In accordance with regulation (EU) 2019/2088 on sustainability‐related disclosures in the financial services sector, FAF makes the following statement relating to principal adverse sustainability impact (“PAI”).
As an impact investor, FAF seeks to invest in companies that are not only financially sustainable, but also contribute to solving socio-economic problems, while avoiding harm to its end-clients, local communities, and the environment in which it invests. When making an investment, FAF supports its investee companies to contribute to the overall value creation for the company as a whole — its shareholders, its employees, its end-clients, and the society and environment in general. FAF considers PAI of investments on sustainability factors as part of the 4-step risk management approach of its advisor Incofin IM:
1. identify sustainability risks relating to the investments;
2. assess the materiality of the identified sustainability risks;
3. control the identified sustainability risks by avoiding or limiting them; and
4. monitor and reporting on the sustainability risk throughout the lifetime of the investments.
The sustainability risks are defined as environmental, social and governance factors that can or may potentially have a significant negative impact on the assets, financial performance, earnings or reputation of FAF. These ESG factors are considered against international standards.