Information related to EU Sustainable Finance Disclosure Regulation (“SFDR”)

The EU Sustainable Finance Disclosure Regulation (“SFDR”) aims to increase transparency on how financial market participants integrate sustainability (or Environmental, Social and Governance, “ESG”) risks and opportunities into their investment decisions. The SFDR introduces a classification system with new disclosure requirements for certain financial products. NN Hellas is in scope of the SFDR.
The introduction of the SFDR helps to ensure that NN Hellas and similar financial institutions disclose their approach towards sustainability, and we support this goal. The result of the SFDR will be transparency via disclosures on our website and in certain product documents to enable customers, investors and other stakeholders to compare different products with respect to their ESG risks and sustainable investment objectives.

The expected timelines of the SFDR will run from 10 March 2021 until the end of 2022 (considering the links of the SFDR with other sustainable finance regulations) meaning that NN Hellas will continue to implement new (disclosure) requirements in the years to come. NN Hellas has updated relevant website disclosures and product documentation to ensure compliance with the legal requirements per 10 March 2021.The updates are based on the legal requirements as laid down in the SFDR high-level legislation (level 1). The information on this page cannot be seen as being related to the SFDR draft detailed legislation (level 2) and hence will not be used in product documentation, website disclosures prospectuses and other documentation. NN Hellas will monitor the developments regarding the SFDR draft level 2 legislation and will implement the SFDR level 2 legislation once this becomes applicable.  

This page includes all information on our approach to the SFDR and what we have done so far. It includes information on:
● Sustainability risk policies;
● Adverse sustainability impacts;
● How our remuneration policy integrates sustainability risks; and
● How our financial products under the SFDR are classified.

 

Sustainability risk policies
NN Hellas applies the Responsible Investment Framework policy of the NN Group (the “RI Framework policy”), that supports “the systematic incorporation of Environmental, Social, and Governance (“ESG”) factors into the investment process, managing both risks and opportunities.” This helps making better informed investment decisions and to optimize the risk/return profile of the investment portfolios, as well as to reflect NN’s values in the investment process and to better align our business with the broader objectives and expectations of society regarding sustainability.
The RI Framework policy applies to our Proprietary Assets and in some cases to Client Assets as defined in the RI Framework policy.
The NN Group has defined ESG risk as “the risk being (in)directly associated with violations of environmental and social standards and norms” and ESG Investment risk as “Risk that ESG factors with respect to investments and/or investment proposals are not sufficiently understood or recognised, leading to assets losing value or missed investment opportunities”.
In what follows, we describe how the RI Framework policy is applied to NN’s own asset managers, as well as external assets managers.
The RI Framework policy requires that we establish a process to systematically incorporate ESG factors into our investment decision-making process. In brief we do so by implementing a variety of Responsible Investment (“RI”) strategies:
● Applying NN’s norms-based RI criteria, excluding investments in some specific industries or companies;
● Integrating, where relevant, material ESG risks and opportunities into the research and analyses of investments;
● Exercising active ownership through voting and engagement;
● Exercising restrictions (as a measure of last resort).
The RI Framework policy sets out norms-based RI criteria through which investments in companies involved in certain activities are excluded. Such activities include, but are not limited to:
● Development, production, maintenance or trade of Controversial Weapons;
● The controversial supply of arms;
● Tobacco production;
● Mining of thermal coal;
● Corporates violating the standards of the United Nations Global Compact and OECD guidelines; and
● Countries subject to country-wide arms embargo sanctions.
NN Group asset managers that manage Client Assets pursuant to discretionary mandates, apply those elements of the RI Framework policy that are consistent with their fiduciary responsibilities and the mandate we have provided.
The NN Group asset managers apply the NN Restricted List, as described in the RI Framework policy.
NN Group’s asset managers, that manage UCITS, will apply those elements of the RI Framework policy that are consistent with their fiduciary responsibilities to the mutual fund and the investment guidelines of the mutual fund.
The NN Group asset managers will apply the NN Restricted List, as described in the RI Framework policy. If a mutual fund is obliged by their prospectus to replicate the composition of indices (i.e., passively managed products such as ETFs and index funds), we will ensure that the cumulative weighting in issuers for which legislation is in place prohibiting their financing, is not more than 5% of the related fund or index.
We did not consider the RI Framework policy when selecting UCITS managed by external asset managers to manage the Client Assets. UCITS managed by external asset managers cannot implement the NN RI Framework policy, because there are multiple investors that participate. Also, the NN Restricted List cannot be applied for the same reason.
For these funds, we will monitor the composition of such funds and we will ask those asset managers for responsible investment policies and restricted lists and will apply a risk-based approach if not available.
The information we have disclosed above is based upon the information that currently is available, also relying on information provided to us by third parties. Where third parties have not provided us with (adequate) information, we will continue our efforts to obtain this information. When more (adequate) information becomes available, we will amend our disclosures to reflect this.

Pursuant to the Sustainable Finance Disclosure Regulation, NN Hellas is required to disclose how we consider adverse sustainability impacts of investment decisions.
We consider principal adverse impacts on Environmental, Social and Governance factors by applying the Responsible Investment Framework policy of the NN Group (the “RI Framework policy”). The RI Framework policy supports “the systematic incorporation of Environmental, Social, and Governance (“ESG”) factors into the investment process, managing both risks and opportunities.”
Further to the strategies described regarding the integration of sustainability risk, this implies integration of material ESG risks and opportunities into the research and analyses of investments, as well as consistent demonstration and documentation of ESG factors integration for each individual investment analysis. NN norms-based RI criteria, relevant laws, NN’s values and internationally recognized standards such as the United Nations Global Compact and the OECD Guidelines for Multinational Enterprises serve as guidelines hereto. At the moment, the alignment with the 1.5℃ target of the Paris Agreement for Client Assets has not yet been included in a formal policy. However, NN Group has taken the first steps thereto with respect to its Proprietary Assets.
We recognize that full consideration of principle adverse impact is a step-by-step process where we keep making improvements. We intend to provide more detail on the implication of principal adverse impacts when the SFDR level 2 requirements enter into force. In what follows, we describe how the RI Framework policy is currently applied to NN’s own asset managers, as well as to its external assets managers.
Pursuant to the RI Framework policy we instruct our asset manager to implement a variety of Responsible Investment (“RI”) strategies to consider principal adverse impacts as set out in the RI Framework policy.
For more information on the NN norms-based RI criteria, please refer to the RI Framework policy [https://www.nn-group.com/sustainability/responsible-investment/sustainable-finance-regulation.htm].
NN Group’s asset managers, that manage UCITS, will apply those elements of the RI Framework policy that are consistent with their fiduciary responsibilities to the mutual fund and the investment guidelines of the mutual fund.
We did not consider the RI Framework policy when selecting UCITS managed by external asset managers to manage the Client Assets. UCITS managed by external asset managers cannot implement the NN RI Framework policy, because there are multiple investors that participate. Also, the NN Restricted List cannot be applied for the same reason.
For these funds, we will monitor the composition of such funds and we will ask those asset managers for responsible investment policies and restricted lists and will apply a risk-based approach if not available.
The information we have provided above is based upon the information that currently is available, also relying on information provided to us by third parties. Where third parties have not provided us with (adequate) information, we will continue our efforts to obtain this information. When in the future more (adequate) information becomes available, we will amend our disclosures to reflect this.

 

In NN Hellas we apply the Remuneration Policy which is drawn up in accordance with the NN Group Remuneration Framework Policy (the “Framework”). The Framework is aligned with NN Group business strategy, objectives, values and risk appetite and supports the creation of long-term value for all our stakeholders. Following the Framework, performance management is based on a number of financial and non-financial performance objectives. These objectives focus on robust and effective risk management, as well as balanced risk taking. This covers all types of risks, including ESG related risks. We refer to the NN Group Website: https://www.nn-group.com/sustainability/responsible-investment/sustainable-finance-regulation.htm for more information.

 

Classification of financial products under the SFDR
In line with the SFDR we include information in our product disclosures about how we integrate sustainability risks into investment decisions, and how we “classify” each product as outlined in the SFDR. The product classifications help our customers and other stakeholders identify whether a product is:
• Promoting environmental or social characteristics;
• Has a sustainable investment objective; or
• Is a mainstream product doing neither of the above.
These disclosures are included either in our pre-contractual product disclosures or on this website.

 

 

 

 

 

 

Uploaded on 10/03/2021

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