Sustainable Finance Disclosure Regulation (SFDR)

Liontrust announces classification of GF Sustainable Future funds under the Sustainable Finance Disclosure Regulation (SFDR)

The three Ireland-domiciled funds managed by the Liontrust Sustainable Investment team are being classified as ‘Article 9’ under the new Sustainable Finance Disclosure Regulation (SFDR). The funds are the Liontrust GF Sustainable Future European Corporate Bond Fund, the Liontrust GF Sustainable Future Global Growth Fund and the Liontrust GF Sustainable Future Pan European Growth funds.

The Liontrust Sustainable Investment team has also been managing a range of UK-domiciled Sustainable Future funds since 2001 which are not covered by the SFDR.

Significant consideration has been given to our internal classification process, with particular focus on ensuring that we are not only compliant with the letter of SFDR but also the spirit.  We have set strict standards for our products to classify as Article 9 and are confident that the Sustainable Future funds meet not only our expectations of a true sustainable investment product but also that of the regulator and our clients.

We are currently in the process of implementing all applicable firm and product-level disclosures for the initial March 2021 deadline and subsequent reporting deadlines in 2022 and beyond. 

The SFDR forms a key part of the EU’s overall sustainable finance framework and comes into force on 10 March 2021.

It aims to tackle ‘greenwashing’ within financial markets by introducing mandatory disclosure requirements on the Environmental, Social, and Corporate Governance (ESG) features of financial products.  These disclosures are intended to provide greater transparency on the degree to which sustainability considerations drive how the investment process is managed, requiring firms to provide information in a standardised way, aiding comparability.

As one of the core requirements, SFDR asks firms to classify their products into one of the following:

  • Article 9 – which have a sustainable investment objective (with a strong ESG focus); or
  • Article 8 – which promote, amongst other characteristics, environmental or social characteristics (with some degree of ESG focus);
  • Article 6 – for those products which do not fall into either Article 8 or 9 (with no ESG focus).

We welcome this move to greater transparency for investors in sustainable funds and helping to identify greenwashing.

You can find more information about our Sustainable Investment team and the funds they manage here.

Liontrust Sustainable Investment - Investing in a Changing World

 

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