Banco Finantia

Thinking about the future is acting Now

Banco Finantia governs its day-to-day activities based on sustainable responsibility, inclusion, respect, innovation, concern for the environment and mutual help. It recognizes that environmental, social and governance issues (ESG) pose major challenges to the long-term prosperity of the global economy, the well-being of people and society, and the regeneration capacity of the natural environment and that it impacts performance long-term business.

The work carried out by the Intergovernmental Group on Climate Change has been the foundation of international agreements, such as the Paris Agreement, to fight the effects of climate change and to support the transition to a sustainable society.

Banco Finantia is therefore committed to supporting its customers and the economy in their transition to a sustainable economy, making known financial products and/or services from business activities that are environmentally and socially responsible, combining good long-term performance with social fairness and environmental protection, in line with its sustainability commitments.

Sustainability is about Building, Thinking of the future

Sustainability issues can have a favorable effect on contributing to a company's long-term financial performance and contribute to further economic, social and environmentally sustainable progress. Thus, incorporating these considerations into the investment research, portfolio construction, portfolio review, and direction processes of portfolio managers can help improve long-term risk-adjusted returns by making investment decisions that take financially into account ESG’s information relevant. It also pays special attention to the issues of worker's health, safety and human rights and the impact on local communities.

What is Sustainable Investment?

According to the Sustainable Finance Disclosure Regulation (SFDR), it is Investment in an economic activity that contributes to an environmental objective, in particular an investment that contributes to fighting inequalities or that promotes social cohesion, social integration and labor relations, or an investment in human capital or in economically or socially disadvantaged communities, provided that such investments do not significantly harm any of these objectives and that the companies benefiting from the investment employ good governance practices.

The growing demand by investors for “green” financial products, together with unclear rules on what considered a sustainable financial product (including relevant methodological differences in ratings by rating agencies specializing in the ISR36 criteria) has resulted in the growth of the so-called greenwashing effect. In that regard, securities market regulators from different geographies have adopted different measures to provide greater transparency and homogeneity in the application of criteria.

What is the SFDR Regulation?

The SFDR was developed by the European Commission and aims to standardize definitions and concepts, with all companies disclosing their strategic business and their political decisions, focusing on sustainable investment products and thus promoting sustainable investment in Europe, with greater transparency and data on sustainable risks and opportunities. In this sense, the SFDR Regulation goes one step further and requires entities to integrate not only financial risks, but also non-financial risks and in particular relevant sustainability risks that may have a material negative effect on the financial profitability of the investment.

Sustainability and climate risks

We understand that sustainability risk and climate risk are investment risks, and that integrating sustainability considerations into our advisory and active investment process, as well as the index strategies we propose, can help investors build more resilient portfolios and to achieve better performance. Hence the importance of this regulation

Venture capital. All financial investments carry an element of risk. Therefore, the value of the investment and the income resulting from it will vary and the amount of the initial investment cannot be guaranteed. In other words, every investment is associated with an expectation of return based on its level of risk: the greater the expected return, the greater the level of risk being assumed. Past performance is not a reliable indicator of current or future results and should not be the only consideration when selecting a product or strategy. Changes in exchange rates between currencies may cause the value of investments to decrease or increase. The fluctuation can be particularly pronounced in the case of a fund with greater volatility and the value of an investment can drop sharply and substantially. Tax levels and base may change from time to time.

Climatic Risks: is the possible negative impact that a climatic event can cause to a good, society or ecosystem. It is not necessarily physical and caused only by climate change, it may be associated with other aspects such as transition.

Transition risks: those that appear on the path to a sustainable economy which can be: regulatory, legal, technological, market or reputational..

Legal risks: correspond to legal proceedings that organizations may suffer for inadequate management of climate impacts on the communities in which they operate.

Technological risk: the need to incorporate new technologies into production processes also contributes to climate risk, given its potential to affect competitiveness and production costs.

Reputation risk: the need to properly integrate ESG aspects into the Entity's strategy, specifically in the management of client and investment portfolios.

Operational risk: losses in the event of incorrect advice from an Entity, or in the absence of an assessment of sustainability risks that may affect it.

Your Private Banker will be happy to organize a more detailed meeting about the opportunity presented by sustainable investment.

For more information, please see here the Policy on Integration of Sustainability Risks in Customer Financial Services.

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