Welcome to Impact Insights, the podcast series of Australia Investment Managers.

If you are interested in sustainability-linked investment solutions within the European Union,

you might have heard about the new regulations called SFDR.

Our guest in today's podcast episode is Natasha Gerda, head of

research at Astoria Investment Managers. Natasha, what does SFDR mean in sustainability?

The sustainable financial disclosure regulation known asDR, is a regulation that was introduced by the European Union in order to promote sustainability and address climate-related risks within the financial sector.

So this regulation, SFDR, plays a crucial role also in preventing greenwashing.

So the requirements from the regulator for financial market participants, such as investment firms, insurance companies, pension funds,

is to disclose information about the environmental, social,

and governance factors associated with their investment products and services.

So, SFDR establishes different frameworks.

So first, there is a financial product classification.

So a fund is either promoting environment and social characteristics.

So these are known as Article 8 funds.

Or are they having a sustainable investment objective,

which are then classified under Article 9.

If the funds do not have or do not make any sustainability claims, then they classified

under Article 6.

So secondly, the SFDR mandates the disclosure of ESG related information for all investors on the website or in

pre-contractual documentation such as the investment prospectus marketing material. And

the goal is really to enable investors to make more informed decisions based on sustainability consideration.

So for this, the following indicators must be presented in these documents.

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