Explanation of Sustainability Preferences
Explanation of Sustainability Preferences
Please note that the definitions provided below are for informational use only and do not constitute promotional material.
The Suitability assessment is a Directive 2014/65/EU (“MiFID II“) requirement applicable to EU investment firms providing portfolio management services.
At Revolut Securities Europe UAB (“we”, “us”, “our”), we employ a Suitability Questionnaire to assess our clients’ investment knowledge and experience, risk tolerance, financial situation, investment objectives and sustainability preferences. This allows us to provide our clients with suitable investment strategies as part of our Robo-Advisor discretionary portfolio management service.
In line with requirements set out in the Commission Delegated Regulation (EU) 2017/565 (“MIFID II Delegated Regulation”), after identifying a range of suitable products for the client, in accordance with the criteria of investment knowledge and experience, financial situation and other investment objectives, we must also identify the product(s) that fulfill the client’s sustainability preferences. We ask our clients about whether they have any sustainability preferences as part of our Suitability Questionnaire. To learn more about the different sustainability preferences that our clients can specify in-app, please see this FAQ.
According to MIFID II Delegated Regulation, client sustainability preferences can be expressed in relation to the different types of sustainable investment products (Environmentally sustainable investments, Sustainable investments, and/or Financial instruments considering Principle Adverse Impacts (“PAIs”)). Clients shall be able to express to what extent (minimum proportion) they wish to invest in each category of sustainable investment products and/or whether they would like to prioritise certain sustainability areas.
Environmentally sustainable investments (aligned with EU taxonomy for sustainable activities)
Environmentally sustainable investments entail investments in environmentally sustainable activities defined by the Regulation (EU) 2020/852 (the “Taxonomy Regulation”). This means that the activity in question should significantly contribute to at least one of the six identified environmental objectives (climate change mitigation, climate change adaptation, transition to a circular economy, sustainable use and protection of water and marine resources, pollution prevention and control, and the protection and restoration of biodiversity and ecosystems). To be considered environmentally sustainable, the activity must also adhere to applicable technical screening criteria and minimum environmental, social, and governance (“ESG”) safeguards and avoid causing significant harm to any environmental objectives. Please see this FAQ for information on how to indicate the desired minimum allocation for environmentally sustainable investments in your portfolio.
Sustainable investments (as defined in Regulation (EU) 2019/2088, the “SFDR”)
Sustainable investment is an investment in an economic activity that contributes to environmental objectives (e.g. energy efficiency, use of renewable energy, raw materials, water and land, the impact on biodiversity, etc.) or social objectives (e.g. tackling inequality, fostering social cohesion, labor relations, etc.), does not significantly harm social or environmental objectives, and includes good governance at investee companies. Please see this FAQ for information on how to indicate the desired minimum allocation for sustainable investments in your portfolio.
Consideration of PAIs
Where financial instruments consider PAIs on sustainability factors, they consider the effect of related investments on sustainability factors. PAI indicators serve as a means to measure the negative effects of economic activity on various sustainability factors, including environmental, social, and governance issues. Please see this FAQ for information on how to indicate your PAI preferences.
The currently available Robo-Advisor model portfolios do not hold sustainable investment as their objective. However, a portion of the underlying funds of our ESG portfolio offering promotes social and/or environmental characteristics (Article 8 funds, as per the SFDR). We seek to further expand our offering suitable to our clients’ sustainability preferences in the near future. You may find our SFDR-mandated sustainability-related disclosures on our website here.
To learn more about the different types of portfolios in the Revolut Robo-Advisor offering in the EEA, please see this FAQ.