NORDIC FRIENDS LOUNGE 21
“The changes to MiFID II will drastically change the way distributors and advisers interact with their clients,” says Christophe Girondel, Global Head of Institutional and Wholesale Distribution at NAM. ”Advisers need to prepare for this. But the time is short. Therefore, we want to help. With more than 30 years of experience in ESG and sustainability at the core of our Nordic DNA and business model, we are well posi- tioned to assist our distribution partners.”
knowledge about ESG, the new taxonomy, regu- lations (SFDR, MiFID II) and the effects on their business. The training courses (approx. 45 minutes each) are free of charge and carried out by Nor- dea’s experts. They cover the following topics: Module 1: “Your kickstart to ESG” An introduction to the central aspects of ESG, the driving forces behind its rapidly growing impor- tance and the reasons why sustainable investing offers financial advisers numerous opportunities to generate new business. Module 2: “ESG and regulation: SFDR – how does it impact you?” Learn about why the EU sees transparency as a central tool to fight greenwashing and how the SFDR fund classifications and reporting require- ments can help advisers to compare financial products and find sustainable investments. Module 3: “Changes to MiFID II – what do they mean for you?” A detailed analysis of why the SFDR product requirements do not match the requirements for sustainable products under the amended MiFID II regulation and a guide on how to identify a MiFID-eligible ESG solution.
CONTEXT
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HERE TO STAY
Regulation: sustainability is not optional (anymore)
The Sustainable Finance Disclosure Regulation - the SFDR - requires asset managers to reveal how they integrate ESG factors into their portfolio management processes and how their products consider key potential negative impacts on sustainability. Additional disclosures apply to products expressly marketed as ESG focused in order to avoid greenwashing.
The clock is ticking...
From August 2022 the way you and your advisory team speaks to your clients will drastically change. High time to get prepared.
The taxonomy regulation aims to establish a com- mon EU-wide classification system or taxonomy for environmentally sustainable economic activities, or put bluntly: what is green and what is not. But one of the most important legislative measures that will impact the distribution of investment products is that MiFID II 1 is also being updated to align with the ESG regulation. A key fundamental aspect is the requirement to integrate sustainability preferences into the suitability assessment when providing investment advice or discretionary portfolio management. Sustainability preferences need to be assessed alongside the usual aspects of financial risk suitability. From 2 nd August 2022 it will become mandatory for distributors and advisors to assess to what extent a client should be steered towards an ESG-focused product or not. As a consequence, they should be able to explain and offer their customers various options if they want to invest in an ESG product. This will require training and knowledge about sustainability and sustainable products. We hope that this booklet will help you understand how to support your team in overcoming any ESG hurdles along the way and how to get them in shape for the long run.
New requirements:
The ESG playbook ESG is not a simple topic. Often, it can be complex and as it is a rela- tively new development in the industry , it is constantly evolving. There are many nuances, varied approaches and jargon that can make things hard to understand – for financial advisors as well as clients. To be successful, every team must first have the right motivation, equip- ment and fundamental command of the ESG topic. In order to get your sales team fit for the ESG marathon, you should consider a few points that we have summarised on the following pages.
The SFDR requires asset managers to classify investment products as Article 6 (not marketed as ESG products), Article 8 (products with ESG characteristics) and Article 9 (sustainable products). Different reporting requirements apply to each category.
While we have seen a definite shift from investors in their attitudes towards sustainable investing, they aren’t the only ones. The area has taken on greater focus for policy makers, leading to a concerted regulatory push towards sustainability. New EU regulation on sustainability is making responsible investing a mandatory consideration for industry players. So, what does this mean for fund distributors and financial advisors? Following the 2018 EU’s Action Plan on Sustainable Finance, an EU legislative package was released including key regulations regarding corporate disclosure, taxonomy and – most important for distributors and advisors – how to incorporate sustainability into investment advice.
Let’s call it the ESG playbook.
1 MiFID (Markets in Financial Instruments Directive) II is a legislative framework instituted by the European Union (EU) to regulate financial markets and improve protections for investors. Its aim is to standardise practices across the EU and restore confidence in the industry.
NORDEAM
ESG playbook
Nordea Asset Management
All the building blocks you need
Not only does NAM support advisers in getting ready to advise their clients on ESG matters, NAM also ensures that it provides them with all the building blocks they need to construct their sustainable offerings: from NAM’s solid ESG framework and decades of experience in sustainable investing to its wide range of ESG strategies including the ESG STARS funds, which cover various asset classes and geographical regions. In addition, NAM has ensured that all its current Article 8 and 9 products, as well as any other ESG and sustain- ability-aligned launch, will qualify as suitable for clients with sustainable preferences once the new MiFID eligibility requirements are in place. This makes the choice much easier for advisers and distributors.
For more information: nordea.lu/ESGBuildingBlocks
If you are interested, please contact your responsi- ble sales representative.
Let’s come together!
Nordea’s ESG playbook Last but not least, Nordea provides advisory teams with an ESG handbook to help them get their sales teams ready for the challenges posed by the amendments to MiFID II. Since time is passing and August is fast approaching, it is important for heads of advisory to get their teams fit now. To this end, Nordea has updated its “ESG playbook”. The booklet was designed as a compact, easy-to- read and hands-on guide to matters around ESG. In light of the upcoming regulatory changes, NAM has now updated the handbook and supplement- ed additional tips and tricks on how advisory teams can overcome major ESG hurdles such as: How can advisers communicate the complex topic to their clients in an easy-to-understand way? How to evaluate potential responsible investment solutions and make appropriate recommendations? It’s not long now until 2 August, when the starting signal is given for the actual ESG marathon. The sooner teams start to prepare for what lies ahead, the greater the chance of success.
Nordea Asset Management (NAM) is pleased to be able to invite clients, partners, friends and colleagues once again to the traditional Midsummer festivities. Midsummer is a major event in the Nordic social calendar. On this day, families and friends in Sweden come together to celebrate the end of the long, dark winter months and to wel- come the summer by enjoying good food and drink, dancing and singing. “This year’s Midsummer celebrations are the perfect occasion to reconnect after two years apart. We are very much looking forward to meeting our partners and clients in person again,” says François Passant, Global Head of Marketing and Business Management.
Once again, NAM invites partners, clients and friends to join the Midsummer festivities.
Accordingly, the motto of this year’s festivities is: “Let’s come together!” It is the ninth time that Nordea has in- vited clients and partners from across Europe to join the festivities and enjoy the unique Midsummer atmosphere. Watch your inbox for your invitation!
ISSUE 01.2022
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