑎𝑡𝑖𝑛𝑔
𝑡𝑜 𝑎𝑛𝑦 𝑡𝑦𝑝𝑒 𝑜𝑓 𝑑𝑖𝑠𝑐𝑟𝑖𝑚𝑖𝑛𝑎𝑡𝑖𝑜𝑛
𝑖=1
𝑙𝑒𝑎𝑑𝑖𝑛𝑔 𝑡𝑜 𝑚𝑜𝑛𝑒𝑡𝑎𝑟𝑦 𝑎𝑛𝑑 𝑛𝑜𝑛 𝑚𝑜𝑛𝑒𝑡𝑎𝑟𝑦 𝑠𝑎𝑛𝑐𝑡𝑖𝑜𝑛𝑠 𝑖𝑛 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖 )𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑛

(53)

(

‘excessive CEO pay ratio’ shall be calculated in accordance with the following formula:
𝑛

∑(
𝑖=1

𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖
𝑡𝑜𝑡𝑎𝑙 𝑎𝑛𝑛𝑢𝑎𝑙 𝑐𝑜𝑚𝑝𝑒𝑛𝑠𝑎𝑡𝑖𝑜𝑛 𝑜𝑓 ℎ𝑖𝑔ℎ𝑒𝑠𝑡 𝑝𝑎𝑖𝑑 𝑖𝑛𝑑𝑖𝑣𝑖𝑑𝑢𝑎𝑙 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖
×)𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠 𝑚𝑒𝑑𝑖𝑎𝑛 𝑎𝑛𝑛𝑢𝑎𝑙 𝑡𝑜𝑡𝑎𝑙 𝑐𝑜𝑚𝑝𝑒𝑛𝑠𝑎𝑡𝑖𝑜𝑛 𝑓𝑜𝑟 𝑎𝑙𝑙 𝑜𝑡ℎ𝑒𝑟 𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑒𝑠 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(54)‘excessive non-guaranteed-hour employees in investee companies’ shall be calculated in accordance with the following formula:
𝑛

∑(
𝑖=1

𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖
𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑛𝑜𝑛 − 𝑔𝑢𝑎𝑟𝑎𝑛𝑡𝑒𝑒𝑑 − ℎ𝑜𝑢𝑟 𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑒𝑠 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖
×)𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑒𝑠 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(55)‘excessive temporary contract employees in investee companies’ shall be calculated in accordance with the following formula:
𝑛

∑(
𝑖=1

𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖
𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑡𝑒𝑚𝑝𝑜𝑟𝑎𝑟𝑦 𝑐𝑜𝑛𝑡𝑟𝑎𝑐𝑡 𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑒𝑠 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖
×)𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑒𝑠 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(56)‘excessive non- employee workers in investee companies’ shall be calculated in accordance with the following formula:
97

𝑛

∑(
𝑖=1

𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖
𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑛𝑜𝑛 − 𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑒𝑠 𝑤𝑜𝑟𝑘𝑒𝑟𝑠 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖
×)𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑒𝑠 𝑎𝑛𝑑 𝑛𝑜𝑛 − 𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑒𝑠 𝑤𝑜𝑟𝑘𝑒𝑟𝑠 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(57)‘insufficient employment of persons with disabilities within the workforce’ shall be calculated in accordance with the following formula:
𝑛

∑(
𝑖=1

𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖
𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑝𝑒𝑟𝑠𝑜𝑛𝑠 𝑤𝑖𝑡ℎ 𝑑𝑖𝑠𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖
×)𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑒𝑠 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(58)‘lack of human rights policies’ shall be calculated in accordance with the following formula:∑𝑛𝑖=1 (𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑤𝑖𝑡ℎ𝑜𝑢𝑡 𝑎𝑑ℎ𝑒𝑟𝑒𝑛𝑐𝑒 𝑡𝑜 𝑎 ℎ𝑢𝑚𝑎𝑛 𝑟𝑖𝑔ℎ𝑡𝑠 𝑝𝑜𝑙𝑖𝑐𝑦 )𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑝𝑜𝑟𝑡𝑓𝑜𝑙𝑖𝑜(59)‘lack of due diligence’ shall be calculated in accordance with the following formula:(𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑤𝑖𝑡ℎ 𝑛𝑜 𝑑𝑢𝑒 𝑑𝑖𝑙𝑖𝑔𝑒𝑛𝑐𝑒 𝑝𝑟𝑜𝑐𝑒𝑠𝑠 𝑐𝑙𝑒𝑎𝑟𝑙𝑦 𝑠𝑡𝑖𝑝𝑢𝑙𝑎𝑡𝑖𝑛𝑔 ℎ𝑜𝑤ℎ𝑢𝑚𝑎𝑛
𝑟𝑖𝑔ℎ𝑡𝑠 𝑣𝑖𝑜𝑙𝑎𝑡𝑖𝑜𝑛𝑠 𝑎𝑛𝑑 𝑎𝑑𝑣𝑒𝑟𝑠𝑒 𝑖𝑚𝑝𝑎𝑐𝑡𝑠 𝑜𝑛 ℎ𝑢𝑚𝑎𝑛 𝑟𝑖𝑔ℎ𝑡𝑠 𝑎𝑟𝑒 𝑖𝑑𝑒𝑛𝑡𝑖𝑓𝑖𝑒𝑑, 𝑝𝑟𝑒𝑣𝑒𝑛𝑡𝑒𝑑, 𝑚𝑖𝑡𝑖𝑔𝑎𝑡𝑒𝑑 𝑎𝑛𝑑 𝑎𝑑𝑑𝑟𝑒𝑠𝑠𝑒𝑑 𝑖𝑛∑𝑛𝑖=1
𝑎𝑐𝑐𝑜𝑟𝑑𝑎𝑛𝑐𝑒 𝑤𝑖𝑡ℎ 𝑡ℎ𝑒 𝐼𝐿𝑂 𝐷𝑒𝑐𝑙𝑎𝑟𝑎𝑡𝑖𝑜𝑛 𝑛 𝐹𝑢𝑛𝑑𝑎𝑚𝑒𝑛𝑡𝑎𝑙 𝑃𝑟𝑖𝑛𝑐𝑖𝑝𝑙𝑒𝑠 𝑎𝑛𝑑 𝑅𝑖𝑔ℎ𝑡𝑠 𝑎𝑡 𝑊𝑜𝑟𝑘 𝑎𝑛𝑑 𝑡ℎ𝑒
𝑈𝑁 𝐺𝑢𝑖𝑑𝑖𝑛𝑔 𝑃𝑟𝑖𝑛𝑐𝑖𝑝𝑙𝑒𝑠 𝑜𝑛 𝐵𝑢𝑠𝑖𝑛𝑒𝑠𝑠 𝑎𝑛𝑑 𝐻𝑢𝑚𝑎𝑛 𝑟𝑖𝑔ℎ𝑡𝑠𝑖 )𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠

98

(60)

‘lack of processes and measures for preventing trafficking in human beings’ shall be calculated in accordance with the following formula:
∑𝑛𝑖=1

(61)

‘operations and suppliers using workforce qualifying as child labour’ shall be calculated in accordance with the following formula:
∑𝑛𝑖=1

(62)

(𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑒𝑥𝑝𝑜𝑠𝑒𝑑 𝑡𝑜 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑜𝑛𝑠 𝑎𝑛𝑑 𝑠𝑢𝑝𝑝𝑙𝑖𝑒𝑟𝑠 𝑢𝑠𝑖𝑛𝑔 𝑤𝑜𝑟𝑘𝑓𝑜𝑟𝑐𝑒 𝑞𝑢𝑎𝑙𝑖𝑓𝑦𝑖𝑛𝑔 𝑎𝑠𝑐ℎ𝑖𝑙𝑑 𝑙𝑎𝑏𝑜𝑢𝑟𝑖 )𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠‘operations and suppliers at significant risk of incidents of forced or compulsory labour’ shall be calculated in accordance with the following
formula:
∑𝑛𝑖=1

(63)

(𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑤𝑖𝑡ℎ 𝑛𝑜 𝑝𝑢𝑏𝑙𝑖𝑐𝑙𝑦 𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 𝑝𝑜𝑙𝑖𝑐𝑦 𝑖𝑛 𝑝𝑙𝑎𝑐𝑒 𝑡ℎ𝑎𝑡 𝑝𝑟𝑒𝑣𝑒𝑛𝑡𝑠
𝑡𝑟𝑎𝑓𝑓𝑖𝑐𝑘𝑖𝑛𝑔 𝑖𝑛 ℎ𝑢𝑚𝑎𝑛 𝑏𝑒𝑖𝑛𝑔𝑠 𝑐ℎ𝑎𝑖𝑛𝑖 )𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑒𝑥𝑝𝑜𝑠𝑒𝑑 𝑡𝑜 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑜𝑛𝑠 𝑎𝑛𝑑 𝑠𝑢𝑝𝑝𝑙𝑖𝑒𝑟𝑠
𝑎𝑡 𝑟𝑖𝑠𝑘 𝑜𝑓 𝑖𝑛𝑐𝑖𝑑𝑒𝑛𝑡𝑠 𝑜𝑓 𝑓𝑜𝑟𝑐𝑒𝑑 𝑜𝑟 𝑐𝑜𝑚𝑝𝑢𝑙𝑠𝑜𝑟𝑦 𝑙𝑎𝑏𝑜𝑢𝑟 𝑖𝑛 𝑡𝑒𝑟𝑚𝑠 𝑜𝑓 𝑔𝑒𝑜𝑔𝑟𝑎𝑝ℎ𝑖𝑐 𝑎𝑟𝑒𝑎𝑠 𝑎𝑛𝑑/𝑜𝑟 𝑡𝑦𝑝𝑒 𝑜𝑓 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑜𝑛𝑠 𝑖 )𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠‘number of identified cases of severe human rights issues and incidents’ shall be calculated in accordance with the following formula:𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖
× 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑠𝑒𝑣𝑒𝑟𝑒 ℎ𝑢𝑚𝑎𝑛 𝑟𝑖𝑔ℎ𝑡𝑠 𝑖𝑠𝑠𝑢𝑒𝑠 𝑎𝑛𝑑 𝑖𝑛𝑐𝑖𝑑𝑒𝑛𝑡𝑠 𝑐𝑜𝑛𝑛𝑒𝑐𝑡𝑒𝑑 𝑡𝑜 𝑡ℎ𝑒∑ 𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑖=1
𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦𝑖 )𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑛

(

99

(64)

‘lack of remediation mechanism for affected communities in relation to the operations of the investee companies’ shall be calculated inaccordance with the following formula:∑𝑛𝑖=1(𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑤𝑖𝑡ℎ 𝑎 𝑙𝑎𝑐𝑘 𝑜𝑓 𝑟𝑒𝑚𝑒𝑑𝑖𝑎𝑡𝑖𝑜𝑛 𝑚𝑒𝑐ℎ𝑎𝑛𝑖𝑠𝑚 𝑓𝑜𝑟 𝑎𝑓𝑓𝑒𝑐𝑡𝑒𝑑 𝑐𝑜𝑚𝑚𝑢𝑛𝑖𝑡𝑖𝑒𝑠 )𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠

(65)
∑𝑛𝑖=1

‘lack of remediation handling mechanism for consumers/end-users of the investee company’ shall be calculated in accordance with thefollowing formula:(𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑤𝑖𝑡ℎ𝑜𝑢𝑡 𝑎 𝑟𝑒𝑚𝑒𝑑𝑖𝑎𝑡𝑖𝑜𝑛 ℎ𝑎𝑛𝑑𝑙𝑖𝑛𝑔 𝑚𝑒𝑐ℎ𝑎𝑛𝑖𝑠𝑚 𝑓𝑜𝑟 𝑐𝑜𝑛𝑠𝑢𝑚𝑒𝑟𝑠 𝑜𝑟 𝑒𝑛𝑑 𝑢𝑠𝑒𝑟𝑠
𝑜𝑓 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦)
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(66)‘lack of anti-corruption and anti-bribery policies’ shall be calculated in accordance with the following formula:∑𝑛𝑖=1(𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑤𝑖𝑡ℎ𝑜𝑢𝑡 𝑎𝑛𝑡𝑖𝑐𝑜𝑟𝑟𝑢𝑝𝑡𝑖𝑜𝑛 𝑎𝑛𝑑 𝑎𝑛𝑡𝑖𝑏𝑟𝑖𝑏𝑒𝑟𝑦 𝑝𝑜𝑙𝑖𝑐𝑖𝑒𝑠)
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠

𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(67)‘cases of insufficient action taken to address breaches of standards of anti-corruption and anti-bribery’ shall be calculated in accordance withthe following formula:100∑𝑛𝑖=1((68)

𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑤𝑖𝑡ℎ 𝑖𝑑𝑒𝑛𝑡𝑖𝑓𝑖𝑒𝑑 𝑖𝑛𝑠𝑢𝑓𝑓𝑖𝑐𝑖𝑒𝑛𝑐𝑒𝑠 𝑖𝑛 𝑎𝑐𝑡𝑖𝑜𝑛𝑠 𝑡𝑎𝑘𝑒𝑛 𝑡𝑜 𝑎𝑑𝑑𝑟𝑒𝑠𝑠 𝑏𝑟𝑒𝑎𝑐ℎ𝑒𝑠)
𝑖𝑛 𝑖𝑛𝑡𝑒𝑟𝑛𝑎𝑡𝑖𝑜𝑛𝑎𝑙 𝑎𝑛𝑑 𝑛𝑎𝑡𝑖𝑜𝑛𝑎𝑙 𝑝𝑟𝑜𝑐𝑒𝑑𝑢𝑟𝑒𝑠 𝑎𝑛𝑑 𝑠𝑡𝑎𝑛𝑑𝑎𝑟𝑑𝑠 𝑜𝑓 𝑎𝑛𝑡𝑖𝑐𝑜𝑟𝑟𝑢𝑝𝑡𝑖𝑜𝑛 𝑎𝑛𝑑 𝑎𝑛𝑡𝑖𝑏𝑟𝑖𝑏𝑒𝑟𝑦 𝑖𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠‘number of convictions and amount of fines for violation of anti-corruption and anti-bribery laws’ shall be calculated in accordance with thefollowing formula:𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖
× 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑦 ′ 𝑠 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑐𝑜𝑛𝑣𝑖𝑐𝑡𝑖𝑜𝑛𝑠 𝑓𝑜𝑟∑
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑖=1 𝑣𝑖𝑜𝑙𝑎𝑡𝑖𝑜𝑛𝑠 𝑜𝑓 𝑎𝑛𝑡𝑖 − 𝑐𝑜𝑟𝑟𝑢𝑝𝑡𝑖𝑜𝑛 𝑎𝑛𝑑 𝑎𝑛𝑡𝑖 − 𝑏𝑟𝑖𝑏𝑒𝑟𝑦 𝑙𝑎𝑤𝑠 𝑎𝑐𝑐𝑜𝑟𝑑𝑖𝑛𝑔 𝑡𝑜 𝑖𝑛𝑡𝑒𝑟𝑛𝑎𝑡𝑖𝑜𝑛𝑎𝑙 𝑜𝑟 𝑛𝑎𝑡𝑖𝑜𝑛𝑎𝑙 𝑙𝑎𝑤𝑠)
𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑖(𝑛𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠∑
×
𝑡𝑜𝑡𝑎𝑙 𝑎𝑚𝑜𝑢𝑛𝑡 𝑜𝑓 𝑓𝑖𝑛𝑒𝑠 𝑓𝑜𝑟 𝑣𝑖𝑜𝑙𝑎𝑡𝑖𝑜𝑛𝑠 𝑜𝑓
𝑖=1𝑖𝑛𝑡𝑒𝑟𝑛𝑎𝑡𝑖𝑜𝑛𝑎𝑙 𝑜𝑟 𝑛𝑎𝑡𝑖𝑜𝑛𝑎𝑙 𝑎𝑛𝑡𝑖𝑐𝑜𝑟𝑟𝑢𝑝𝑡𝑖𝑜𝑛 𝑙𝑎𝑤𝑠 )𝑛(𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑚𝑝𝑎𝑛𝑖𝑒𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠(69)‘investments in non-cooperative tax jurisdictions’ shall be calculated in accordance with the following formula:𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡 𝑖𝑛 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑢𝑛𝑡𝑟𝑖𝑒𝑠 𝑜𝑟 𝑠𝑢𝑝𝑟𝑎𝑛𝑎𝑡𝑖𝑜𝑛𝑎𝑙𝑠 𝑜𝑛 𝑡ℎ𝑒 𝐸𝑈 𝑙𝑖𝑠𝑡 𝑜𝑓 𝑛𝑜𝑛𝑐𝑜𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑣𝑒 𝑗𝑢𝑟𝑖𝑠𝑑𝑖𝑐𝑡𝑖𝑜𝑛𝑠∑𝑛𝑖=1(
𝑓𝑜𝑟 𝑡𝑎𝑥 𝑝𝑢𝑟𝑝𝑜𝑠𝑒𝑠𝑖 )𝑐𝑢𝑟𝑟𝑒𝑛𝑡 𝑣𝑎𝑙𝑢𝑒 𝑜𝑓 𝑎𝑙𝑙 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠
𝑤ℎ𝑒𝑟𝑒 𝑛 𝑖𝑠 𝑡ℎ𝑒 𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑖𝑛𝑣𝑒𝑠𝑡𝑒𝑒 𝑐𝑜𝑢𝑛𝑡𝑟𝑖𝑒𝑠 𝑜𝑟 𝑠𝑢𝑝𝑟𝑎𝑛𝑎𝑡𝑖𝑜𝑛𝑎𝑙𝑠 𝑖𝑛 𝑡ℎ𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠

101

Table 1
Statement on principal adverse impacts of investment decisions on sustainability factors
Financial market participant [Name and, where available, LEI]
Summary[Name and, where available, LEI] considers principal adverse impacts of its investment decisions on sustainability factors. The present statement
is the consolidated statement on principal adverse impacts on sustainability factors of [name of the financial market participant] [whereapplicable, insert “and its subsidiaries, namely [list the subsidiaries included]”].
This statement on principal adverse impacts on sustainability factors covers the reference period from [insert “1 January” or the date on whichprincipal adverse impacts were first considered] to 31 December [year n].
[Summary referred to in Article 5 provided in the languages referred to in paragraph 1 thereof]
Description of the principal adverse impacts on sustainability factors[Information referred to in Articles 6 and 7 in the format set out below]

102

Indicators applicable to investments in investee companies
Adverse sustainability indicator

Description

Impact[year n]Impact[year n-1]

Explanation

Actionstaken,
andactionsplannedandtargets
set for thenextreference
period

CLIMATE AND OTHER ENVIRONMENT-RELATED INDICATORSGreenhousegas emissions

1. GHG emissions

Scope 1 GHG emissions ofinvestee companies
expressed in tonnes of CO2
equivalent
Scope 2 GHG emissions ofinvestee companies
emissions expressed intonnes of CO2 equivalent
Scope 3 GHG emissions ofinvestee companies
1032. Carbon footprint

3. GHG intensity of investee
companies
4. Exposure to companies
active in the fossil fuelsector

5. Share of non-renewableenergy consumption andproduction

expressed in tonnes of CO2
equivalent
Total GHG emissions ofinvestee companies
expressed in tonnes of CO2
equivalent
Total GHG emissions
expressed as a ratio of all
investments
GHG emissions expressed asa ratio of investee company’s
revenuea) Share of investments incompanies active in thefossil fuel sectorb) Share of investments incompanies active in the coalsectora) Share of non-renewableenergy consumption of
investee companies from
non-renewable energy
sources compared torenewable energy sourcesb) Share of non-renewableenergy production of
investee companies from
non-renewable energy
sources compared torenewable energy sources1046. Energy consumption
intensity per high impact
climate sector
Biodiversity

7. Activities negatively
affecting biodiversitysensitive areas

Water

8. Emissions to water

Waste

9. Hazardous waste andradioactive waste ratio

Energy consumption in GWh
per million EUR of revenueof investee companies, perhigh impact climate sector
Share of investments ininvestee companies withsites/operations located in ornear to biodiversity-sensitive
areas where activities of
those investee companies
negatively affect those areas
Tonnes of emissions to water
generated by investee
companies per million EUR
investedTonnes of hazardous waste
and radioactive waste
generated by investee
companies per million EUR
invested

INDICATORS FOR SOCIAL AND EMPLOYEE, RESPECT FOR HUMAN RIGHTS, ANTI-CORRUPTION AND ANTI-BRIBERYMATTERSSocial and10. Violations of OECD
Share of investments in
employee
Guidelines forinvestee companies that havematters
Multinational Enterprises
been involved in violationsor the UN Guidingof the OECD Guidelines for
Principles including theMultinational Enterprises,
principles and rights set
the UN Guiding Principles,out in the eight
including the principles and105

fundamental conventions
identified in the ILO
Declaration and theInternational Bill of
Human Rights

rights set out in the eight
fundamental conventions
identified in the ILO
Declaration and theInternational Bill of Human
Rights

11. Lack of processes andcompliance mechanisms tomonitor compliance with
OECD Guidelines forMultinational Enterprisesor the UN Guiding
principles including theprinciples and rights set
out in the eight
fundamental conventions
identified in the ILO
Declaration and theInternational Bill of
Human Rights

Share of investments ininvestee companies without
policies to monitor
compliance with or withgrievance/ complaints
handling mechanisms toaddress violations of theOECD Guidelines forMultinational Enterprises,
the UN Guiding Principles,
including the principles andrights set out in the eight
fundamental conventions
identified in the ILO
Declaration and theInternational Bill of Human
Rights

12. Gender pay gap between
female and male
employees

Average gender pay gap
between female and male
employees of investee
companies
10613. Management andsupervisory board gender
diversity

14. Amount of accumulated
earnings in noncooperative tax
jurisdictions

15. Exposure to controversial
weapons

16. Exposure to companies
involved in the cultivationand production of tobacco
17. Interference in theformation of trade unions

Average ratio of female tomale management andsupervisory board members
in investee companies,
expressed as a percentage ofall board members
Amount of accumulated
earnings at the end of therelevant financial year frominvestee companies where
the total consolidated
revenue on their balance
sheet date for each of the lasttwo consecutive financial
years exceeds total of EUR
750M in jurisdictions thatappear on the revised EU listof non-cooperative
jurisdictions for tax purposes
Share of investments ininvestee companies involvedin the manufacture or sellingof controversial weapons
Share of investments ininvestee companies involvedin the cultivation andproduction of tobacco
Share of investments ininvestee companies without107

or elections of worker
representatives

18. Share of employees ofinvestee companies
earning less than theadequate wage

commitments on their noninterference in the formationof trade unions or election ofworker representatives
Average percentage of
employees in investee
companies earning less than
the adequate wage

Indicators applicable to investments in sovereigns and supranationals
Adverse sustainability indicator

Environmental

19. Sovereign GHG intensity

Social20. Investee countries subject
to social violations

Description

Impact[year n]Impact[year n-1]

Explanation

Actionstaken,
andactionsplannedandtargets
set for thenextreference
periodGHG intensity of investee
countries as a ratio ofinvestee country’s GDP
Number of investee
countries subject to social
violations, as referred to ininternational treaties and108

conventions, United Nations
principles and, whereapplicable, national law
Indicators applicable to investments in real estate assets
Adverse sustainability indicator

Fossil fuels
21. Exposure to fossil fuels
through real estate assets
Energyefficiency

22. Exposure to energy
inefficient real estate
assetsDescription

Impact[year n]ImpactExplanation[year n-1]

Actionstaken,
andactionsplannedandtargets
set for thenextreference
periodShare of investments in realestate assets involved in theextraction, storage, transport
or manufacture of fossil fuels
Share of investments inenergy inefficient real estate
assetsOther indicators for principal adverse impacts on sustainability factors[Information on the principal adverse impacts on sustainability factors referred to in Article 6(1), point (a) in the format in Table 2]109

[Information on the principal adverse impacts on sustainability factors referred to in Article 6(1), point (b), in the format in Table 3][Information on any other adverse impacts on sustainability factors used to identify and assess additional principal adverse impacts on asustainability factor referred to in Article 6(1), point (c), in the format in Table 2 or Table 3]
Description of policies to identify and prioritise principal adverse impacts on sustainability factors[Information referred to in Article 7]
Engagement policies[Information referred to in Article 8]
References to international standards[Information referred to in Article 9]
Historical comparison[Information referred to in Article 10]

Table 2
Additional climate and other environment-related indicators

110Adverse
sustainability
impactAdverse impact on sustainability factors(qualitative or quantitative)

Description

Indicators applicable to investments in investee companies

CLIMATE AND OTHER ENVIRONMENT-RELATED INDICATORS
Emissions

1. Emissions of inorganic pollutants

2. Emissions of air pollutants

3. Emissions of ozone-depleting substances

4. Investments in companies without carbon emission reduction initiatives

Energyperformance

5. Breakdown of energy consumption by type of non-renewable sources of energy

Tonnes of inorganic
pollutants equivalent per
million EUR invested
Tonnes of air pollutants
equivalent per million
EUR invested
Tonnes of ozonedepleting substances
equivalent per million
EUR invested
Share of investments ininvestee companies
without carbon emission
reduction initiatives
aimed at aligning with
the Paris Agreement
Share of energy from
non-renewable sources
used by investee
companies broken down111

Water, waste
and material
emissions

6. Water usage and recycling

7. Investments in companies without water management policies

8. Exposure to areas of high water stress9. Investments in companies producing pesticides and other agrochemical products

10. Land degradation, desertification, soil sealingby each non-renewableenergy sourcea) Average amount ofwater consumed by theinvestee companies (incubic meters) per million
EUR of revenue ofinvestee companiesb) Percentage of water
recycled and reused byinvestee companies
Share of investments ininvestee companies
without water
management policies
Share of investments ininvestee companies withsites located in areas ofhigh water stress withouta water management
policyShare of investments ininvestee companies theactivities of which fallunder Division 20.2 ofAnnex I to Regulation(EC) No 1893/2006
Share of investments ininvestee companies theactivities of which cause
11211. Investments in companies without sustainable land/agriculture practices or policies

12. Investments in companies without sustainable oceans/seas practices or policies

13. Non-recycled waste ratio

14. Natural species and protected areas

land degradation,desertification or soil
sealing
Share of investments ininvestee companies, theactivities of which
involve land/agriculturalactivities without
sustainable
land/agriculture practices
or policies
Share of investments ininvestee companies, theactivities of which
involve oceans, seas,
coasts or inland water
activities without
sustainable oceans/seaspractices or policies
Tonnes of non-recycled
waste generated byinvestee companies per
million EUR investeda) Share of investments
in investee companies
whose operations affectthreatened speciesb) Share of investments
in investee companies
without a biodiversity
113

protection policy
covering operationalsites owned, leased,managed in, or adjacent
to, a protected area or an
area of high biodiversity
value outside protected
areas
Share of investments incompanies without apolicy to address
deforestation

15. Deforestation

Green securities

16. Share of corporate debt securities not issued under Union legislation on environmentally
sustainable bonds

Share of securities ininvestments not issued
under Union legislation
on environmentally
sustainable bonds

Indicators applicable to investments in sovereigns and supranationals
Green securities

17. Share of sovereign and supranational debt securities not issued under Union legislation
on environmentally sustainable bonds

Share of bonds notissued under Union
legislation on
environmentally
sustainable bonds

Indicators applicable to investments in real estate assets

114

Greenhouse gas
emissions

18. Real estate GHG emissions

Energyconsumption

19. Energy consumption intensity

Waste

20. Waste production in operationsa) Scope 1 GHG
emissions generated byreal estate assets
expressed in tonnes of
CO2 equivalentb) Scope 2 GHG
emissions generated byreal estate assets
expressed in tonnes of
CO2 equivalentc) Scope 3 GHG
emissions generated byreal estate assets
expressed in tonnes of
CO2 equivalentd) Total GHG emissions
generated by real estate
assets expressed intonnes of CO2
equivalent
Energy consumption in
GWh of owned realestate assets per square
meter
Share of real estate
assets not equipped withfacilities for wastesorting and not coveredby a waste recovery or
recycling contract
115

Resource
consumption

21. Raw materials consumption for new construction and major renovations

Biodiversity

22. Land artificialisation

Share of raw building
materials (excluding
recovered, recycled andbiosourced) compared tothe total weight ofbuilding materials usedin new construction andmajor renovations
Share of non-vegetatedsurface area (surfacesthat have not been
vegetated in ground, as
well as on roofs, terraces
and walls) compared tothe total surface area ofthe plots of all assets

Table 3
Additional indicators for social and employee, respect for human rights, anti-corruption and anti-bribery matters
INDICATORS FOR SOCIAL AND EMPLOYEE, RESPECT FOR HUMAN RIGHTS, ANTI-CORRUPTION AND ANTIBRIBERY MATTERS
Adversesustainability
impactAdverse impact on sustainability factors(qualitative or quantitative)

Description

Indicators applicable to investments in investee companies
1. Investments in companies without workplace accident prevention policies ormanagement systems

Share of investments ininvestee companies
116Social andemployeematters
2.

3.

4.

5.

6.

without a workplace
accident prevention
policy or management
systemRate of recordable work-related injuries
Rate of recordable workrelated injuries ininvestee companies
Number of days lost to work-related injuries, accidents, ill health and fatalities
Number of workdays
lost to work-related
injuries, accidents, ill
health or fatalities ofinvestee companies
Lack of a supplier code of conduct
Share of investments ininvestee companies
without any suppliercode of conduct (against
unsafe working
conditions, child labourand forced labour)
Lack of grievance/complaints handling mechanism to report alleged cases of Share of investments indiscrimination related to employee mattersinvestee companies
without agrievance/complaints
handling mechanism toreport alleged cases of
discrimination related to
employee matters
Insufficient whistleblower protection
Share of investments inentities without policies
117

7. Incidents of discrimination and incidents of discrimination related to any type of
discrimination leading to monetary and non-monetary sanctions in investee companies

8. Excessive CEO pay ratioon the protection ofwhistleblowersa) Number of incidents
of discriminationb) Number of incidents
of discrimination related
to any type of
discrimination leading tomonetary and nonmonetary sanctions ininvestee companies
Ratio within investee
companies of the annual
total compensation forthe highest compensatedindividual to the medianannual totalcompensation for all
employees (excluding
the highest-compensatedindividual)

118

9. Excessive use of non-guaranteed-hour employees in investee companies

Share of non-guaranteed
hour employees ininvestee companies asshare of total employees

10. Excessive use of temporary contract employees in investee companies

Share of temporary
contract employees ininvestee companies asshare of total employees

119Human Rights

11. Excessive use of non-employee workers in investee companies

Share of non-employee
workers in investee
companies as share of
total employees

12. Insufficient employment of persons with disabilities within the workforce

Share of persons withdisabilities within theworkforce of investee
companies

13. Lack of human rights policies

Share of investments inentities without humanrights policies
Share of investments inentities without a due
diligence process to
identify, prevent,mitigate and address
adverse human rights
impacts

14. Lack of due diligence120

15. Lack of processes and measures for preventing trafficking in human beings

Share of investments ininvestee companies
without policies against
trafficking in humanbeings
16. Operations and suppliers using workforce qualifying as child labour
Share of investments ininvestee companies
exposed to operations
and suppliers using
workforce qualifying as
child labour
17. Operations and suppliers at significant risk of forced or compulsory labour
Share of investements ininvestee companies
exposed to operations
and suppliers at
significant risk ofincidents of forced orcompulsory labour interms of geographic
areas and / or the type ofoperation
18. Number of identified cases of severe human rights issues and incidents
Number of cases ofsevere human rights
issues and incidents
connected to investee
companies
19. Lack of remediation mechanism for affected communities relating to the operations of Share of investments in
the investee companies
investee companies
without remediation
mechanism for121

Anti-corruption
and anti-bribery

stakeholders materiallyaffected by theoperations of theinvestee companies
20. Lack of remediation handling mechanism for consumers/end-users of the investee Share of investments incompany
investee companies
without remediation
mechanism for
consumers/end-users of
the investee companies
21. Lack of anti-corruption and anti-bribery policies
Share of investments inentities without policies
on anti-corruption andanti-bribery consistent
with the United Nations
Convention against
Corruption
22. Cases of insufficient action taken to address breaches of standards of anti-corruption and Share of investments inanti-bribery
investee companies withidentified insufficiencies
in actions taken toaddress breaches inprocedures and standardsof anti-corruption andanti-bribery
23. Number of convictions and amount of fines for violation of anti-corruption and anti- Numbers of convictions
bribery laws
and amount of fines forviolations of anticorruption and anti122

bribery laws by investee
companies
Indicators applicable to investments in sovereigns and supranationals
Social

24. Average income inequality score

25. Average freedom of expression score

26. Average human rights performance

Human rights

27. Average corruption score

The distribution income
and economic inequality
among the participant in
a particular economy
including a quantitative
indicator explained in
the explanation column
Measuring the extent towhich political and civilsociety organisations canoperate freely including
a quantitative indicator
explained in the
explanation column
Measure of the average
human right performanceof investee countries
using a quantitative
indicator explained in
the explanation column
Measure of the perceived
level of public sector
corruption using aquantitative indicator
123Governance

28. Investments in non-cooperative tax jurisdictions

29. Average political stability score

30. Average rule of law score

explained in the
explanation column
Investments injurisdictions on the EU
list of non-cooperative
jurisdictions for tax
purposes
Measure of thelikelihood that thecurrent regime will beoverthrown by the use offorce using a quantitative
indicator explained in
the explanation column
Measure of the level ofcorruption, lack offundamental rights, andthe deficiencies in civil
and criminal justiceusing a quantitative
indicator explained in
the explanation column

124

ANNEX II
Template pre-contractual disclosure for the financial products referred to in Article 8, paragraphs
1, 2 and 2a, of Regulation (EU) 2019/2088 and Article 6, first paragraph, of Regulation (EU)2020/852
Product name: [complete]

Sustainable
investments
contribute toenvironmental orsocial objectives anddo not causesignificant harm toenvironment andsociety.
The EU Taxonomy
defines
environmentally
sustainableeconomic activities
according to specificcriteria. Not all
sustainable
investments with anenvironmental
objective meet the
EU Taxonomy
criteria.

Legal entity identifier: [complete]

Pre-contractual information: Environmental and/or social
characteristics [delete environmental or social if not applicable]

This product has some sustainability characteristics, but does not have sustainable investment as its
objective[include the environmental and/or social characteristic(s) promoted by the product and the [X]% of the
product's investments that promote those characteristics – 250 character limit with spaces][if q%>0 use green icon and text:] Minimum sustainable investments = [q]%[if q%=0 use grey icon, remove green box on the right and use text:] This product does
not commit to making sustainable investments.

q%[if r%>0 use dark green icon and text:] Minimum EU Taxonomy investments = [r,calculated according to Article 17 of this Regulation]%[if r%=0 use grey icon, remove dark green box on the right and use text:] This productdoes not commit to making EU Taxonomy investments.

r%This product [does not] considers the most significant negative impacts of its investments on theenvironment and society. [use grey icon where the product does not]

CO2

This product targets a reduction of ___% of greenhouse gas emissions in the atmosphere by___.[mention the date of achievement of the target]. [remove this statement and icon where theproduct does not have a decarbonisation target]

What are the environmental and/or social characteristics of this product? [indicate
the environmental and/or social characteristics promoted by the financial product and whether a reference
benchmark has been designated for the purpose of attaining the environmental or social characteristics
promoted by the financial product]

How do you measure how each of the environmental or social characteristics aremet? [specify the sustainability indicators used]

This product makes a minimum of [x]% sustainable investments. What are theobjectives of the sustainable investments? [only include for financial products that makesustainable investments a description of the objectives and how the sustainable investments
contribute to the sustainable investment objective. For the financial products referred to in Article 6,125

first paragraph, of Regulation (EU) 2020/852, list the environmental objectives set out in Article 9 ofthat Regulation to which the sustainable investment underlying the financial product contributes]

Does this product consider the most significant negative impacts of its
investments on the environment and society (principal adverse impacts)?
[include notes only for
financial products thatconsider PAI] Principal

Yes, ______ [if the financial product considers principal adverse impacts on sustainability
factors, include a clear and reasoned explanation of how it considers principal adverse impacts
on sustainability factors. Indicate where, in the information to be disclosed pursuant to Article
11(2) of Regulation (EU) 2019/2088, the information on principal adverse impacts onsustainability factors is available]

adverse impacts are
the most significant
negative impacts on
the environment andsociety including
employee matters,
human rights,
corruption andbribery.

No [indicate the reasons]

CO2

Does this product have a greenhouse gas (GHG) emission reduction target?
Yes: [if the financial product has a GHG emission reduction target in accordance with Article[include notes only for
financial products thathave a GHG emission
reduction target]

Greenhouse gases(GHG) are thosegases, including
carbon dioxide, thatare responsible forthe “greenhouseeffect”. The
increasedconcentration ofthese gases in theatmosphere is thecause of global
warming.

14a(1) of this Regulation, provide a narrative explanation about the way the target will beachieved, indicating whether the financial product (a) divests from investments with particular
GHG emissions levels and invests instead in companies with lower GHG emissions; (b) invests incompanies that are expected to deliver GHG emissions reductions over the duration of theinvestment; (c) engages with investee companies to contribute to their GHG emissions reduction.
Indicate which is the share of the investments of the financial product covered by the GHG
emission reduction target and when the target is achieved only by a share of investments,
indicate the target of that share of investments.]

No [if the financial product does not have a GHG emission reduction target in accordance with
Article 14a(1) of this Regulation, do not include any subsequent question related to the topic
below and proceed to the next section ‘What investment strategy does this product follow?’]

What is the greenhouse gas emission reduction target of the product? [Fill in thetable below, with information on the baseline GHG emissions, the final and intermediate targets andthe corresponding years. The baseline financed GHG emissions and the targets shall be calculated inaccordance with Article 14a(2) of this Regulation. Financial market participants shall indicate if thedata on the investee companies’ GHG removals and storage and/or the purchase of carbon credits are
not readily available and include details of the best efforts used to obtain the information either
directly from investee companies, or by carrying out additional research, cooperating with third party
data providers or external experts or making reasonable assumptions. Financial market participants
shall disclose the share of the investments for which the data are available.]This product is notaiming at limiting
global warming to 1.5
degree Celsius.
[Baselineyear]

GHG emission reduction
targets (tCO2-eq/€M)[Date of expected
achievement ofintermediate target][Addcolumns forotherintermediatetargets,
whereapplicable][Date of expected
achievement of the
final target][GHG
emissions in
tCO2eq/€M, notincluding126

[include only for
financial productsthat have a GHG
emission reduction
target] Information
on progress
towards the target
will be available in
the periodic reports[add link to periodic
reports whereavailable] andadditional details
are available here
[add link to
website].

carbonremovalsand storage
and credits]

GHG removals and storage(tCO2-eq/€M) [include row
where relevant]Carbon credits used byinvestee companies and/or
purchased by the financial
market participant (tCO2eq/€M) [include row where
relevant]

What investment strategy does this product follow? [provide a description of theinvestment strategy and indicate how the strategy is implemented in the investment process on a continuous
basis]The investment
strategy guides
investment
decisions based on
factors such as
investment
objectives and how
much risk can betaken.

What commitments are made in the investment strategy regarding theenvironmental or social characteristics of the product?

What is the committed minimum rate of reduction of investments according to
the investments strategy? [ Where there is a commitment to reduce the scope of investments
by a minimum rate, include an indication of the rate to reduce the scope of the investments considered
prior to the application of the investment strategy]

How is it assessed whether the companies which are invested in, follow good
governance practices, such as tax compliance or employee matters? [include a short
description of the policy to assess good governance practices of the investee companies]

What is the asset allocation planned for this product? [include a narrative explanation of theinvestments of the financial product, including the minimum proportion of the investments of the financial
product used to meet the environmental or social characteristics promoted by the financial product inaccordance with the binding elements of the investment strategy. This includes the minimum proportion ofsustainable investments of the financial product where that financial products commits to making sustainable
investments, and the purpose of the remaining proportion of the investments, including a description of any
minimum environmental or social safeguards]

Asset allocation
describes the shareof investments inspecific assets.

How does the use of derivatives contribute to the promotion of environmental orsocial characteristics? [for financial products that use derivatives as defined in Article 2(1), point(29), of Regulation (EU) No 600/2014 to attain the environmental or social characteristics they
promote, describe how the use of those derivatives meets those characteristics]

127With regards to sustainable investments, how do they not cause significant harm
to any environmental or social objective? [include a description for the financial productthat partially intends to make sustainable investments][include note only forthe financial products
referred to in Article 6,
first paragraph, ofRegulation (EU)2020/852]

How are the indicators to assess the most significant negative impacts of theinvestments on the environment and society taken into account for thisassessment? [include an explanation of how the indicators for adverse impacts in Table 1 ofAnnex I and any relevant indicators in Tables 2 and 3 of Annex I, are taken into account. If thefinancial product uses thresholds to determine that sustainable investments do not significantly
harm any environmental or social objective under the PAI indicators in Annex I of this Regulation,
provide a concise explanation of how they were determined and provide a hyperlink to thesection on the website where further explanations and the thresholds are disclosed.]

To comply with
the EU Taxonomy,
the criteria forfossil gas include
limitations onemissions andswitching to
renewable power
or low-carbon
fuels by the end of2035. For nuclear
energy, thecriteria include
comprehensive
safety and waste
management
rules.

Link where detailed information is provided:
How are the sustainable investments consistent with the relevant international
standards? Details: [include an explanation on the alignment with the OECD Guidelines forMultinational Enterprises and the UN Guiding Principles on Business and Human Rights,
including the principles and rights set out in the eight fundamental conventions identified in the
Declaration of the International Labour Organisation on Fundamental Principles and Rights at
Work and the International Bill of Human Rights][Include statement for financial products referred to in Article 6, first paragraph, of Regulation (EU)2020/852]

The EU Taxonomy sets out a “do not significant harm” principle by which
Taxonomy-aligned investments should not significantly harm EU Taxonomy
objectives and is accompanied by specific EU criteria.
The “do no significant harm” principle applies only to those investments underlying
the financial product that take into account the EU criteria for environmentally
sustainable economic activities. The investments underlying the remaining portionof this financial product do not take into account the EU criteria forenvironmentally sustainable economic activities.

[include note only for
financial products
referred to in Article 6
of Regulation (EU)2020/852

EU Taxonomyaligned activities are
expressed as a shareof:- turnoverreflecting theshare of revenue
from green
activities ofinvesteecompanies- capital
expenditure(CapEx) showing
the green
investments madeby investee
companies, e.g. fora transition to agreen economy.
- operational
expenditure(OpEx) reflecting
green operational
activities ofinvesteecompanies.

Any other sustainable investments must also not significantly harm any
environmental or social objectives.

What is the minimum proportion of EU Taxonomy investments? [include a section
for the financial products referred to in Article 6, first paragraph, of Regulation (EU) 2020/852 and include
the graphical representation referred to in Article 15(1), point (a), of this Regulation, the description
referred to in Article 15(1), point (b), of this Regulation, a clear explanation as referred to in Article 15(1),point (c), of this Regulation, a narrative explanation as referred to in Article 15(1), point (d), of thisRegulation and the information referred to in Article 15(2) and (3) of this Regulation]

Does the product invest in fossil gas and/or nuclear energy related activities thatcomply with the EU Taxonomy1?
Yes: [specify below, and details in the graphs of the box]
In fossil gas

In nuclear energy

No
1

Fossil gas and/or nuclear related activities will only comply with the EU Taxonomy where they
contribute to limiting climate change (“climate change mitigation”) and do not significantly harm
any EU Taxonomy objective - see explanatory note in the left hand margin. The full criteria for fossil
gas and nuclear energy economic activities that comply with the EU Taxonomy are laid down in
Commission Delegated Regulation (EU) 2022/1214.

128

[include note for thefinancial products
referred to in Article 6,
first paragraph, ofRegulation (EU)2020/852.

Enabling activities
directly enable otheractivities to make a
substantial
contribution to an
environmental
objective
Transitional activities
are activities forwhich low-carbon
alternatives are not
yet available andamong others havegreenhouse gas
emission levels
corresponding to thebest performance.

The two graphs below show in green the minimum percentage of EU Taxonomy investments. As
there is no appropriate way to determine if sovereign bonds* meet the criteria of the EU
Taxonomy, the first graph shows the share of EU Taxonomy investments in relation to all theinvestments of the product including sovereign bonds, while the second graph shows the share of
EU Taxonomy investments in relation only to the investments of the product other than sovereign
bonds.
[only include in the graphs the figures for EU Taxonomy aligned fossil gas and/or nuclear energy as
well as the corresponding legend and the explanatory text in the left hand margin if the financial
product makes investments in fossil gas and/or nuclear energy EU Taxonomy-aligned economic
activities]
1. Share of EU Taxonomy investments
including sovereign bonds*

EU Taxonomy: Fossil
gasa%

2. Share of EU Taxonomy investments
excluding sovereign bonds*

d%
b%

y%

t%

EU Taxonomy: Nuclear

EU Taxonomy: Nuclearc%
EU Taxonomy otherthan fossil gas &nuclearNon EU Taxonomy
investments

EU Taxonomy: Fossil gas

EU Taxonomy other thanfossil gas & nuclearz%w%

Non EU Taxonomy
investments
This graph shows __% of the investments of the product.

* For the purpose of these graphs, ‘sovereign bonds’ consist of all sovereign exposures.

[include note forfinancial products
referred to in Article 6,
first paragraph, ofRegulation (EU)2020/852 that invest inenvironmental
economic activities
that are notenvironmentally
sustainable economic
activities]

aresustainable
investments with anenvironmental
objective that do
not take into
account the criteriaof the EU Taxonomy.

What is the minimum share of investments in transitional and enabling activities?
[include section for the financial products referred to in Article 6, first paragraph, of Regulation (EU)2020/852]

What is the minimum share of sustainable investments with anenvironmental objective that do not meet the criteria of the EU Taxonomy?
[include section only for the financial products referred to in Article 6, first paragraph, of Regulation (EU)2020/852 where the financial product invests in economic activities that are not environmentally
sustainable economic activities and explain why the financial product invests in sustainable investmentswith an environmental objective in economic activities that are not EU Taxonomy-aligned]

What is the minimum share of socially sustainable investments? [include section
only where the financial product includes sustainable investments with a social objective]

What investments are not promoting the product’s environmental orsocialcharacteristics, what is their purpose and are there any minimum
environmental or social safeguards?

129

Is a specific index used as a reference benchmark and how is this index
monitored to ensure consistency with the environmental and/or social
characteristics of the product? [include section where an index has been designated as a reference[include note forfinancial products
where an index has
been designated as areference benchmark
for the purpose of
attaining theenvironmental orsocial characteristics
promoted by thefinancial product]

benchmark for the purpose of attaining the environmental or social characteristics promoted by the financial
product. Specify how the index is continuously aligned with each of the environmental or social characteristics
promoted by the financial product. Specify also how is the alignment of the investment strategy with themethodology of the index ensured on a continuous basis and indicate where the methodology used for the
calculation of the index can be found]

How does the index used differ from a relevant broad market index?

Reference
benchmarks areindexes to show
how well a productperforms
compared to anindex with similar
objectives orfeatures.
wwwWhere can I find more product specific information online?
More product-specific information can be found on the website: [include a hyperlink to thewebsite referred to in Article 23 of this Regulation]

130

ANNEX III
Template pre-contractual disclosure for the financial products referred to in Article 9, paragraphs 1
to 4a, of Regulation (EU) 2019/2088 and Article 5, first paragraph, of Regulation (EU) 2020/852
Product name: [complete]

Legal entity identifier: [complete]

Pre-contractual information: Sustainable investment objective

This product has sustainable investment as its objective.
Sustainable
investments
contribute to an
environmental orsocial objective anddo not causesignificant harm toenvironment andsociety.
The EU Taxonomy
defines
environmentally
sustainableeconomic activities
according to specificcriteria. Not all
sustainable
investments with anenvironmental
objective meet the
EU Taxonomy
criteria.

[in this box include the product’s sustainable investment objective – 250 characters limit with space]

Minimum sustainable investments = [q]%q%[if r%>0 use dark green icon and text:] Minimum EU taxonomy investments = [rcalculated according to Article 17 of this Regulation]%[if r%=0 use grey icon, remove dark green box on the right and use text:] This productdoes not commit to making EU taxonomy investments.

r%This product considers the most significant negative impacts of its investments on theenvironment and society. [use grey icon, and “does not consider” instead of “considers” where
the product does not]

CO2

This product targets a reduction of ___% of greenhouse gas emissions in the atmosphere by ___.
[include this statement and icon where the product has a GHG emission reduction target that is
not compatible with limiting global warming to 1.5 degrees Celsius.]
This product targets a reduction of greenhouse gas emissions in the atmosphere to limit global
warming to 1.5 °C. [include this statement and icon where the product has a GHG emission
reduction target compatible with limiting global warming to 1.5 degrees Celsius.]

What is the sustainable investment objective of this product? [indicate the investment
objective pursued by the financial product, describe how the sustainable investments contribute to a sustainable
investment objective and indicate whether a reference benchmark has been designated for the purpose of
attaining the sustainable investment objective. For financial products referred to in Article 5 , first paragraph,of Regulation (EU) 2020/852, in respect of sustainable investments with environmental objectives, list theenvironmental objectives set out in Article 9 of that Regulation to which the sustainable investment underlying
the financial product contributes. For financial products referred to in Article 9(3) of Regulation (EU) 2019/2088,
indicate that the financial product has the objective of reducing carbon emissions and explain that the reference
benchmark qualifies as an EU Climate Transition Benchmark or an EU Paris-aligned Benchmark under Title III,
Chapter 3a, of Regulation (EU) 2016/1011 and indicate where the methodology used for the calculation of thatbenchmark can be found. Where no EU Climate Transition Benchmark or EU Paris-aligned Benchmark as
qualified in accordance with Regulation (EU) 2016/1011 is available, describe that fact, how the continued effort
of attaining the objective of reducing carbon emissions is ensured in view of achieving the objectives of the Paris
Agreement and the extent to which the financial product complies with the methodological requirements set
out in Commission Delegated Regulation (EU) 2020/1818]

How do you measure how the sustainable investment objective of this productwill be met? [specify the sustainability indicators used]
131

Does this product consider the most significant negative impacts of its
investments on the environment and the society (principal adverse impacts)?

[include notes only for
financial products thatconsider PAI] Principal

Yes [if the financial product considers principal adverse impacts on sustainability factors, include
a clear and reasoned explanation of how it considers principal adverse impacts on sustainability
factors. Indicate where, in the information to be disclosed pursuant to Article 11(2) of Regulation(EU) 2019/2088, the information on principal adverse impacts on sustainability factors isavailable]

adverse impacts are
the most significant
negative impacts on
the environment andsociety including
employee matters,
human rights,
corruption andbribery.

No [explain the reasons]

CO2

Does this product have a greenhouse gas emission reduction target?
Yes: [if the financial product has a greenhouse gases (GHG) emission reduction target in[include note only for
financial products thathave a GHG emission
reduction target]

Greenhouse gases(GHG) are thosegases, including
carbon dioxide, thatare responsible forthe “greenhouseeffect”. The
increasedconcentration ofthese gases in theatmosphere is thecause of global
warming.

accordance with Article 14a(1) of this Regulation, provide a narrative explanation about thetarget, indicating whether the financial product (a) divests from investments with particular GHG
emissions levels and invests instead in companies with lower GHG emissions; (b) invests incompanies that are expected to deliver actual GHG emissions reductions over the duration of theinvestment; (c) engages with investee companies to contribute to their GHG emissions reduction.
Indicate which is the share of the investments of the financial product covered by the GHG
emission reduction target and when the target is achieved only by a share of investments,
indicate the target of that share of investments.
For financial products referred to in Article 9(3) of Regulation (EU) 2019/2088 whose investment
objective is to track use an EU Climate Transition Benchmarks or an EU Paris-aligned Benchmark
as defined in Article 3, points (23a) and (23b) of Regulation (EU) 2016/1011 , provide a hyperlink
to information disclosed by the benchmark administrator according to Article 18(5) of thisRegulation. Do not include any subsequent question related to the topic below and proceed to
the next section ‘What investment strategy does this product follow?’]

No [if the financial product does not have a GHG emission reduction target in accordance with
Article 14a(1) of this Regulation, do not include any subsequent question related to the topic
below and proceed to the next section ‘What investment strategy does this product follow?’]

What is the greenhouse gas emission reduction target of the product? [Fill in the[remove this box

where the productaims to limit global
warming to 1.5 °C]
This product is notaiming at limiting
global warming to
1.5 °C.

table below, with information on the baseline financed GHG emissions, the final and intermediatetargets and the corresponding years. The baseline financed GHG emissions and the targets shall becalculated in accordance with Article 14a(2) of this Regulation. Financial market participants shallindicate if the data on the investee companies’ GHG removals or the purchase of carbon credits oron both are not readily available and include details of the best efforts used to obtain the information
either directly from investee companies, or by carrying out additional research, cooperating withthird party data providers or external experts or making reasonable assumptions. Financial market
participants shall disclose the share of the investments for which the data are available. ]132

[include only for
financial productsthat have a GHG
emission reduction
target] Information
on progress
towards the target
will be available in
the periodic reports[add link to periodic
reports whereavailable] andadditional details
are available here
[add link to
website].

[Baseline year]

GHG emission reduction
targets (tCO2-eq/€M)[Date ofexpectedachievement of
firstintermediatetarget][Addcolumns forotherintermediatetargets][Date ofexpectedachievement of
the final target][GHG emissions in
tCO2-eq/€M, notincluding carbon
removals andstorage and credits]

GHG removals andstorage (tCO2-eq/€M)[include row where relevant]Carbon credits used byinvestee companies
and/or purchased by
the financial market
participant (tCO2-eq/€M)[include row where relevant]Does the greenhouse gas emission reduction target aim to limit global warming
to 1.5 °C?
Yes: [if yes, describe the methodology used to assess if the target aims to limit global warming
to 1.5 °C]

No [if no, include the following text “The target of this financial product is not compatible
with the objective to limit global warming to 1.5 °C.”]

Not Assessed. [If the alignment of the target was not assessed, include the following text
“The degree of alignment of this financial product with the objective to limit global warming
to 1.5 degree Celsius was not assessed. The target of this financial product may not becompatible with the objective to limit global warming to 1.5 °C.”]

What investment strategy does this product follow? [provide a description of the investment
strategy and indicate how the strategy is implemented in the investment process on a continuous basis]

The investment
strategy guides
investment
decisions based on
factors such as
investment
objectives and how
much risk can betaken.

What commitments are made in the investment strategy regarding the product’s
sustainable investments?
How is it assessed whether the companies which are invested in follow good
governance practices, such as tax compliance or employee matters? [include a short
description of the policy to assess good governance practices of the investee companies]133

What is the asset allocation and the minimum share of sustainable investments?
Asset allocation
describes the shareof investments inspecific assets.

[include a narrative explanation of the investments of the financial product including the minimum proportionof the investments of the financial product used to meet the sustainable investment objective in accordancewith the binding elements of the investment strategy][include note only forthe financial products
referred to in Article 5,
first paragraph, ofRegulation (EU)2020/852]

How does the use of derivatives contribute to the sustainable investment
objective? [for financial product that use derivatives as defined in Article 2(1), point (29), ofRegulation (EU) No 600/2014 to attain their sustainable investment objective, describe how the use of
those derivatives attains that sustainable investment objective]

How do sustainable investments not cause significant harm to any environmental
or social sustainable investment objective?

To comply with the
EU Taxonomy, thecriteria for fossil
gas include
limitations onemissions andswitching to
renewable power
or low-carbon
fuels by the end of2035. For nuclear
energy, the criteria
includecomprehensive
safety and waste
management
rules.

How are the indicators to assess the most significant negative impacts of theinvestments on the environment and the society taken into account for thisassessment? [explain how the indicators for adverse impacts in Table 1 of Annex I and any
relevant indicators in Tables 2 and 3 of Annex I are taken into account. If the financial productuses thresholds to determine that sustainable investments do not significantly harm any
environmental or social objective under the PAI indicators in Annex I of this Regulation, provide
a concise explanation of how they were determined and provide a hyperlink to the section on thewebsite where further explanations and the thresholds are disclosed.]

Link where detailed information is provided:
How are the sustainable investments consistent with relevant international
standards? [include an explanation on the alignment with the OECD Guidelines for Multinational[include note only for
financial products
referred to in Article 5,
first paragraph, ofRegulation (EU)2020/852

Enterprises and the UN Guiding Principles on Business and Human Rights, including the principles
and rights set out in the eight fundamental conventions identified in the Declaration of theInternational Labour Organisation on Fundamental Principles and Rights at Work and theInternational Bill of Human Rights]

EU Taxonomyaligned activities are
expressed as a shareof:- turnoverreflecting theshare of revenue
from green
activities ofinvesteecompanies- capital
expenditure(CapEx) showing
the green
investments madeby investee
companies, e.g. fora transition to agreen economy.
- operational
expenditure(OpEx) reflecting
green operational
activities ofinvesteecompanies.

What is the minimum proportion of EU Taxonomy investments? [include the section
for financial products referred to in Article 5, first paragraph, of Regulation (EU) 2020/852 and include thegraphical representation referred to in Article 19(1), point (a), of this Regulation, the description referred toin Article 19(1), point (b), of this Regulation, the clear explanation referred to in Article 19(1), point (c), of
this Regulation, the narrative explanation referred to in Article 19(1), point (d), of this Regulation]

Does the product invest in fossil gas and/or nuclear energy related activities thatcomply with the EU Taxonomy1?
Yes: [specify below, and details in the graphs of the box]
In fossil gas

In nuclear energy

No

1

Fossil gas and/or nuclear related activities will only comply with the EU Taxonomy where they
contribute to limiting climate change (“climate change mitigation”) and do not significantly harm
any EU Taxonomy objectives - see explanatory note in the left hand margin. The full criteria forfossil gas and nuclear energy economic activities that comply with the EU Taxonomy are laid downin Commission Delegated Regulation (EU) 2022/1214.

134

The two graphs below show in green the minimum percentage of EU Taxonomy investments. As
there is no appropriate way to determine if sovereign bonds* meet the criteria of the EU
Taxonomy, the first graph shows the share of EU Taxonomy investments in relation to all
investments of the product including sovereign bonds, while the second graph shows the share of
EU Taxonomy investments in relation only to the investments of the product other than sovereign
bonds.
[only include in the graphs the figures for EU Taxonomy aligned fossil gas and/or nuclear energy as
well as the corresponding legend and the explanatory text in the left hand margin if the financial
product makes investments in fossil gas and/or nuclear energy EU Taxonomy-aligned economic
activities][include note for thefinancial products
referred to in Article 5,
first paragraph, ofRegulation (EU)2020/852.

Enabling activities
directly enable otheractivities to make a
substantial
contribution to an
environmental
objective.
Transitional activities
are activities forwhich low-carbon
alternatives are not
yet available andamong others havegreenhouse gas
emission levels
corresponding to thebest performance.

[include note forfinancial products
referred to in Article 5,
first paragraph, ofRegulation (EU)2020/852 that invest
in environmental
economic activities
that are notenvironmentally
sustainable economic
activities]

aresustainable
investments with anenvironmental
objective that do
not take into
account the criteria
for environmentaly
sustainableeconomic activities
under the EU
Taxonomy.

2. Share of EU Taxonomy investments
excluding sovereign bonds*

1. Share of EU Taxonomy investments
including sovereign bonds*

EU Taxonomy: Fossil
gas
EU Taxonomy: Nuclear
EU Taxonomy otherthan fossil gas &nuclearNon EU Taxonomy
investments

EU Taxonomy: Fossil gas

a%

d%
b%

y%

t%

EU Taxonomy: Nuclearc%

EU Taxonomy other thanfossil gas & nuclearz%w%

Non EU Taxonomy
investments
This graph shows __% of the investments of the product.

* For the purpose of these graphs, ‘sovereign bonds’ consist of all sovereign exposures.

What is the minimum share of investments in transitional and enabling activities?
[include section for the financial products referred to in Article 5, first paragraph, of Regulation (EU)2020/852]

What is the minimum share of sustainable investments with anenvironmental objective that do not meet the criteria of the EU Taxonomy?
[include section only for the financial products referred to in Article 5, first paragraph, of Regulation (EU)2020/852 where the financial product invests in environmental economic activities that are notenvironmentally sustainable economic activities and explain why the financial product invests insustainable investments with an environmental objective in economic activities that are not EU Taxonomyaligned]

What is the minimum share of socially sustainable investments? [include section
only where the financial product includes sustainable investments with a social objective]

What investments are not sustainable, what is their purpose and are there
any minimum environmental or social safeguards? [describe the purpose of theremaining proportion of the investments of the financial product, including a description of any minimum
environmental or social safeguards, how their proportion and use does not affect the delivery of thesustainable investment objective on a continuous basis and whether those investments are used forhedging or relate to cash held as ancillary liquidity]135

Is a specific index used as a reference benchmark and how is the benchmark
monitored to ensure consistency with the sustainable invesment objective of the
product? [include section only for the financial products referred to in Article 9(1) of Regulation (EU)[include note forfinancial products
where an index has
been designated as areference benchmark
for the purpose of
attaining theenvironmental orsocial characteristics
promoted by thefinancial product]

2019/2088. Specify how the reference benchmark takes into account sustainability factors in a way that iscontinuously aligned with the sustainable investment objective. Specify how is the alignment of the investment
strategy with the methodology of the index ensured on a continuous basis and indicate where the methodology
used for the calculation of the designated index can be found]

How does the index used differ from a relevant broad market index?

Reference
benchmarks areindexes to show
how well a productperforms
compared to anindex with similar
objectives orfeatures.

wwwWhere can I find more product specific information online?
More product-specific information can be found on the website: [include a hyperlink to thewebsite referred to in Article 37 of this Regulation]

136

ANNEX IV
Template periodic disclosure for the financial products referred to in Article 8, paragraphs 1, 2 and
2a, of Regulation (EU) 2019/2088 and Article 6, first paragraph, of Regulation (EU) 2020/852
Product name: [complete]

Legal entity identifier: [complete]

Reference period:[add reference period]

Periodic information: Environmental and/or social characteristics[delete environmental or social if not applicable]

Sustainable
investments
contribute to an
environmental orsocial objective anddo not causesignificant harm toenvironment andsociety.
The EU Taxonomy
defines
environmentally
sustainableeconomic activities
according to specificcriteria. Not all
sustainable
investments with anenvironmental
objective meet the
EU Taxonomy
criteria.

This product has some sustainability characteristics, but does not have a sustainable investment
objective.
[in this box include the environmental and/or social characteristic(s) promoted by the product and the[X]% of the product's investments that promote those characteristics – 250 characters limit with spaces][if q%>0 use green icon and text:] This product made [q]% sustainable investments[if q%=0 use grey icon, remove green box on the right and use text:] This productdid not make sustainable investments.

q%[if r%>0 use dark green icon and text:] This product made [r]% EU taxonomy
investments [r calculated according to Article 17 of this Regulation][if r%=0 use grey icon, remove dark green box on the right and use text:] This productdid not make EU taxonomy investments.

r%This product considered the most significant negative impacts of its investments on theenvironment and society. [use grey icon, and “did not consider” instead of “considered” where theproduct does not]
CO2

This product targets a reduction of ___% of greenhouse gas emissions in the atmosphere by___[mention date of the achievement of the target]. [remove this statement and icon where theproduct does not have a decarbonisation target]

To what extent were the environmental and/or social characteristics of thisproduct met? [list the environmental and/or social characteristics promoted by the financial product. For
the financial products referred to in Article 6, first paragraph, of Regulation (EU) 2020/852, in respect ofsustainable investments with environmental objectives, list the environmental objectives set out in Article 9 ofthat Regulation to which the sustainable investment underlying the financial product contributed. For financial
products that made sustainable investments with social objectives, list the social objectives]

How did the indicators measuring each of the environmental or social
characteristics perform?

…and compared to previous periods? [include for products where at least one previous
periodic report was provided]137

This product made [x]% of sustainable investments. What were the objectives ofthe sustainable investments? [include for products that made sustainable investments, where
not included in the reply to the above question, describe the objectives. Describe how the sustainable
investments contributed to the sustainable investment objective. For the financial products referred toin Article 6, first paragraph, of Regulation (EU) 2020/852, list the environmental objectives set out in
Article 9 of that Regulation to which the sustainable investment underlying the financial productcontributed]

How did this product consider the most significant negative impacts of its
investments on the environment and society (principal adverse impacts)? [include[include section if thefinancial productconsidered PAI]

section if the financial product considered principal adverse impacts on sustainability factors]

Principal adverse
impacts are the mostsignificant negative
impacts on theenvironment andsociety including
employee matters,
human rights,
corruption andbribery.
CO2

How much progress was achieved towards the product greenhouse gases (GHG)
emission reduction target? [only include if the product’s pre-contractual disclosures included a GHG
emission reduction target in accordance with Article 14a(1) of this Regulation. Fill in the table below with datafrom the pre-contractual disclosure and with measurements of progress to date, when available. If target(s)have not been met, provide an explanation and specify the actions planned to meet the target.

[include only for
financial products thathave a GHG emission
reduction target]

Greenhouse gases(GHG) are thosegases, including
carbon dioxide, thatare responsible forthe “greenhouseeffect”. The
increasedconcentration ofthese gases in theatmosphere is thecause of global
warming.

This product is notaiming at limiting
global warming to
1.5 °C

Where information on investee companies’ progress as regards GHG removals and storage or carbon credits
is not readily available, financial market participants shall provide details of the best efforts used to obtain theinformation either directly from investee companies, or by carrying out additional research, cooperating withthird party data providers or external experts or making reasonable assumptions and indicate that suchinformation is not available.][Baseline year]

GHG emission
reduction
targets (tCO2eq/€M)[Pre-contractual
disclosure Baseline GHG
emissions in
tCO2-eq/€M, notincluding GHG
removals andstorage andcarbon credits]

Progress
made [Add acolumn forprevious
reportingperiod withdata
available]

Progressmade[disclose
progressmadetowards theGHGemissions
reduction
targets(tCO2-eq/€M)
and anydifference
between the[disclose
progressmadetowards theGHGemissions
reduction
targets(tCO2-eq/€M)
and anydifference
between the[current
reportingperiod][Date ofexpectedachievementofintermediatetarget 1][Precontractual
disclosure –percentage ofthe GHG
emission
reductionintermediatetarget][Addcolumns forotherintermediatetargets][Date ofexpectedachievementof the final
target][Precontractual
disclosure –percentageof the GHG
emission
reduction
final target]138

target set for
the reporting
period andprogressmade]target set for
the reporting
period andprogress
made][Progress
made interms of GHG
removals
used (tCO2eq/€M)[include row
where
relevant][Precontractual
disclosure][Precontractual
disclosure][Precontractual
disclosure]

Baseline GHG
emissions[Progress
made interms of GHG
removals
used (tCO2eq/€M)[include row
where
relevant][Progress
made interms ofcarboncredits usedby investee
companies
and/orpurchased by
the financial
marketparticipant(tCO2-eq/€M)- include row
where
relevant][Precontractual
disclosure][Precontractual
disclosure][Precontractual
disclosure]

Baseline GHG
emissions[Progress
made interms ofcarboncredits usedby investee
companies
and/orpurchased by
the financial
marketparticipant(tCO2-eq/€M)- include row
where
relevant][include
onlyforfinancial products thathave a GHG emission
reduction target

Information
tobetter understand
the
level
of
ambition and scopeof the target can be
found
on
the
website [add links to“GHGemission
reduction
target”
sectionofthewebsite].

GHG removals
and storage(tCO2-eq/€M)[include row
where relevant]Carbon credits
used byinvesteecompanies
and/orpurchased by
the financial
marketparticipant(tCO2-eq/€M)[include row
where relevant]

How did the implementation of the investment strategy contribute to theachievement of the target? [indicate how the investment strategy was implemented, explain
any obstacle encountered and the extent to which it hampered progress towards the target(s).
Describe any change made to the investment strategy over the last reporting period.]

What were the largest investments of this product?

Largest investments

Sector% Assets

Country

during:[reference period]139

What was the proportion of investments that promote environmental and/or
social characteristics?

Asset allocation
describes theshare ofinvestments inspecific assets.

What was the asset allocation? [include information referred to in Article 53 of thisRegulation]

In which economic sectors were the investments made? [include information referred
to in Article 54 of this Regulation]

With regards to sustainable investments, how did they not cause significant harm
to any environmental or social sustainable investment objective? [include where thefinancial product includes sustainable investments]

How have the indicators to assess the most significant negative impacts of theinvestments on the environment and society been taken into account for thisassessment?
[explain how the indicators for adverse impacts in Table 1 of Annex I and any relevant indicators
in Tables 2 and 3 of Annex I were taken into account. If the financial product used thresholds todetermine that sustainable investments did not significantly harm any environmental or social
objective under the PAI indicators in Annex I of this Regulation, provide a concise explanation of
how they were determined and provide a hyperlink to the section on the website where further
explanations and the thresholds are disclosed.]

Link where detailed information is provided:

Were sustainable investments consistent with the relevant international
standards? Details: [include an explanation on the alignment with the OECD Guidelines forMultinational Enterprises and the UN Guiding Principles on Business and Human Rights,
including the principles and rights set out in the eight fundamental conventions identified in the
Declaration of the International Labour Organisation on Fundamental Principles and Rights at
Work and the International Bill of Human Rights]

140

[include note only forthe financial products
referred to in Article 6,
first paragraph, ofRegulation (EU)2020/852][Include a statement for the financial products referred to in Article 6, first paragraph, of Regulation(EU) 2020/852]

To comply with the
EU Taxonomy, thecriteria for fossil gas
include limitations
on emissions andswitching to fully
renewable power or
low-carbon fuels by
the end of 2035. For
nuclear energy, thecriteria include
comprehensive
safety and waste
management rules.

The EU Taxonomy sets out a “do not significant harm” principle by which
Taxonomy-aligned investments should not significantly harm EU Taxonomy
objectives and is accompanied by specific Union criteria.
The “do no significant harm” principle applies only to those investments
underlying the financial product that take into account the EU criteria forenvironmentally sustainable economic activities. The investments underlying theremaining portion of this financial product do not take into account the EU criteria
for environmentally sustainable economic activities.
Any other sustainable investments must also not significantly harm any
environmental or social objectives.

What was the proportion of EU Taxonomy investments? [include section for the
products referred to in Article 6 , first paragraph, of Regulation (EU) 2020/852 and include information inaccordance with Article 55 of this Regulation][include note for thefinancial products
referred to in Article 6,
first paragraph, ofRegulation (EU)2020/852

Did the product invest in fossil gas and/or nuclear energy related activities
complying with the EU Taxonomy1?

EU Taxonomyaligned activities are
expressed as a shareof:- turnoverreflecting theshare of revenue
from green
activities ofinvesteecompanies.
- capital
expenditure(CapEx)showingthe green
investments madeby investee
companies, e.g. fora transition to agreen economy.
- operational
expenditure(OpEx) reflecting
green operational
activities ofinvesteecompanies.

Yes: [specify below, and details in the graphs of the box]
In fossil gas

In nuclear energy

No

1

Fossil gas and/or nuclear related activities will only comply with the EU Taxonomy where they
contribute to limiting climate change (“climate change mitigation”) and do not significantly harm
any EU Taxonomy objective - see explanatory note in the left hand margin. The full criteria for fossil
gas and nuclear energy economic activities that comply with the EU Taxonomy are laid down in
Commission Delegated Regulation (EU) 2022/1214.

141

The two graphs below show in green the percentage of EU Taxonomy investments. As there is no
appropriate way to determine if sovereign bonds* meet the criteria of the EU Taxonomy, the first graphshows the share of EU Taxonomy investments in relation to all the investments of the financial productincluding sovereign bonds, while the second graph shows the share of EU Taxonomy investments inrelation only to the investments of the financial product other than sovereign bonds.
[include note for thefinancial products
referred to in Article 6,
first paragraph, ofRegulation (EU)2020/852.

Enabling activities
directly enable otheractivities to make a
substantial
contribution to an
environmental
objective
Transitional activities
are activities forwhich low-carbon
alternatives are not
yet available andamong others havegreenhouse gas
emission levels
corresponding to thebest performance.

[Include information on EU Taxonomy aligned fossil gas and nuclear energy and the explanatory text inthe left hand margin on the previous page only if the financial product invested in fossil gas and/or
nuclear energy EU Taxonomy-aligned economic activities during the reference period]
2. Share of EU Taxonomy investments
excluding sovereign bonds*d%1. Share of EU Taxonomy investments
including sovereign bonds*d%TurnoverTurnovera% b% c%

a%

b%

CapEx

d% f%

CapEx

g%

d%

e%

m%
j
k%

OpEx
0%

c%

h%

i%

f%

m%

OpEx

l%

50%

EU Taxonomy: Fossil gas
EU Taxonomy: Nuclear
EU Taxonomy: no gas and nuclear
Non EU Taxonomy investments

100%

i

k%

0%

l%

50%

100%

EU Taxonomy: Fossil gas
EU Taxonomy: Nuclear
EU Taxonomy: no gas and nuclear
Non EU Taxonomy investments

This graph represents __% of the total investments.

* For the purpose of these graphs, ‘sovereign bonds’ consist of all sovereign exposures.

What was the share of investments made in transitional and enabling activities?
[include a breakdown of the proportions of investments during the reference period][include note for thefinancial products
referred to in Article 6,
first paragraph, ofRegulation (EU)2020/852 that invest
in environmental
economic activities
that are notenvironmentally
sustainable economic
activities]

aresustainable
investments with anenvironmental
objective that do
not take into
account the criteria
under the EU
taxonomy.

How did the percentage of EU Taxonomy investments compare with previous
reference periods? [include where at least one previous periodic report was provided]

What was the share of sustainable investments with an environmental
objective that did not meet the criteria of the EU Taxonomy? [include section only
for the financial products referred to in Article 6, first subparagraph, of Regulation (EU) 2020/852 where
the financial product included sustainable investments with an environmental objective that invested ineconomic activities that are not environmentally sustainable economic activities, and explain why thefinancial product invested in economic activities that were not EU Taxonomy-aligned]

What was the share of socially sustainable investments? [include only where thefinancial product included sustainable investments with a social objective]

What investments are not in line with the product’s environmental orsocial characteristics, what was their purpose and were there any
minimum environmental or social safeguards? [include information referred to in
Article 56a of this Regulation]

142

What actions have been taken to meet the environmental and/or social
characteristics during the reference period? [include the information referred to in Article 56bof this Regulation]

How did this product perform compared to the reference benchmark and how
was the benchmark monitored to ensure consistency with the environmental
and/or social characteristics of the product? [include section where an index has been[include note forfinancial products
where an index has
been designated as areference benchmark
for the purpose of
attaining theenvironmental orsocial characteristics
promoted by thefinancial product]

Reference
benchmarks areindexes to see how
well a productperforms
compared to anindex with similar
objectives orfeatures.

designated as a reference benchmark for the purpose of attaining the environmental or social characteristics
promoted by the financial product. Specify how this financial product performed with regard to thesustainability indicators to determine the alignment of the reference benchmark with the environmental orsocial characteristics promoted, how this financial product performed compared with the reference benchmark
and indicate where the methodology used for the calculation of the designated index can be found]

How does the reference benchmark differ from a broad market index?

How did this product perform compared with the broad market index?`143

ANNEX V
Template periodic disclosure for the financial products referred to in Article 9, paragraphs 1 to 4a, ofRegulation (EU) 2019/2088 and Article 5, first paragraph, of Regulation (EU) 2020/852
Product name: [complete]

Legal entity identifier: [complete]

Reference period:[add reference period]

Periodic information: Sustainable investment objective

This product has sustainable investment as its objective.
Sustainable
investments
contribute to an
environmental orsocial objective anddo not causesignificant harm toenvironment andsociety.

The EU Taxonomy
defines
environmentally
sustainableeconomic activities
according to specificcriteria. Not all
sustainable
investments with anenvironmental
objective meet the
EU Taxonomy
criteria.

[in this box include what was the product’s sustainable investment objective – 250 characters limit withspace]

This product made [q]% sustainable investmentsq%[if r%>0 use dark green icon and text:] This product made [r]% EU taxonomy
investments [r calculated according to Article 17 of this Regulation][if r%=0 use grey icon, remove dark green box on the right and use text:] This productdid not make EU taxonomy investments.

r%This product considered the most significant negative impacts of its investments on theenvironment and society. [use grey icon, and “did not consider” instead of “considered” where theproduct does not]
CO2

This product targets a reduction of ___% of greenhouse gas emissions in the atmosphere by ___[include this statement and icon where the product has a GHG emission reduction target that is
not compatible with limiting global warming to 1.5 °C]
This product targets a reduction of greenhouse gas emissions in the atmosphere to limit global
warming to 1.5 °C. [include this statement and icon where the product has a GHG emission
reduction target compatible with limiting global warming to 1.5 °C]

To what extent was the sustainable investment objective of this product met?
[list the sustainable investment objective of this financial product, and describe how the sustainable
investments contributed to the sustainable investment objective. For the financial products referred to in
Article 5, first paragraph, of Regulation (EU) 2020/852, in respect of sustainable investments withenvironmental objectives, indicate to which environmental objectives set out in Article 9 of Regulation (EU)2020/852 to the investment underlying the financial product contributed to. For the financial products
referred to in Article 9(3) of Regulation (EU) 2019/2088, indicate how the objective of a reduction in carbon
emissions was aligned with the Paris Agreement]

How did the indicators measuring the sustainable objectives of thisfinancial product perform?

…and compared to previous periods? [include for financial products where at least
one previous periodic report was provided]

How did this product consider the most significant negative impacts of its
investments on the environment and society (principal adverse impacts)?
[include section if the product considered principal adverse impacts on sustainability factors]

Principal adverse
impacts are the mostsignificant negative
impacts on theenvironment andsociety including
employee matters,
human rights,
corruption andbribery.
CO2[remove this box

where the producthas a Paris-aligned
decarbonisation
target] This
product is notaiming at limiting
global warming to
1.5 °C.

How much progress was achieved towards the product target of greenhousegases (GHG) emission reduction? [only include if the product’s pre-contractual disclosures
included a GHG emission reduction target in accordance with Article 14a(1) of this Regulation. Fill in thetable below with data from the pre-contractual disclosure and with measurements of progress to date,when available. If target(s) have not been met, provide an explanation and specify the corrective actions
planned to meet the target.
Where information on investee companies’ progress as regards GHG removals and storage or carbon
credits is not readily available, financial market participants shall provide details of the best efforts used
to obtain the information either directly from investee companies, or by carrying out additional research,cooperating with third party data providers or external experts or making reasonable assumptions andindicate that such information is not available.
For financial products referred to in Article 9(3) of Regulation (EU) 2019/2088 whose investment objective
is to track use an EU Climate Transition Benchmarks or an EU Paris-aligned Benchmark as defined in Article
3, points (23a) and (23b) of Regulation (EU) 2016/1011 , provide a hyperlink to information disclosed by
the benchmark administrator according to Article 59a(2) of this Regulation. Do not include any subsequent
question related to the topic below and proceed to the next section ‘What were the largest investments ofthis product?’][include only for
financial products thathave a GHG emission
reduction target]

Greenhouse gases(GHG) are thosegases, including
carbon dioxide, thatare responsible forthe “greenhouseeffect”. The
increasedconcentration ofthese gases in theatmosphere is thecause of global
warming.

[Baseline year]

GHG emission
reduction
targets (tCO2eq/€M)[Pre-contractual
disclosure Baseline GHG
emissions in
tCO2-eq/€M, notincluding GHG
removals andstorage andcarbon credits]

Progress
made [Add acolumn forprevious
reportingperiod withdata
available]

Progressmade[disclose
progressmadetowards theGHGemissions
reduction
targets(tCO2-eq/€M)
and anydifference
between the[disclose
progressmadetowards theGHGemissions
reduction
targets(tCO2-eq/€M)
and anydifference
between the[current
reportingperiod][Date ofexpectedachievementofintermediatetarget 1][Precontractual
disclosure –percentage ofthe GHG
emission
reductionintermediatetarget][Addcolumns forotherintermediatetargets][Date ofexpectedachievementof the final
target][Precontractual
disclosure –percentageof the GHG
emission
reduction
final target]145

target set for
the reporting
period andprogressmade]target set for
the reporting
period andprogress
made][Progress
made interms of GHG
removals
used (tCO2eq/€M)[include row
where
relevant][Precontractual
disclosure][Precontractual
disclosure][Precontractual
disclosure]

Baseline GHG
emissions[Progress
made interms of GHG
removals
used (tCO2eq/€M)[include row
where
relevant][Progress
made interms ofcarboncredits usedby investee
companies
and/orpurchased by
the financial
marketparticipant(tCO2-eq/€M)- include row
where
relevant][Precontractual
disclosure][Precontractual
disclosure][Precontractual
disclosure]

Baseline GHG
emissions[Progress
made interms ofcarboncredits usedby investee
companies
and/orpurchased by
the financial
marketparticipant(tCO2-eq/€M)- include row
where
relevant][include
onlyforfinancial products thathave a GHG emission
reduction target

Information
tobetter understand
the
level
of
ambition and scopeof the target can befound on the ‘GHG
emission reduction
target’ section of
the website [addlinks to website].

GHG removals
and storage(tCO2-eq/€M)[include row
where relevant]Carbon credits
used byinvesteecompanies
and/orpurchased by
the financial
marketparticipant(tCO2-eq/€M)[include row
where relevant]

How did the implementation of the investment strategy contribute to theachievement of the target? [indicate how the investment strategy was implemented,
explain any obstacle encountered and the extent to which it hampered progress towards thetarget(s). Mention any change made to the investment strategy over the last reporting period. ]What were the largest investments of this product?

Largest investments

Sector% Assets

Country

during: [reference period]146

What was the proportion of sustainable investments?
Asset allocation
describes the shareof investments inspecific assets.

What was the asset allocation? include information referred to in Article Article 61(a)and (b) of this Regulation]

In which economic sectors were the investments made? [include information[include note only forthe financial products
referred to in Article 5,
first paragraph, ofRegulation (EU)2020/852

Taxonomy-aligned
activities are
expressed as a shareof:- turnover reflecting
the share ofrevenue fromgreen activities ofinvestee companies- capital expenditure(CapEx) showing
the green
investments madeby investee
companies, e.g. fora transition to agreen economy.
- operational
expenditure (OpEx)
reflecting green
operational
activities ofinvesteecompanies.

referred to in Article Article 61(c) of this Regulation]

How did the sustainable investments not cause significant harm to any
sustainable investment objective?

How have the indicators to assess the most significant negative impacts of
the investments on the environment and society been taken into account forthis assessment? [explain how the indicators for adverse impacts in Table 1 of Annex I andany relevant indicators in Tables 2 and 3 of Annex I were taken into account. If the financial
product used thresholds to determine that sustainable investments do not significantly harm
any environmental or social objective under the PAI indicators in Annex I of this Regulation,
provide a concise explanation of how they were determined and provide a hyperlinkto thesection on the website where further explanations and the thresholds are disclosed.]

Link where detailed information is provided:
Were sustainable investments consistent with the relevant international
standards? Details: [include an explanation on the alignment with the OECD Guidelines
for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights,
including the principles and rights set out in the eight fundamental conventions identified in
the Declaration of the International Labour Organisation on Fundamental Principles and Rights
at Work and the International Bill of Human Rights]

147

[include note for thefinancial products
referred to in Article 5,
first paragraph, ofRegulation (EU)2020/852.

What was the proportion of EU taxonomy investments? [include section for

To comply with the
EU Taxonomy, thecriteria for fossil gas
include limitations
on emissions andswitching to fully
renewable power or
low-carbon fuels by
the end of 2035. For
nuclear energy, thecriteria include
comprehensive
safety and waste
management rules.

the financial products referred to in Article 5, first paragraph, of Regulation (EU) 2020/852 andinclude information in accordance with Article 62 of this Regulation]

Did the product invest in fossil gas and/or nuclear energy related activities
complying with the EU Taxonomy72?
Yes: [specify below, and details in the graphs of the box]
In fossil gas

In nuclear energyNo[include note for thefinancial products
referred to in Article 5,
first paragraph, ofRegulation (EU)2020/852.

The two graphs below show in green the percentage of EU Taxonomy investments. As there is no
appropriate way to determine if sovereign bonds* meet the criteria of the EU Taxonomy, the firstgraph shows the share of EU Taxonomy investments in relation to investments of the financial productincluding sovereign bonds, while the second graph shows the share of EU Taxonomy investments inrelation only to the investments of the financial product other than sovereign bonds.

Enabling activities
directly enable otheractivities to make a
substantial
contribution to an
environmental
objective
Transitional activities
are activities forwhich low-carbon
alternatives are not
yet available andamong others havegreenhouse gas
emission levels
corresponding to thebest performance.

[Include information on EU Taxonomy-aligned fossil gas and nuclear energy and the explanatory text inthe left hand margin on the previous page only if the financial product invested in fossil gas and/or
nuclear energy EU Taxonomy-aligned economic activities during the reference period]

2. Share of EU Taxonomy investments
excluding sovereign bonds*d%1. Share of EU Taxonomy investments
including sovereign bonds*d%Turnovera% b% c%Turnover

a%

CapEx

d%

b%

h%

i%

CapEx

d% f%

g%

e%

m%
j
k%

OpEx
0%

c%

f%

m%

OpEx

l%

50%

EU Taxonomy: Fossil gas
EU Taxonomy: Nuclear
EU Taxonomy: no gas and nuclear
Non EU Taxonomy investments

100%

i

0%

k%

l%

50%

100%

EU Taxonomy: Fossil gas
EU Taxonomy: Nuclear
EU Taxonomy: no gas and nuclear
Non EU Taxonomy investments

This graph represents __% of the total investments.

* For the purpose of these graphs, ‘sovereign bonds’ consist of all sovereign exposures.

What was the share of investments made in transitional and enabling
activities? [include a breakdown of the proportions of investments during the reference period]

72

Fossil gas and/or nuclear related activities will only comply with the EU Taxonomy where they
contribute to limiting climate change (“climate change mitigation”) and do no significant harm to any EU
Taxonomy objective - see explanatory note in the left hand margin. The full criteria for fossil gas andnuclear energy economic activities that comply with the EU Taxonomy are laid down in Commission
Delegated Regulation (EU) 2022/1214.

148

[include note for thefinancial products
referred to in Article 5,
first paragraph, ofRegulation (EU)2020/852 that invest
in environmental
economic activities
that are notenvironmentally
sustainable economic
activities]

aresustainable
investments with anenvironmental
objective that do
not take into
account the criteria
for environmentally
sustainableeconomic activities
under the EU
Taxonomy.

How did the percentage of EU Taxonomy investments compare withprevious reference periods? [include where at least one previous periodic report wasprovided]

What was the share of sustainable investments with an environmental
objective that did not meet the criteria of the EU Taxonomy? [include only forthe financial products referred to in Article 5, first paragraph, of Regulation (EU) 2020/852 where thefinancial product included investments with an environmental objective that invested in economic
activities that are not environmentally sustainable economic activities and explain why the financial
product invested in economic activities that were not taxonomy-aligned]

What was the share of socially sustainable investments? [include only where thefinancial product includes sustainable investments with a social objective]

What investments were not sustainable, what was their purpose and were
there any minimum environmental or social safeguards? [include the informationreferred to in Article 62b]

What actions have been taken to attain the sustainable investment objective
during the reference period? [include the information referred to in Article 62c of thisRegulation]

How did this product perform compared to the reference sustainablebenchmark and how was the benchmark monitored to ensure consistency
with the sustainable investment objective of the product? [include section only for[include note forthe financial
products referred
to in Article 9(1) ofRegulation (EU)2019/2088]
Reference
benchmarks areindexes to see how
well a productperforms compared
to an index withsimilar objectives orfeatures.

the financial products referred to in Article 9(1) of Regulation (EU) 2019/2088 and indicate where themethodology used for the calculation of the designated index can be found]

How did the reference benchmark differ from a broad market index?

How did this product perform compared with the broad market index?

149

5. Preliminary Impact Assessments
This section contains an assessment of impacts of the proposals in this Consultation Paper.
According to the ESA Regulations, the ESAs conduct analysis of costs and benefits when drafting
RTS. The analysis of costs and benefits is undertaken according to an impact assessment
methodology assessing pros and cons of various options. The draft RTS and its impact assessment
are subject to public consultation.

Review of the RTS adopted by the Commission as SFDR Delegated Regulation on 6 April
2022.
1. Problem definition
The area of sustainable finance disclosures is a fast and revolving area, and to reflect the increased
demand for high quality sustainability-related information the Commission has deemed necessary
to invite the ESAs to review the RTS submitted by the ESAs on 4 February 2021 and on 22 October
2021 and adopted by the Commission as SFDR Delegated Regulation on 6 April 2022. To meet therequest, the ESAs have proposed the following changes:•

Extension of the list of universal social indicators for principal adverse impacts (PAI);•

Disclosure of GHG emissions reduction targets, including consideration of whether thefinancial products making taxonomy-aligned investments (referred to in Articles 5-6 of theTaxonomy Regulation) sufficiently address the disclosure information on taxonomy-aligned
economic activities.

In addition to what was explicitly requested by the Commission, the ESAs have considered further
changes to the SFDR Delegated Regulation based on experience shared by stakeholders andNational Competent Authorities. Those proposed changes relate to:•Technical revision to the PAI indicators;•

DNSH disclosure design options;•

Simplification of the templates; and•Other technical changes.

2. Objectives
The amendments proposed in this consultation paper are designed to enhance the quality of thesustainability-related information disclosed under the SFDR Delegated Regulation for moretransparent and more comparable disclosures.
Policy options
Policy issue 1: Extension of the list of universal social indicators for principal adverse impacts
150

Option 1.1: Status quo
Under this option, the ESAs would determine that the social indicators already developed are
sufficient to ensure comprehensive transparency about the negative consequences of investment
decisions on social factors.
Option 1.2: Alignment with European Sustainability Reporting Standards (ESRS) additions
This option consists of the addition of new PAI indicators related to social factors that are consistent
with the ESRS reporting under the CSRD.
Option 1.3: Non-ESRS new social indicators
It is also possible for the ESAs to add additional new social indicators not covered by the ESRS inorder to ensure a comprehensive coverage of social adverse impacts.
Policy Option 1: Status quo
Pros

Cons

Ensure continuity in the disclosures of the Current mandatory social indicators areexisting indicators by FMPs
considered too few to ensure a coherent andconsistent coverage for PAI purposes
Allows a longer time period to consider whether The ESAs would determine that thethe originally proposed indicators sufficiently Commission’s request in the mandate tocaptured social adverse impacts
expand on the social indicators is notnecessary
Policy option 2: Alignment with European Sustainability Reporting Standards (ESRS) additions
Pros
Ensure consistency
provisions

with

Cons
existing

policy There may be important social indicators
currently not reported under ESRS

Less burdensome disclosures for FMPs
Reduce the risk of data challenge
Policy option 3: Non-ESRS new social indicators
Pros

Cons

151

Possibility of introducing additional social Discrepancy between SFDR and ESRS leads toindicators currently not considered within ESRS. data gap for SFDR disclosures
Increased risk of data challenge
Policy issue 2: GHG emissions reduction targets disclosures
Option 2.1: Yes/No question only in templatesThis option consists of only requiring financial products to disclose whether they have adecarbonisation target (or GHG emissions reduction target).
Option 2.2: Basic disclosure (Yes/No question) in templates and website details
This option consists of including some basic information in the financial product templates about
the existence of a target and if so what kind of target the financial product had and how it intended
to meet it, with more methodological details to be made available on the website.
Option 2.3: Mandatory GHG emissions reduction targets disclosures
This option would require all financial products to disclose their level of success in meeting a GHG
emissions reduction target, so that if financial products did not have a target they would have todisclose no success in meeting such a target.
Policy option 2.1: Basic disclosure (Yes/No question) in templates
Pros

Cons

Ensure comprehensibility of and easy access to Limited information provided based only on abasic indication on GHG emissions reduction simple question
targets
No additional disclosures needed for those No explanation as to how GHG emissions
financial products without GHG emissions reduction targets are achieved if the financial
reduction targets.
product has a target.
UnlikelytosatisfytheEuropeanCommission’s mandate to the ESAs
Policy option 2.2: Basic disclosure (Yes/No question) in template and website details (preferred
option)
Pros

Cons

152

Simple, understandable indication for end- Limited information on GHG emissions
investor of pursuit of any GHG emissions reduction available on templates.
reduction targets
Availability of additional, detailed information Detailed information available on website
on GHG emissions reduction targets on website only might not be accessible to all investors.
Policy option 2.3: Mandatory GHG emissions reduction targets disclosures
Pros

Cons

Ensure standardisation of GHG emissions Unlikely to be legally possible to design
reduction disclosures among FMPs
disclosures having a target mandatory for all
Article 8 and 9 SFDR financial productsHigh informative, qualitative level of disclosures Significant burden in terms of time and cost
supporting informed investment decision
for FMPs making available sustainablefinancial products
Risk of information overload for endinvestors, thus not justifying the potential
added value.
Policy issue 3: DNSH disclosure design options
The options for the DNSH disclosure design framework are described in the background analysis
section above under paragraphs 49-58.
Option 3.1: Status quo (with slightly enhanced red text instructions)
Option 3.2: PAI threshold disclosures (and feedback on an optional safe harbour forenvironmental DNSH for taxonomy-aligned activities)
Option 3.3: Longer term considerations: Taxonomy DNSH alignment for environmental DNSH in
SFDR
Policy option 3.1: Status quo (with slightly enhanced red text instructions)
Pros
Avoid market disruption
implementation costs.

Cons
and

No application burden for FMPs

additional Wide discretion given to FMPs to design the
DNSH methodology
Likelihoodofgreenwashing“sustainable investments”

under

153

Enables some flexibility and tailoring to the Reduced comparability among “sustainablespecificities of products and investments
investments” as applied criteria may diverge
from one FMP to another
Policy option 3.2: PAI threshold disclosures (and feedback on an optional safe harbour forenvironmental DNSH for taxonomy-aligned activities) (preferred option)
Pros

Cons

Reduce the wide discretion given to FMPs Additional transparency alone is notdefining what constitutes significant harm.
expected to prevent the risk that the DNSH
test is applied by FMPs in a way that is notconsidered to prevent harmful investments
being considered sustainable.
PAI threshold disclosures by FMPs would allow Optional safe harbour may result in greater
better transparency and comparability between application burden due to need to comply
financial products.
with stricter Taxonomy criteria for part of theinvestment
Encourage use of the taxonomy and use ofproceed instruments.
Policy option 3.3: Longer term considerations: Taxonomy DNSH alignment for environmental
DNSH in SFDR
Pros

Cons

Consistent definition of DNSH in SFDR regarding Establishing a direct link or cross-reference
environmental harm and the Taxonomy between the Taxonomy Regulation and SFDR
Regulation.
link would have a significant market impact,because the TSC are stricter than the current
application of the DNSH under SFDR
PAI indicators would be more measurable, thediscretion for FMPs would be reduced and there
would be a single definition of DNSH within the
EU sustainable finance framework

A key difference between the current DNSH
test in SFDR and the Taxonomy Technical
Screening Criteria (TSC) is that the TSC aretailored to specific economic activities while
the DNSH test in SFDR is investment-based.
This implies a great degree of difficulty inmapping the TSC to the current SFDR PAI
indicators

154

Minimise the risk of greenwashing given that the An alignment to the current Taxonomy willTaxonomy TSC are detailed and are expected to have an impact only on the environmental
filter out harmful investments
indicators, while the DNSH test for social
indicators will not benefit from relevant
screening criteria
Would require Level 1 reform before suchprovisions could be enacted in the SFDR
Delegated Regulation
Policy issue 4: Template simplification
Option 4.1: Status quo
Under this option, the ESAs would not make any changes to the presentation and language of
information in the SFDR financial product templates.
Option 4.2: Dashboard summaries replacing tick-box
The ESAs are considering replacing the current tick-boxes in the financial product templates withdashboards summarising the key information in the templates, especially the three key
commitments in the pre-contractual templates: (1) investments used to meet the characteristics orsustainable objectives of the financial product, (2) sustainable investments and (3) taxonomyaligned investments.
Option 4.3: Additional dashboard summaries separated from templates
Under this option, the ESAs would separate the dashboards referred to in Option 4.2 from thetemplates entirely to make them additional to the templates.
Policy option 4.1: Status quo
Pros

Cons

Ensure continuity and comparability with The excessive length of templates andcurrent reporting templates
complexity of the information presented
would remain unaddressed
Would allow more time to consider the benefits During consumer testing of the original
and drawbacks of the current SFDR financial templates the ESAs found that consumers
product templates
experienced information overload, which
would remain unaddressed under this option
Policy option 4.2: Dashboard summaries replacing tick-box

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Pros

Cons

Enhance the comprehensibility of the Change of the templates currently in use by
information to retail investors by providing key FMPs
information in a more easily accessible format
Possibility to verify the key information with thedetailed information provided in the template
Ensure simplification of current templates andlanguage to reduce information overload
Policy option 4.3: Additional dashboard summaries separated from templates
Pros
Enhance visibility(dashboard)

of

Cons
simplified

summary Risk that investors do not read the full
information provided in the templates
No simplification of current disclosure
templates.

3. Analysis of impact
The ESAs’ approach in terms of extension of the list of universal social indicators for principal
adverse impacts is to rely primarily upon the draft European Sustainability Reporting Standards(ESRS) published by EFRAG as mandated by the CSRD. The draft ESRS have been chosen as they will
be applied by all companies under the scope of CSRD, thus reducing the burden of disclosure andensuring coherence between legislation. As the expansion of the social indicators is part of themandate by the Commission to the ESAs, the ESAs did not consider sticking to the status quo of thecurrent list of social indicators. The ESAs agreed with the Commission that the current list of social
indicators is insufficient and considered how to align the list of social indicators to those in the draft
ESRS, with the intention to facilitate the reporting and ensuring consistency throughout existingsustainable finance legislative provisions. Finally, the ESAs have reached the conclusion that inaddition to the social indicators reported in the ESRS, certain additional mandatory indicators
currently not reported under ESRS, but required under BMR or available in financial reporting, may
be useful for the purpose of PAI disclosures.
The ESAs’ goal concerning the amendments of the pre-contractual and periodic disclosures of GHG
emissions reduction targets is to enhance the transparency of such disclosures driven by thepotential increase in the supply of products featuring targets and investment strategies aimed atclimate change mitigation. This was also a request by the Commission in its mandate to the ESAs.
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The ESAs rejected a simple yes/no question in the templates clarifying whether the financial
product has GHG emissions reduction targets or not as being insufficiently transparent, potentiallygiving rise to greenwashing. Because such information would be limited (and potentiallymisleading) in content, the ESAs’ preferred option would be to require basic information about apotential GHG emissions reduction target in the financial product templates and then require moredetails in the website financial product disclosures. A further option that was considered was amandatory GHG emissions reduction target disclosure. This option, while providing a granular
disclosure for all financial products on such targets, would be legally questionable in a disclosurebased framework.
The ESAs’ starting point for the proposed DNSH design options is the concern that in the current
version FMPs benefit from a wide discretion when designing the DNSH test for sustainable
investments. This would increase the risk of greenwashing as a result of the application of differing
DNSH test methodologies among FMPs.
A first option would be to keep the status quo, thus not changing the Level 2 requirements. This
option could be complemented by addressing the Commission on the need of a Level 1 review.
However this would mean that the discretion in the current framework will not be addressed forseveral years. The ESAs preferred option is to require the disclosure of the thresholds forenvironmental PAI indicators used to design the DNSH test. The published thresholds would allow
a certain degree of comparability among financial products while the safe harbour would allow
satisfying the DNSH test for those environmental PAI indicators complying with the technicalscreening criteria of the EU taxonomy. The ESAs are aware that this option would not fully address
the issues of comparability and greenwashing but it would enhance transparency. The ESAs alsoseek feedback about the benefits of an optional safe harbour for environmental DNSH for
taxonomy-aligned economic activities.
The ESAs further discussed the longer term consideration of a full alignment with the EU Taxonomy,
meaning full compliance with the Taxonomy technical screening criteria for all Taxonomy-eligible
economic activities of investee companies in order to pass the DNSH test for the environmental PAI
indicators.
While addressing the risk of greenwashing and eliminating the inconsistency between the SFDR
definition of environmental significant harm and that of the Taxonomy (to the benefit of the latter),this consideration was rejected in the short term as it would require more fundamental Level 1
reform of SFDR before disclosure-related changes could be enacted in the Delegated Regulation.
The ESAs further discussed the opportunity to simplify the current reporting templates to enhancecomprehensibility for retail investors. At first, the ESAs were reluctant to undertake such changes
as the current reporting templates have just started to be used. However the importance ofproviding key information in a more easily accessible format to investors has driven the ESAs toconsider as preferable the option of developing a “dashboard” for both pre-contractual andperiodic disclosures providing the most important information to investors and possibly using asimpler language and terminology. This dashboard would replace the current tick-box. The ESAs areof the opinion that this option would best serve the goal of increasing comprehensibility andsimplification.

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The use of a dashboard has spurred further considerations by the ESAs to use them as a separate,
additional information from the current templates. This would allow having a summary of the key
features of the financial product while keeping the current reporting templates unchanged. This
option has its merit in providing an easy-to-go source of information together with the current full
disclosures. However it would not serve the purpose of simplifying the current reporting templates,in fact adding an additional information panel that may even create confusion for retail investors.

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