GWA Investments Ltd (“GWA” or the “Company”) is a financial adviser in terms of the EU Regulation 2019/2088, the Sustainable Finance Disclosure Regulation (hereinafter referred to as “SFDR”). The Company has complied with the SFDR requirement to provide information on the integration of sustainability risks in its investment advice in two ways. Generally, GWA has developed a SFDR policy which incorporates the following matters: (a) enhancing transparency and disclosure, (b) the Company’s ESG integration, (c) ESG website disclosures, (d) integrating ESG considerations in investment advice, (e) avoiding greenwashing, and (f) monitoring and review.
More specifically, the Company has conducted a review of the MiFID Suitability Guidelines, SFDR and the applicable Maltese Investment Services Rules and has updated its Suitability Policy and Procedures Document (the “Suitability Document”), creating a new Section 5 entitled “Sustainability Preferences and the Sustainability Questionnaire”. GWA also updated other sections of the Suitability Documents. The Company has also created its Sustainability Questionnaire which supplements the Company’s Client Fact-Find document, and which focuses specifically on sustainability preferences. This questionnaire is used as a tool to collect the client’s sustainability preferences and related information.
In addition to the above, the Company’s Conflicts of Interest Policy has been updated to include greenwashing risks and SFDR principles have also been included in the Company’s product governance statement.
The Company does not consider Principal Adverse Impacts (PAIs) of investment decisions on sustainability factors in its investment advisory services – An Explanation.
Pursuant to SFDR, the Company is required to disclose in a proportional manner how sustainability factors are integrated into the investment decisions and the assessment of the likely impacts of sustainability risks. GWA is also required to publish and maintain on its website: (a) information as to whether, taking due account of their size, the nature and scale of its activities and the types of financial products its advises on, its considers in its investment advice the principal adverse impacts on sustainability factors; or (b) information as to why it does not to consider adverse impacts of investment decisions on sustainability factors in its investment advice, and, where relevant, including information as to whether and when they intend to consider such adverse impacts.
Due to its small size, type of business and investment strategy, the adverse impact of the Company’s investment decisions on the sustainability factors is of an extremely limited nature. GWA is sensible to the climate challenges and the sustainable development objectives of the Paris Agreement. The Company is also committed to the promotion of the employees’ well-being and work-life balance. Initiatives have been taken and continue being developed to promote the personal and professional development of employees and the Company’s officials. The Company has also put in place a robust governance structure to ensure high standards of its management and employees’ ethical behaviour.
The Company has a strong commitment to considering sustainability risks as part of this general business strategy and its investment advisory activities. While the Company is strongly committed to the promotion of environmental, social and governance factors, it has decided not to consider the adverse impacts of its investment decisions on sustainability factors in its investment advice.
The above decision is the consequence of a cost-benefit analysis, and motivated by the following factors: (a) Size of the Company. The Company presently has less than 5 employees. (b) Assets under Advisory.
While the Company does not currently consider sustainability adverse impacts, the Company is committed to transparency and provide other relevant sustainability disclosures. These may include information on the Company’s engagement efforts, adherence to industry standards and guidelines, and any positive contributions GWA makes to sustainable practices within its investment portfolios. Additional information can be found in the Company’s SFDR policy.
The Company continuously reviews and assesses its investment processes and regularly evaluates the feasibility of integrating sustainability adverse impacts in its services. GWA remains committed to staying abreast of developments in the market and regulatory landscape and will reassess its approach should the circumstances change. Any future changes or updates to our consideration of sustainability adverse impacts will be promptly communicated via the Company’s website and to clients.
The Company’s integration of sustainability risks in its remuneration policies.
Article 5 of SFDR requires GWA to include in its remuneration policies information on how such policies are consistent with the integration of sustainability risks and shall publish that information on its website.
A sustainability risk is defined as an environmental, social or governance event, which if it occurs, causes a material negative impact on the value of the investments advised by the Company.
The Company does not currently adopt a remuneration policy which integrates sustainability risks. The Company’s remuneration policy provides for a fixed remuneration and may award employees with a variable discretionary bonus on an annual basis. Remuneration levels are justified according to the performance of the individual concerned. Variable remuneration is awarded following a performance assessment based on quantitative as well as qualitative (non-financial) criteria. The variable remuneration is based on key performance assessment criteria. Sustainability risks are not presently considered as part of the variable remuneration assessment. The Company promotes sustainability, as explained above, but does not feel that sustainability risks should be presently considered in the remuneration assessment.
The Company regularly evaluates the feasibility of integrating sustainability risks into its decision-making process, including remuneration decisions. It remains committed to staying abreast of developments in the market and regulatory landscape and will reassess its approach should the circumstances change.