Banco Finantia Spain

Thinking about the future, is acting now

Banco Finantia S.A. Sucursal in Spain exercises its daily activity on the base of sustainable responsibility, inclusion, respect, innovation, the concern for environment and mutual help. It recognises that environmental concerns, social and of governance (ESG) raise important challenges for prosperity for the long term of the global economy, the wellbeing of people and of society, and the capability of regeneration of the natural setting, impacting on the long term performance of the companies. 

The work carried out by the Intergovernmental Group of Experts of Climate Change has been the base of the international agreements, like the Agreement of Paris, to combat the effects of climate change and the support to the transition to a more sustainable society. 



For this reason, Banco Finantia S.A is engaged with supporting their clients and the economy in its transition onto a sustainable economy, providing products and/or financial services for enterprise activities environmentally and socially responsible, combining long term profitability with social justice and the protection of the environment, according to its sustainability commitments.  

Sustainability consists of Constructing, on Thinking about the future

Sustainability issues can have a favourable effect to the contribution to financial results in the long run of a company and can contribute towards a greater economic progress, socially and environmentally sustainable. Therefore, including this consideration in the investment search processes, portfolio construction and revision and mission of portfolio managers it can help improve the long term risk-adjusted results by taking investment decisions that take into account relevant ESG information from a financial perspective. It is also worth mentioning health, social and human right issues of employees, as well as the impact on local communities. 

What is a sustainable investment? 

According to the Sustainable Finance Disclosure Regulations (SFDR), it is an investment in an economic activity that contributes towards and environmental objective, more specifically an investment that cooperates towards fighting inequalities and that promotes social cohesion, social integration, and labour relations, or an investment in human capital or in economically and socially disadvantaged communities, provided that such investments do not significantly undermine any of these objectives and provided that the companies benefited from the investment apply good governance practices.
The increasing demand for “green” financial products from investors, linked to the lack of clarity of whether a product can be considered financially sustainable (including the relevant methodical differences in the calcifications of the specialised calcification agencies on the criteria of the ISR36) has resulted in the greenwashing effect. In this sense, stock market regulators from different geographies have adopted different measures to provide greater transparency and homogeneity to the application of criteria.  

What is the SFDR Regulation? 

The SFRD was developed by the European Commission with the objective to standardised the definitions and the concepts so that all the companies disclose their business and political strategy decisions, focusing on sustainable investments and this way moving forward with sustainable investment in Europe, with more transparency and data about the risks and sustainable opportunities. In this way, the Regulation SFDR goes a step further and requires all entities to integrate not only financial risks, but also non-financial risks, in particular, the relevant sustainability risks that may have an important adverse effect on the financial yield of the investment.

Sustainability and Climate Risks

We understand that sustainability risks and climate risks are investment risks, and that integrating the considerations of sustainability in our consulting process and active investment, as well as in the index strategies we suggest, can help investors create more resilient portfolios and to obtain better results. Hence the importance of this regulation. 

Risk Capital. All financial investments entail an element of risk. Therefore, the value of the investment and the resulting performance will vary, not being able to guarantee the amount of the initial investment. In other words, all investment has associated a performance expectation depending on the level of risk: the greater the greater the expected return, the higher the level of risk will be. The past return is not a liable indicator of the present or future results, and it should not be the only factor when selecting a product or a strategy. The variability of the exchange rates in between different currencies can make the value of the investments to decrease or increase. This fluctuation can be specially pronounced for a more volatile fund y the value of the investment can drop suddenly and vastly. The tax levels and tax base can change from time to time.  

Climate risk: is the possible negative impact that a climate event can cause on a good, society or ecosystem. It is not necessarily physical or caused only by climate change, but it can be associated to other aspects like the transitional. The transitional risks are those that appear on the way towards a more sustainable economy, and they can be: normative, legal, technological, from the market or reputational. 

Transition risk: those that occur on the way to a sustainable economy, that can be normative, legal, technological, of the market, or reputational. 

Legal risk: corresponds to the judicial processes that organizations may face due to inadequate management of climate impacts in the communities where they operate.

Technological risk: the need to incorporate new technologies to the processes of production also contributes to climate risks, given that its potential can affect competitiveness and costs of production.  

Reputational risk: the need to adequately integrate ESG aspects into the Entity's strategy, specifically in the management of client and investment portfolios. 

Operational risk: losses in the case of incorrect advice from an Entity, or failure to assess sustainability risks that could affect them.

Your Private Banker will be pleased to stablish a more detailed meeting about the sustainable investment opportunity. For more information, please see the Policy on Integrating Sustainability Risks here.

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