Derived fromsustainabilitydefinition, sustainable investing is broadly defined as the practice of usingenvironment, social and governance (ESG)factors when making investment decisions. Sustainable investment is a desire to make responsible investment decisions, to carry out activities without depleting resources and having harmful impacts and to target positive impact on environment and society. Sustainable investments are deemed to be products that promote sustainability or achieve a sustainable objective.
Sustainable investment is about the responsibility and potential the real estate industry holds to invest in a manner which is consistent with achieving medium to long term sustainability targets. These may include contribution towards climate targets, environmental goals or social impact outcomes.
Sustainable and Responsible Investment is a long-term oriented investment approach, which integrates ESG factors in the research, analysis and selection process of securities within an investment portfolio. It combines fundamental analysis and engagement with an evaluation of ESG factors in order to better capture long term returns for investors and to benefit society by influencing the behaviour of companies. (The European forum for responsible investment – Eurosif)
The SFDR defines sustainable investment as "an investment in an economic activity that contributes to an environmental or social objective, provided that the investment does not significantly harm any environmental or social objective and that the investee companies follow good governance practices".Disclosure requirements apply under article 8 to products that promote also environmental or social characteristics, whereas disclosure requirements apply under article 9 to products that have sustainable investment as their objective.
Article 8 SFDR (Published March 15, 2021 in the joint consultation paper: Taxonomy-related sustainability disclosures): “To develop additional disclosure rules on the pre-contractual information for Article 8 products using the environmental taxonomy (so-called “light green” products – i.e. that promote environmental characteristics), divided into technical standards for climate objectives and other environmental objectives”.
Article 9 SFDR (Published March 15, 2021 in the joint consultation paper: Taxonomy-related sustainability disclosures): “To develop additional disclosure rules on the pre-contractual information for Article 9 products (so-called “dark green” products – i.e., that invest in an "economic activity that contributes to an environmental objective") making use of the environmental taxonomy, divided into technical standards for climate objectives and other environmental objectives”.
Source: INREV | Date: 27 October 2021 | ID: D0790 | Version: 1
