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Understanding Sustainability


Under new EU Regulation, effective August 2022, any person seeking advice on investments must disclose their preferences regarding sustainability. The rules on sustainability preferences aim to enhance client awareness of the availability of financial products with sustainability characteristics and to ensure that these considerations are included in the suitability assessment process. The goal of the EU Sustainable Finance Agenda is to channel more investment into sustainable assets and green the EU economy.

Environmentally Sustainable Investments

These are investments aligned to EU Taxonomy Aligned Investments. The EU Taxonomy is a green classification system that translates the EU’s climate and environmental objectives into criteria for specific economic activities for investment purposes. It recognises green, or ‘environmentally sustainable’, economic activities that make a substantial contribution to at least one of the EU’s six climate and environmental objectives while at the same time not significantly harming any of these objectives and meeting minimum social safeguards.

These six goals are:

1. Climate change mitigation
2. Climate change adaption
3. Sustainable protection of water and marine resources
4. Transition to a circular economy*
5. Pollution prevention and control
6. Protection and restoration of biodiversity and ecosystems.

* ‘Circular economy’ means an economic system whereby the value of products, materials and other resources in the economy is maintained for as long as possible, enhancing their efficient use in production and consumption, thereby reducing the environmental impact of their use, minimising waste and the release of hazardous substances at all stages of their life cycle, including through the application of the waste hierarchy.


Sustainable Investments

These are investments aligned to Sustainable Finance Disclosure Regulations (SFDR)

An investment in an economic activity that:

  • Contributes to an environmental objective – such as the efficient use of energy, renewable energy, use of raw materials, and/or
  • Contributes to a social objective – such as tackling inequality or fostering social cohesion, social integration, and labour relations.

These investments must also do no significant harm to any environmental or social objective while employing good governance practices.

There are three classifications of investments under SFDR:

  • Article 9 investments: These investments specifically have sustainable investments as their objective (for example investing in companies whose goal it is to reduce carbon emissions).
  • Article 8 investments: These investments promote environmental or social characteristics and can integrate sustainability into the investment process in a binding manner.
  • Article 6 investments: These investments are not promoted as having ESG factors or objectives.

Investments that consider Principal Adverse Impacts on sustainability factors

This investment considers the negative impact (adverse impacts) that it may have on environmental and social matters. So, this preference does not just focus on economic activities that aim at contributing to any environmental or social objective but considers the adverse effects of the investment on:

  • the environment (greenhouse gas emissions, hazardous waste, water emissions),
  • social matters (social violations, supplier codes of conduct),
  • employee matters (gender pay gap and gender diversity), and
  • respect for human rights, anti-corruption, and anti-bribery matters.


Our Factfind questionnaire now has three additional questions regarding sustainability. The questions will allow you, and Chartered Capital, understand your attitude to sustainability and how much risk you are prepared to accept when making an investment decision.  It is not trying to place you, as a person, in a particular risk or sustainability category. It does not constitute advice from Chartered Capital.


You should not rely solely on the sustainability questions to make an investment decision. In all cases, Chartered Capital will conduct a full financial review and fact-find with you and advise you accordingly.

Chartered Capital

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