Sustainable Finance Disclosure Regulation (SFDR)

What is SFDR?

Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 requires sustainability-related disclosures in the financial services sector (known as Sustainable Finance Disclosure Regulation - SFDR).

The purpose of the regulation is to establish harmonized rules for financial market participants and financial advisers on transparency with regard to the integration of sustainability risks and the consideration of adverse sustainability impacts in investment decision-making processes and the provision of sustainability-related information with respect to financial products.

What is sustainability risk?

Sustainability risk (or ESG risk) means an environmental or social or governance event or condition that, if it occurs, could cause an actual or potential material negative impact on the value of the investment.

Sustainability risks are taken into consideration during the investment decision-making processes of Piraeus Bank or the investment manager in the event of an assignment, as well as in the provision of investment advice and are incorporated into the relevant ESG investment policy.

Sustainability risks may be considered as separate risks or as drivers that have an impact on other portfolio risks. The purpose of integrating sustainability risks into investment decision-making processes is to identify the occurrences of such risks in a timely manner and to take appropriate measures to mitigate the impact on investments or the portfolio as a whole.

Key risk indicators can be used to assess sustainability risks. Key risk indicators can be of quantitative and / or qualitative nature, based on sustainability factors (ESG) and measure the adverse impacts on the monitored data.

What are ESG factors?

ESG factors are events that may cause negative impact on portfolio returns and are defined as environmental (E-Environmental), social (S-Social) and governance (G-Governance) issues.

Environmental matters concern the company's interaction with the natural environment, including, but not limited to, climate impact mitigation, reducing gas emissions and preventing environmental risks.

Social matters include, inter alia, the protection of the health and safety of staff, employees' rights, monitoring of the supply chain and respect for the interests of communities and social minorities.

Good governance matters include, for example, anti-corruption measures, sound governance structures by boards and management, data protection.

ESG Investment Policy

Piraeus Bank, or the investment manager in case of assignment, develops an ESG investment policy to identify, manage and address sustainability risks and to recognize and gradually to integrate ESG and sustainability risk factors in the decision-making process, portfolio management, investment advice and product development (ESG), as well as to comply to national and European regulatory developments.

ESG investment policy aims, inter alia, to inform the investment community to reduce information asymmetries in integrating sustainability risks, taking into account adverse sustainability impacts and promoting environmental or social features, and sustainable investments.

Whenever feasible and material, Piraeus Bank or the investment manager in the case of an assignment, may consider the impact of sustainability factors and sustainability risks on the investments. Financial products offered by Piraeus Bank may have specific ESG features and/or objectives and the relevant ESG investment policy developed by Piraeus Bank or the investment manager in case of an assignment is available on their official website.

As sustainability factors and risks are gradually integrated into products, Piraeus Bank or the investment manager in case of an assignment will assess how sustainability risk management can be integrated into financial products and will update the pre-contractual disclosure accordingly to include information and details necessary for investors.

Integration of Sustainability Risks

Piraeus Bank (LEI 213800OYHR1MPQ5VJL60) or the investment manager in case of assignment, in the process of making investment decisions and providing investment advice, in addition to the common financial data, whenever feasible and material, will consider and take into account the impact of sustainability factors and sustainability risks on investments where sufficient data are available regarding these factors for all issuers of financial instruments included in the collective (UCITS) and private portfolios it manages, as well as those it proposes to its clients when providing investment advice.

Evaluation results

For investment management and investment advice portfolios, Piraeus Bank or the investment manager in case of assignment will assess the following potential adverse impacts of sustainability risks on the returns of the financial products it holds or advises on:

Climatic and other environmental factors (indicative): 

• Greenhouse gas emissions
• Biodiversity
• Water
• Waste

Social factors, labour relations, human rights:

• Social and Labour Factors

Corporate governance factors (indicative):

• Transparency
• Codes of conduct
• Ethics

When Piraeus Bank or the investment manager in case of assignment consider sustainability risks to be relevant to the investments, they will make available the results of the assessment of the potential impact of sustainability risks on the returns of the investment management portfolios or on the investment advices they provide.

Entity Disclosure - Article 3 of Regulation (EU) 2019/2088

Piraeus Group has set as a strategic objective the sustainable growth, banking and investments, closely monitors the continuous developments in the changing legislative and regulatory framework and adapts its investment products and services, as well as the process of making relevant investment decisions and providing investment advice, in order to meet not only the requirements of the applicable legislation and regulatory authorities, but also the increased interest of investors in products and services with sustainable investment characteristics and objectives.

Additionally, Piraeus Group has been developing sustainability policies since 2004. In 2020, it drafted the Sustainable Development Policy, which reflects the Group's holistic approach to sustainability and aims to set the strategic guidelines for its support, promotion and financing. The policy reinforces the Group's intentions to contribute to the achievement of the United Nations' global sustainable development goals and the Paris Climate Agreement and aligns its operations with the UNEP-FI Principles for Responsible Banking.

Piraeus Group operates in line with its ESG strategy and climate change strategy, which aims to reduce its carbon footprint, support investments in RES and energy saving projects, assess the risk of climate change for Greek businesses, and develop solutions for better adaptation of businesses to the new climate environment.

The active participation of Piraeus Group in international initiatives for corporate sustainability and the promotion of sustainable development and banking is long-standing. The Group is a member of the UN Global Compact and the UN Environment Programme Finance Initiative (UNEP FI), where it also serves on its Banking Board. It is a signatory to the Principles of Responsible Banking and participates in UNEP FI's Collective Commitment to Climate Action (CCCA), committing to align its portfolio with financing sustainable development in order to limit the average temperature increase to 1.5o Celsius. Following its participation in the CCCA, Piraeus joined the Science Based Targets initiative to set science-based targets to reduce its environmental footprint. Piraeus also participates in UNEP FI working groups such as Impact Assessment, EU Taxonomy (jointly with EBF) that aim to develop measurement tools and ESG evaluation criteria. In order to support business actions that protect the natural environment, Piraeus Group has signed the international "Finance for Biodiversity Pledge" and actively participates in the EU Business@Biodiversity Platform. Finally, Piraeus Asset Management is a member of the Principles for Responsible Investment (PRI) for their adoption and implementation.

Aiming to reduce the environmental footprint of its operations, Piraeus Bank has developed strategies and implements an Environmental Management System (EMS). Since 2011, it has been registered in the European Eco-Management and Audit Scheme (EMAS) and the EMS is certified according to the international standard ISO 14001:2015. This includes direct (Scope 1), indirect (Scope 2) and other indirect greenhouse gas emissions from its activities (Scope 3). Piraeus Group aims to be climate neutral by 2030 in its internal operations and by 2050 in emissions from its financing activities.

Piraeus Bank has recognized that its business financing may involve environmental and social risks beyond the financial ones, and therefore, since 2017, it has been implementing an Environmental & Social Risk Management System (ESMS). It applies environmental and social criteria in the evaluation process of all new business financing in order to limit and manage these risks.

In 2021, it develops a roadmap for the full integration of climate and ESG risks in both risk management and decision making in order to fully meet the regulatory guidance of the European Central Bank.

As part of its climate strategy, Piraeus Bank calculates annually the climate exposure of its business customers based on their turnover, who operate in selected sectors that may be economically affected by climate change. For the calculation, it has developed a unique software tool, the Climate Risk Management Application, which is being upgraded to align with emerging updates to climate risk management, such as the TCFD recommendations and UNEP FI climate scenarios proposals.

For its overall approach to sustainability and sustainable banking, Piraeus Bank is continuously evaluated by the most recognized global ESG benchmarks (MSCI, ISS, CDP, Vigeo-Eiris, CRI), which include in their lists the companies with the highest performance in the field of corporate sustainability worldwide, based on economic, environmental and social criteria.

Statement regarding the adverse impacts of investment decisions on sustainability factors

Principal Adverse Impact Statement / Piraeus Group

Principal Adverse Impact Statement of Investment and Insurance Advice on Sustainability factors / Piraeus Group 28.06.2024

Statement on principal adverse impacts on investment decisions on sustainability factors / Piraeus Group 30.06.2024

Remuneration Policy - Article 5 of Regulation (EU) 2019/2088

In accordance with Article 5 of Regulation (EU) 2019/2088, Piraeus Bank intends to include in its remuneration policy information on the integration of sustainability risks (ESG). The bank is currently reviewing individual and collective targets in order to incorporate elements related to the integration of sustainability risks and to update its remuneration policy in due course.