EU Sustainable Finance Disclosure Regulation
The EU Sustainable Finance Disclosure Regulation (SFDR) is a new set of European Union rules that came into effect on March 10, 2021, with the goal of making the sustainability profile of funds more comparable and easy to understand for investors. They categorise products into specific types and include metrics for assessing the environmental, social and governance (ESG) impacts of the investment process for each fund.
As the name suggests, this regulation will place much more emphasis on disclosure. The information on this page describes our approach to SFDR and includes our policies and procedures, disclosed in accordance with these new rules.
Many of our clients will also be subject to these new requirements. Apart from our disclosures in prospectuses, annual reports and on this website, we will provide our clients with the information they need to comply with SFDR.
Background to SFDR and how it impacts Aviva Investors
SFDR is part of the EU’s wider Sustainable Finance Framework, which is backed by a broad set of new and enhanced regulations that will apply across the region. The framework includes the Sustainable Finance Action Plan, which aims to promote sustainable investment across the EU, and a new Taxonomy to categorise economic activity through a sustainability lens and help create a level playing field across the region.
Many of the new measures are a response to the landmark Paris Agreement on climate change in December 2015, and the United Nations 2030 Agenda for Sustainable Development published earlier the same year, which set out the 17 Sustainable Development Goals. SFDR and other regulations are also aligned with the European Green Deal, which aims for the EU to be ‘climate neutral’ by 2050.
Product reporting obligations under SFDR
The most visible and impactful aspect of SFDR is the reporting format funds and mandates will need to make based on three categories, as laid out by Articles 8 and 9 of the SFDR and those funds not defined by either article, referred to as ‘neutral’ funds.
Neutral funds do not integrate any kind of binding sustainability controls into their investment process and can include stocks that may be excluded by ESG-focused funds, such as tobacco companies or thermal coal producers. While neutral funds are still allowed to be sold in the EU, they may not be promoted as ESG funds.
Among other characteristics, Article 8 products promote environmental or social characteristics, or a combination of those characteristics, provided the companies in which investments are made follow good governance practices.
Article 9, also referred to as ‘products targeting sustainable investments’, covers products targeting bespoke sustainable investments and those that have sustainable investment as their objective.
Aviva Investors fund classifications under SFDR
Currently, most funds managed by Aviva Investors will be classified as neutral under SFDR. We also have a number of Article 8 funds, including our Climate Transition range. We do not currently manage any Article 9 funds or mandates.
Aviva Investors has updated EU fund prospectuses, website product information and Key Investor Information Documents to align with SFDR rules where applicable, along with updated responsible investment policies shown below.
Aviva Investors Liquid Markets - Principle Adverse Sustainability Impacts Statement
To meet the requirements set out under Article 5 of the SFDR, we have published additional information on remuneration and ESG in our Pillar 3 disclosure.
Asset Class Responsible Investment Policies
Credit & Equities - Responsible Investment & Sustainability Risk Policy
This policy describes how we integrate our responsible investment philosophy into each asset class investment process. Credit and Equities covers funds managed by Aviva Investors that primarily invest in equities and bonds and includes money market funds.
Multi-Asset & Macro & Liability-Driven Investment - Responsible Investment & Sustainability Risk Policy
This policy describes how we integrate our responsible investment philosophy into each asset class investment process, Multi-asset covers a wide variety of product types including Multi-Strategy, Multi-Asset ranges, Fund of Funds, Liability Driven Investment, Global Convertibles.
Real Assets - Responsible Investment & Sustainability Risk Policy
This policy describes how we integrate our responsible investment philosophy into each asset class investment process, Real Assets covers traditional real estate products and our alternatives real assets business including infrastructure equity and commercial property/private market debt.
Discover our responsible investment policies.
Aviva Investors Luxembourg Sustainability Risk Policy
Aviva Investors Luxembourg (AILX) recognises and embraces its duty to act as long-term stewards of clients’ assets, maintaining a deep conviction that environmental, social, and governance (ESG) factors can have a material impact on investment returns and client outcomes. This policy includes the key pillars AILX’s ESG approach including consideration of sustainability risk and how they apply to the funds we operate.
Luxemburg SICAV funds with SFDR ESG characteristics (Article 8)
Aviva Investors will transition specific sub-funds from Article 6 to Article 8 Funds in compliance with the European Commission’s Sustainable Finance Disclosure Regulation (or “SFDR”). This transition will be effective 1 July 2022 and was advised in the Notice to Shareholders on 31 May 2022 for Aviva Investors (SICAV) and 1 June 2022 for Aviva Investors Global (SICAV-SIF).
The investment process will now include binding ESG characteristics (ESG screens and sector exclusions), further integration of ESG considerations and the investment manager’s transition philosophy into investment decisions.
This change aligns with Aviva Investors’ long-standing investment philosophy and commitment to responsible investing. The changes will not affect the sub-funds’ stated investment objectives, the way they are managed or the overall risk profile.
For further information regarding these changes, please see the below documentation which includes the Notice to Shareholders, the SICAV Impact Assessment Matrix and an outline of Aviva Investors’ approach to Article 8.
Website product disclosures
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) EN 32 EN 2019/2088 and Articles 25 to 36 of this Regulation.
We know what it takes to make a difference
It takes working together to drive sustainable transition across People, Climate, and Earth. It takes Aviva Investors.
Responsible investment views
Buy it or build it: Why innovation is key in healthcare
1 Jun 2023
Healthcare is a dynamic industry, but patent expiries from 2025 and drug-price reform in the US pose challenges. Innovation will be key for continued success, as experts from our credit, equity and ESG teams explain.
Can they, should they, will they? Is now the time for illiquid assets in DC?
31 May 2023
What role could private assets play in UK defined-contribution pension schemes, where decision-makers are searching for returns and diversification? Heather Brown from our UK pensions team consults a panel of specialists.
Global megatrends: How climate, nature and social change will reshape economies
30 May 2023
Climate change, natural resource scarcity and social shifts are transforming the corporate landscape. Investors need to understand the implications of these sustainability megatrends to manage risks and seize opportunities.
Gains or glitches? What generative AI means for investors
24 May 2023
The release of ChatGPT has heralded an artificial intelligence boom. We assess the investment and ESG considerations.
Why are we waiting? Time for UK infrastructure to pick up pace
22 May 2023
After a slow start to the year, Darryl Murphy ponders what it will take to get the UK infrastructure market moving again.
Short-term headwinds, structural tailwinds: Making sense of a complex landscape for climate transition real assets
17 May 2023
Volatility presents challenges and opportunities for investors. James Tarry and Luke Layfield discuss what’s next for real asset investors focused on the climate transition.
LGBTQ+ inclusion in the workplace: Creating psychological safety
11 Apr 2023
Each experience is unique, but lesbian, gay, bisexual, transgender, non-binary and other non-heteronormative people (LGBTQ+) still face huge challenges, in and out of the workplace. Companies should do more to support them and foster a culture of inclusion.
Supply and demand: Tackling both sides of the carbon emissions equation
5 Apr 2023
Despite progress through our Climate Engagement Escalation Programme, more action is needed from the world’s 30 systemically important carbon emitters, as Sora Utzinger and Louise Wihlborn explain.
Out with the old: Why real estate investors need to work harder, smarter, better
30 Mar 2023
Faced with a more challenging outlook for returns, real-estate equity investors must get more sophisticated and active, argue Ben Sanderson and David Hedalen.
On target: Why SBTs trump net zero at changing behaviour
28 Mar 2023
Investors must push companies to play their part in tackling the climate crisis by adopting science-based targets, argues Rick Stathers.
Shifting tides: Can we clean up forever chemicals?
27 Mar 2023
Litigation is mounting, regulation is tightening, and 3M will exit the production of PFAS. Will others follow suit, and can we remove PFAS and other forever chemicals from our drinking water?
The investment implications of peak fossil fuels
24 Mar 2023
Energy analyst Kingsmill Bond considers if peak fossil-fuel consumption has been reached and whether investors appreciate the implications.
Integrating ESG in multi-strategy portfolios
23 Mar 2023
Multi-strategy portfolios have come a long way in embedding ESG into the investment process, but there are gaps to fill, as Jennie Byun explains.
Climate adaptation and resilience: Preparing for a warmer, wilder world
22 Mar 2023
Millions of hours have been spent negotiating net-zero targets, but many human-led climate impacts are already locked in. Our credit and equities portfolio managers explain where they see opportunities in solutions providers that will help society adapt for the new reality.
All change: Positioning for a new market regime and climate action in IG credit
17 Mar 2023
Justine Vroman and Tom Chinery discuss the opportunities in investment-grade credit to drive climate action.
Engaging on neurodiversity: What can be learned from other DE&I initiatives
10 Mar 2023
Many diversity, equity and inclusion initiatives have seen improvements in recent years, but neurodiversity has not progressed at the same pace. Abigail Herron explores what can be applied from other successful DE&I campaigns to put neurodiversity firmly in the spotlight.
Responsible investment isn’t just the right thing to do, it makes sound financial sense.
Access key fund documentation and performance reports.