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No consideration of adverse impacts of investment decisions on sustainability factors

Regulatory framework

Article 4 of Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (“SFDR”) stipulates that there must be transparency around the principal adverse impacts of investment decisions on sustainability factors.

This declaration fulfils this objective, taking into account the size of Keytrade Bank, the nature and scale of its activities, and the types of financial instruments and products offered.

Definition of principal adverse impacts on sustainability

Principal adverse impacts (PAIs) are the most significant negative impacts of investment decisions on sustainability factors relating to environmental, social and employee issues, respect for human rights, and the fight against corruption.

The 14 PAIs are as follows:

  • Greenhouse gas (GHG) emissions
  • Carbon footprint
  • GHG intensity of investee companies
  • Exposure to companies active in the fossil fuel sector
  • Share of non-renewable energy consumption and production
  • Energy consumption intensity per high impact climate sector
  • Activities negatively affecting biodiversity-sensitive areas
  • Emissions to water
  • Hazardous waste and radioactive waste ratio
  • Violations of UN Global Compact principles and Organisation for Economic Cooperation and Development (OECD) Guidelines for Multinational Enterprises
  • Lack of processes and compliance mechanisms to monitor compliance with UN Global Compact principles and OECD Guidelines for Multinational Enterprises
  • Unadjusted gender pay gap
  • Board gender diversity
  • Exposure to controversial weapons (antipersonnel mines, cluster munitions, chemical weapons and biological weapons)

Non-consideration of the principal adverse impacts on sustainability

Keytrade Bank does not take into account the principal adverse impacts of investment decisions on sustainability factors in its KEYPRIVATE portfolio management product. However, it closely monitors changes in regulations so that it can take them into account in its portfolio management activities.

Keytrade Bank obtains its clients’ sustainability preferences as part of its KEYPRIVATE portfolio management product via a dedicated questionnaire (suitability test). Clients can select which PAIs they wish to take into consideration. However, Keytrade Bank cannot guarantee that this selection is compatible with its offering. Two trackers available in the KEYPRIVATE portfolio management offering take the 14 PAIs into account. Three PAIs are taken into account in the profiles of clients with unspecified sustainability preferences: greenhouse gas emissions (PAI 1), violations of the UN Global Compact and the OECD Guidelines (PAI 10), and board gender diversity (PAI 13).