SFDR
Sustainable finance disclosure at Arion Bank and the taxonomy for sustainable investment.
Act No. 25/2023 on Sustainable Finance Disclosure transposed two EU regulations into Icelandic law. Firstly, the Sustainable Finance Disclosure Regulation (SFDR); and secondly the regulation on the establishment of a framework to facilitate sustainable investment (Taxonomy Regulation).
The SFDR covers harmonized regulations for financial market participants and financial advisers concerning sustainability‐related disclosures in the financial services sector. The regulation requires that financial market participants and financial advisers publish information on how sustainability risk is incorporated into investment decisions and financial advice, and whether, and in such case how, the negative material impact on sustainability is taken into account. SFDR defines sustainability risk as an environmental, social or governance event or condition that, if it occurs, could cause a negative material impact on the value of the investment.
Arion Bank is considered to be a financial market participant and financial adviser as defined in SFDR and the Bank is currently implementing the legislation.