The Sustainable Finance Disclosure Regulation (”SFDR” or “the Regulation”) applied from 10 March 2021. This Principal Adverse Sustainability Impacts Statement specifically addresses the obligation in Articles 4(1)(b) and 4(5)(b) of the Regulation which requires financial market participants and financial advisers respectively to publish and maintain on their websites:
“[in the case of financial market participants]
(a) where they consider principal adverse impacts of investment decisions on sustainability factors, a statement on due diligence policies with respect to those impacts, taking due account of their size, the nature and scale of their activities and the types of financial products they make available; or
(b) where they do not consider adverse impacts of investment decisions on sustainability factors, clear reasons for why they do not, including, where relevant, information as to whether and when they intend to consider such adverse impacts…[and, in the case of financial advisers]…information as to why they do not to consider adverse impacts of investment decisions on sustainability factors in their investment advice or insurance advice, and, where relevant, including information as to whether and when they intend to consider such adverse impacts.”
Entrepreneur First applies analysis and exclusionary criteria to identify and limit potential principal adverse sustainability impacts caused by its operations or its portfolio, however, the process for identifying such impacts is being reviewed and improved during 2021, to incorporate recommendations from existing standards such as the UNPRI, with the purpose of improving the process further. Given the obligations contained in the Regulations (including the technical methodologies and data capture requirements this would reasonably entail) compliance is not assured among the different portfolio companies that Entrepreneur first will invest in. As such, there is no assurance that Entrepreneur First will have access to clear, comparable and consistent data with which to report on principal adverse impacts of investment decisions on Sustainability Factors. This decision will, however, be kept under regular review.