Sustainability-related Disclosures
The information contained on this page relates to the sustainability-related disclosures across various regulations relevant to clients across the J.P. Morgan International Private Bank business, where applicable.
European Union
The information in this section is relevant to all J.P. Morgan SE clients, with the exception of J.P. Morgan SE London branch clients. The documents below provide information on products that promote environmental and/or social characteristics within the meaning of Article 8 of the EU Sustainable Finance Disclosure Regulation (SFDR) or have a sustainable investment objective within the meaning of Article 9 SFDR. This section also contains a summary of how we approach Sustainability Preferences.
European Union (EU) governments and business leaders believe that one of the best ways to achieve their sustainability goals is to encourage capital to flow towards efforts that promote and enable a more sustainable economy. Many investors also support this objective, but often lack enough information to assess and compare sustainable investment options on the basis of how they are aligned to their investment goals.
The EU Action Plan on Sustainable Finance, which features a series of interlinking regulations designed to encourage sustainable investing, represents a major step towards redirecting capital to the sustainable economy. A key part of the plan is the EU Sustainable Finance Disclosure Regulation (EU SFDR), which came into effect on 10 March 2021. Further regulations have followed, including the EU Taxonomy Regulation1, which established specific environmental criteria related to economic activities for investment purposes, and which form part of the enhanced disclosure obligations required by the EU SFDR and became effective from January 2022. An extended environmental taxonomy and a social taxonomy are expected to follow.
In this Q&A, we look specifically at the EU SFDR, seeking to explain the importance of this wide-reaching regulation and to show how it will impact financial market participants, advisers and investors alike.
What is the EU SFDR?
The EU SFDR is a regulation that is designed to make it easier for investors to distinguish and compare between the many sustainable investment strategies that are now available within the European Union. The EU SFDR aims to help investors by providing more transparency on the degree to which financial products consider environmental and/or social characteristics, invest in sustainable investments or have sustainable objectives. This information is now being presented in a more standardised way.
The EU SFDR requires specific firm-level disclosures from financial market participants and investment advisers regarding how they address two key considerations: Sustainability Risks and Principal Adverse Impacts. The EU SFDR also mandates transparency of remuneration policies in relation to the integration of sustainability risks. In addition, the EU SFDR aims to help investors to choose between products by mandating increasing levels of disclosures, depending on the degree to which sustainability is a consideration.
Three different product categorisations result from EU SFDR:
- “Article 6” products either integrate environmental, social and governance (ESG) risk considerations into the investment decision-making process, or explain why sustainability risk is not relevant, but do not meet the additional criteria of Article 8 or Article 9 strategies.
- “Article 8” products promote social and/or environmental characteristics, and may invest in sustainable investments, but do not have sustainable investing as a core objective.
- “Article 9” products have a sustainable investment objective.
The disclosures, which went into effect on 10 March 2021, apply to several financial products, including Undertakings for Collective Investment in Transferable Securities “UCITS”, Alternative Investment Funds "AIFs": and discretionary portfolios.
Why is the EU SFDR important?
The EU SFDR is designed to re-orient capital towards sustainable growth and help clients make better sustainable investing choices.
The primary goals are to provide greater transparency on environmental and social characteristics, and sustainability within the financial markets, and to create common standards for reporting and disclosing information related to these considerations.
Who does the EU SFDR apply to and which types of products and services are affected?
The scope of the EU SFDR is relatively broad, applying to all financial market participants and financial advisers based in the EU, as well as investment managers or advisers based outside of the EU, who market (or intend to market) their products to clients in the EU.
In terms of products, the disclosures regime applies to UCITS, AIFs, discretionary portfolios, as well as to financial advice (provided within the EU or by an EU investment firm).
What are Sustainability Risks and Principal Adverse Impacts, and how do they impact financial market participants and advisers?
To achieve the EU SFDR’s goal of improving sustainable finance by increasing transparency and creating standards, financial market participants and advisers must disclose the manner in which they consider two key factors: Sustainability Risks and Principal Adverse Impacts. Subject to specific thresholds, financial market participants are required to disclose their policies at both the firm and product level, while advisers are required to explain how they consider these factors in their advice.
The EU SFDR outlines specific definitions for Sustainability Risks and Principal Adverse Impacts:
- Sustainability Risks refer to environmental, social or governance events, or conditions, such as climate change, which could cause an actual or a potential material negative impact on the value of an investment.
- Principal Adverse Impacts are negative effects that investment decisions or advice could have on sustainability factors.
Larger firms (having more than 500 employees) are required to publish and maintain a statement of their due diligence policies with respect to Principal Adverse Impacts from 30 June 2021, with reporting of Principal Adverse Impacts expected to commence mid-2023 (representing Principal Adverse Impacts data throughout 2022).
This reporting will require financial market participants to describe the Principal Adverse Impacts associated with their investment decisions and their policies in relation to them in more specific and quantifiable detail, with reference to indicators related to climate and the environment, and indicators related to social and employee issues, respect for human rights, and anti-corruption and anti-bribery matters. Out of the current 64 environmental and social indicators prescribed by the SFDR, which can be grouped into broader categories, such as greenhouse gas emissions, biodiversity or water, 18 are mandatory, and for the other 46, investment managers have some flexibility with regards to providing detail on the impacts.
It is important to note that regulators continue to review the Principal Adverse Impacts and financial product disclosure requirements in the EU SFDR Delegated Regulation.
What are the different levels of disclosures introduced by the EU SFDR?
As defined in question 1, the EU SFDR currently specifies three distinct levels of disclosure for investment products with regards to sustainable investing and ESG considerations.
Article 6 financial products must disclose the manner in which sustainability risks are integrated into their investment decisions as well as an assessment of the likely impacts of sustainability risks on the returns of the financial products.
Article 8 and Article 9 financial products feature details on a variety of sustainability and ESG topics. The table below highlights a sample of the topics and a sample of elements that are required to be disclosed for each, though it is not a complete list.
What is the EU Taxonomy Regulation and how does it affect the EU SFDR?
The EU Taxonomy is a green classification system that translates the EU’s climate and environmental objectives into criteria for specific economic activities for investment purposes; The EU Taxonomy Regulation (EU TR) came into effect on 1 January 2022. Subject to the corresponding EU SFDR regulatory technical standard being passed into EU law, from 1 January 2023 elements of the EU TR will be integrated into the disclosure obligations set out by the EU SFDR. This development will affect financial products that are classified as either Article 8 or Article 9. The specific EU TR elements to be disclosed under the EU SFDR are outlined below:
Article 8 products which promote environmental characteristics will need to disclose whether these investments are in activities aligned with the EU TR.
Article 9 products, which by definition have sustainable investment as an objective, will have to disclose whether their sustainable investments are in activities aligned with the EU TR.
1 The Taxonomy Regulation was published in the Official Journal of the European Union on 22 June 2020 and entered into force on 12 July 2020. The regulation sets out four overarching conditions that an economic activity has to meet in order to qualify as environmentally sustainable.
J.P. Morgan Mirova Global Sustainable Equity SMA
Periodic reporting
Information about the overall sustainability-related impact of this financial product for each reporting period is available via JPMorgan Online or by contacting your J.P. Morgan Advisor.
Website Disclosure
Dated 12 July 2024 (amendment to the version dated 16 December 2022)
The following updates have been made to the disclosure:
- Included additional information on data sources and processing for investee companies (section h).
- Additional details for Limitations to methodologies and data & Attainment of the sustainable investment objective (section I & J)
Please download the updated disclosure document here
Pre-Contractual Disclosure
Dated 17 June 2024 (amendment to the version dated 1 May 2023)
This document has been updated to align with the pre-contractual disclosure template as specified by the regulation.
Please download the updated disclosure document here
Sustainable Fixed Income Strategy
Periodic reporting
Information about the extent to which the environmental and/or social characteristics are met for each reporting period is available via JPMorgan Online or by contacting your J.P. Morgan Advisor.
Website Disclosure
Dated 12 July 2024 (amendment to the version dated 16 December 2022)
The following updates have been made to the disclosure:
- Updated summary with the main points from sections that follow (section a).
- Information on how we assess the good governance practices of the companies in which investments are made (section d).
- Additional details on the processing for monitoring environmental or social characteristics (section f).
- Disclose the vendor we use to for SFDR designations and the proportion of estimated date (section h).
- Process for sourcing data if SFDR designation is unavailable from vendors which in turn mitigate limitations (section i).
- Additional information on our due diligence checks (section j).
Please download the updated disclosure document here
Pre-Contractual Disclosure
Dated 17 June 2024 (amendment to the version dated 1 May 2023)
This document has been updated to align with the pre-contractual disclosure template as specified by the regulation.
Please download the updated disclosure document here
Sustainable Equity Strategy
Periodic reporting
Information about the extent to which the environmental and/or social characteristics are met for each reporting period is available via JPMorgan Online or by contacting your J.P. Morgan Advisor.
Website Disclosure
Dated 12 July 2024 (amendment to the version dated 16 December 2022)
The following updates have been made to the disclosure:
- Updated summary with the main points from sections that follow (section a).
- Information on how we assess the good governance practices of the companies in which investments are made (section d).
- Additional details on the processing for monitoring environmental or social characteristics (section f).
- Disclose the vendor we use to for SFDR designations and the proportion of estimated date (section h).
- Process for sourcing data if SFDR designation is unavailable from vendors which in turn mitigate limitations (section i).
- Additional information on our due diligence checks (section j).
Please download the updated disclosure document here
Pre-Contractual Disclosure
Dated 17 June 2024 (amendment to the version dated 1 May 2023)
This document has been updated to align with the pre-contractual disclosure template as specified by the regulation.
Please download the updated disclosure document here
Balanced ESG
Periodic reporting
Information about the extent to which the environmental and/or social characteristics are met for each reporting period is available via JPMorgan Online or by contacting your J.P. Morgan Advisor.
Website Disclosure
Dated 12 July 2024 (amendment to the version dated 16 December 2022)
The following updates have been made to the disclosure:
- Updated summary with the main points from sections that follow (section a).
- Information on how we assess the good governance practices of the companies in which investments are made (section d).
- Additional details on the processing for monitoring environmental or social characteristics (section f).
- Disclose the vendor we use to for SFDR designations and the proportion of estimated date (section h).
- Process for sourcing data if SFDR designation is unavailable from vendors which in turn mitigate limitations (section i).
- Additional information on our due diligence checks (section j).
Please download the updated disclosure document here
Pre-Contractual Disclosure
Dated 17 June 2024 (amendment to the version dated 1 May 2023)
This document has been updated to align with the pre-contractual disclosure template as specified by the regulation.
Please download the updated disclosure document here
Foundation ESG
Periodic reporting
Information about the extent to which the environmental and/or social characteristics are met for each reporting period is available via JPMorgan Online or by contacting your J.P. Morgan Advisor.
Website Disclosure
Dated 12 July 2024 (amendment to the version dated 16 December 2022)
The following updates have been made to the disclosure:
- Updated summary with the main points from sections that follow (section a).
- Information on how we assess the good governance practices of the companies in which investments are made (section d).
- Additional details on the processing for monitoring environmental or social characteristics (section f).
- Disclose the vendor we use to for SFDR designations and the proportion of estimated date (section h).
- Process for sourcing data if SFDR designation is unavailable from vendors which in turn mitigate limitations (section i).
- Additional information on our due diligence checks (section j).
Please download the updated disclosure document here
Pre-Contractual Disclosure
Dated 17 June 2024 (amendment to the version dated 1 May 2023)
This document has been updated to align with the pre-contractual disclosure template as specified by the regulation.
Please download the updated disclosure document here
Change log
This change log provides a summary of updates and changes made to the SFDR Article 8 and 9 product disclosures on this webpage.
United Kingdom
The documents below provide information relevant to clients of the J.P. Morgan SE London branch.
