Responsible Investment and ESG Policy Template

Beliefs, governance, ESG integration, exclusions, sustainability risk, PAI, SFDR classification and fund names, climate targets, engagement, controls

वित्त, निवेश और लेखांकनपूर्णSFDR (EU) 2019/2088 Art. 3-9 and (EU) 2022/1288; Taxonomy (EU) 2020/852; ESMA fund names guidelines; SRD II Art. 3g; SEC Rule 206(4)-6responsible investment policy mathअपडेट किया गया 24 अक्टू॰ 2026

एडिटर में खोलें.md डाउनलोड करें

उपयोग कैसे करें: Use it when an asset manager or asset owner needs a firm-wide ESG policy, including the public SFDR Article 3 policy. Fill the beliefs and the approaches-by-product table first, then make every later section implement them. The main pitfall is a policy that promises more than the investment process does, which is how greenwashing findings start.

प्रीव्यू

Responsible Investment Policy: [Firm or fund name]

The firm-wide policy for how an asset manager or asset owner takes environmental, social and governance (ESG) factors into account: investment beliefs, governance, the approaches used (integration, exclusions, stewardship, sustainable and impact strategies), sustainability risk assessment, principal adverse impacts, product classification and naming, climate commitments, engagement and voting, data and anti-greenwashing controls, client sustainability preferences, remuneration, monitoring and review. Based on Regulation (EU) 2019/2088 (SFDR) Articles 3 to 9 and Commission Delegated Regulation (EU) 2022/1288, Regulation (EU) 2020/852 (Taxonomy), Directive (EU) 2017/828 (SRD II) Article 3g, the ESMA guidelines on funds' names using ESG or sustainability-related terms, US SEC Rule 206(4)-6 and 29 CFR 2550.404a-1, with the UK Stewardship Code 2026 and the Principles for Responsible Investment cited by name, as in force in October 2026. Replace every [bracketed] value and every row marked Example. This is a document format, not financial, investment, tax, legal or accounting advice. Obtain the standard or law for the normative text.

Document control

Field	Value
Document ID	[RIP-001]
Entities covered	[Kestrel Bay Capital (US RIA); Kestrel Bay Capital Europe (EU MiFID investment firm); Kestrel Bay Fund Management (EU UCITS management company and AIFM)]
Products covered	[All discretionary mandates and funds; advisory services where stated]
Asset classes	[Listed equity, fixed income, private equity, real assets, multi-asset]
Version	[1.0]
Status	[Draft / Approved / Superseded]
Owner	[@head-of-responsible-investment]
Approvers/reviewers	[@chief-investment-officer], [@chief-compliance-officer], [@legal-counsel], [@board-or-management-committee]
Approved by	[Board or committee] on YYYY-MM-DD
Public version published at	[URL]
Last updated	YYYY-MM-DD
Next review	YYYY-MM-DD (at least annual)
Classification	[Public / Internal]

Approvals

Role	Name	Decision	Date
Board or management committee	[Name]	[Approved]	YYYY-MM-DD
Chief investment officer	[Name]	[Reviewed]	YYYY-MM-DD
Chief compliance officer	[Name]	[Reviewed]	YYYY-MM-DD
Responsible investment committee chair	[Name]	[Recommended]	YYYY-MM-DD

Revision history

Version	Date	Author	Change
0.1	YYYY-MM-DD	[@author]	First draft
1.0	YYYY-MM-DD	[@author]	Approved; public summary published

1. Purpose and scope
2. Regulatory and framework basis
3. Investment beliefs
4. Governance and responsibilities
5. Responsible investment approaches by product
6. ESG integration process
7. Exclusions and restrictions
8. Sustainability risk assessment
9. Principal adverse impacts
10. Product classification and naming
11. Climate commitments and metrics
12. Stewardship: engagement, escalation and voting
13. Data, ratings and anti-greenwashing controls
14. Client sustainability preferences
15. Remuneration
16. Monitoring, reporting and review
17. Glossary and references
Standard and licence note

1. Purpose and scope

This policy describes how [Firm name] (the "Firm") identifies, assesses and acts on environmental, social and governance factors in its investment decisions, stewardship and client reporting. It aims to:

Improve risk-adjusted returns for clients by treating financially material sustainability factors as part of investment analysis.
Meet the sustainability objectives or characteristics that specific products promise, and only those.
Satisfy the disclosure and conduct rules that apply to each entity.
Give clients, regulators and staff a clear and testable description of what the Firm does and does not do.

Scope element	Applies?	Notes (Example)
Discretionary separate accounts	Yes	Client guidelines prevail where stricter or where the client restricts ESG use
Pooled funds managed by the Firm	Yes	Product-level commitments in each fund's prospectus or pre-contractual annex
Advisory (non-discretionary) services	Partly	Section 14 for preferences; no exclusions applied unless agreed
External sub-advisers	Yes	Assessed at selection and annually (section 13)
Firm's own balance sheet	[No]	Covered by treasury policy

Client instructions. Where a client's mandate sets different rules, the mandate governs for that account. For US retirement plans subject to ERISA, the Firm considers ESG factors only where they are relevant to a risk and return analysis, consistent with 29 CFR 2550.404a-1 and any replacement rule (section 2).

2. Regulatory and framework basis

Status as of 2026-10. Check local law and the consolidated texts.

ID	Jurisdiction	Source	Relevance
REG-001	EU	Regulation (EU) 2019/2088 (SFDR) Article 3	Publish policy on integrating sustainability risks in investment decisions (or advice)
REG-002	EU	SFDR Article 4 and Delegated Regulation (EU) 2022/1288 Annex I	Entity statement on principal adverse impacts (PAI) or reasons for not considering them; mandatory for firms or groups above an average of 500 employees; reference period calendar year, published by 30 June
REG-003	EU	SFDR Article 5	Remuneration policy consistent with integration of sustainability risks
REG-004	EU	SFDR Articles 6, 8 and 9 and Delegated Regulation (EU) 2022/1288 Annexes II to V	Product pre-contractual and periodic disclosures by product type
REG-005	EU	Regulation (EU) 2020/852 (Taxonomy)	Taxonomy alignment disclosure for products with environmental characteristics or objectives
REG-006	EU	ESMA Guidelines on funds' names using ESG or sustainability-related terms (ESMA34-1592494965-657)	80% threshold of investments meeting the characteristics or objectives, plus exclusions based on the EU climate benchmark rules depending on the term used; existing funds had to comply by 2025-05-21. ESMA does not endorse this template
REG-007	EU	Directive (EU) 2017/828 (SRD II) Article 3g, as transposed	Engagement policy and annual disclosure of its implementation, voting behaviour and significant votes (comply or explain)
REG-008	EU	MiFID II sustainability preferences (Delegated Regulation (EU) 2017/565 as amended by (EU) 2021/1253) and ESMA35-43-3172	Collect and respect client sustainability preferences in suitability (section 14)
REG-009	EU (proposal)	Commission proposal to revise SFDR ("SFDR 2.0"), COM(2025) 841, November 2025	Would replace Article 8 and 9 labels with product categories. It is a proposal and not law as of 2026-10: the European Parliament and the Council have adopted their negotiating positions and trilogue negotiations are under way; check the current status
REG-010	US	Investment Advisers Act Rule 206(4)-6 (17 CFR 275.206(4)-6)	Written proxy voting policies, disclosure and records for advisers with voting authority
REG-011	US	29 CFR 2550.404a-1 (ERISA investment duties)	Risk and return focus for plan assets; proxy voting duties; replacement rulemaking announced 2025 and pending: check current text
REG-012	US	Investment Company Act Rule 35d-1 (Names Rule) as amended in 2023	80% investment policy for registered funds whose names suggest a focus, including ESG terms; check compliance dates on sec.gov
REG-013	US	SEC proposals on ESG disclosure for advisers and funds	Withdrawn by the SEC on 2025-06-12; no current obligation from them
REG-014	UK	UK Stewardship Code 2026 (Financial Reporting Council), effective 2026-01-01	Voluntary signatory regime with annual reporting; FCA rules require asset managers to disclose their commitment to the Code or explain. Cited by name only
REG-015	UK	FCA Sustainability Disclosure Requirements and investment labels regime, including the anti-greenwashing rule	Applies to UK-authorised firms; cited by name only, check the FCA Handbook
REG-016	Voluntary	Principles for Responsible Investment (PRI), six Principles and annual reporting	Signatory commitments; cited by name only
REG-017	[Jurisdiction]	[National rule]	[Relevance]

3. Investment beliefs

ID	Belief	How it shows in the process
BEL-001 (Example)	Well-governed companies allocate capital better over a full cycle	Governance score is a required input in every equity and credit model
BEL-002 (Example)	Climate transition and physical risks are mispriced in some sectors	Sector-specific transition analysis and scenario tests (section 8, 11)
BEL-003 (Example)	Engagement by long-term owners can improve outcomes more than divestment	Engagement before exclusion except for legal or norm-based bans (section 12)
BEL-004 (Example)	Clients have different sustainability preferences that must be met precisely	Product range by approach (section 5) and suitability process (section 14)

4. Governance and responsibilities

Task	Board	RI committee	RI team	Portfolio managers	Compliance	Risk
Approve this policy	A	R	C	C	C	C
Set exclusion list	I	A	R	C	C	I
Integrate ESG in investment decisions	I	I	C	A, R	I	C
Engagement and escalation	I	A	R	R	I	I
Voting decisions	I	A (policy)	R	C	C	I
Product classification and naming	I	A	C	C	R	I
Pre-trade and post-trade exclusion checks	I	I	C	I	A, R	C
Sustainability risk monitoring	I	I	C	C	I	A, R
Marketing and disclosure review	I	I	C	C	A, R	I

The RI committee meets [quarterly], is chaired by [the CIO], and includes [the head of RI, two portfolio managers, the CCO and the chief risk officer]. Portfolio managers keep final decision authority over individual positions within this policy and product rules.

5. Responsible investment approaches by product

Approach	Definition used by the Firm	Products (Example)
ESG integration	Financially material ESG factors are analysed alongside other factors in valuation and risk; no binding portfolio constraint	All active strategies
Firm-wide exclusions	Issuers excluded for legal or norm-based reasons across all products	All products (section 7)
Product exclusions	Additional binding exclusions stated in product documents	Kestrel Bay Global Sustainable Equity Fund (Example)
Binding ESG characteristics	Commitments such as minimum ESG score, carbon intensity below benchmark	Kestrel Bay Euro Credit ESG Fund (Example)
Sustainable investment objective	Each investment must meet the Firm's sustainable investment test (contribution, no significant harm, good governance)	Kestrel Bay Climate Solutions Fund (Example)
Impact	Intentional, measurable positive outcomes alongside financial return, with an impact measurement framework	[Private markets impact fund]
Stewardship	Engagement and voting to improve long-term value	All products with voting rights or creditor access

Sustainable investment test. For products that commit to a share of sustainable investments under SFDR Article 2(17), the Firm documents: (a) the contribution indicators used; (b) how it checks that the investment does no significant harm, using the PAI indicators in section 9; and (c) the good-governance test for investee companies. The methodology is in [Appendix or manual reference] and is approved by the RI committee.

6. ESG integration process

Asset class	Main inputs	Where it enters the decision	Evidence kept
Listed equity	Sector materiality map, company disclosures, third-party data, controversy alerts	Cost of capital or terminal value adjustment; position sizing	Research note section "ESG view"
Corporate credit	Governance, transition exposure, controversies	Internal credit rating notch adjustment; spread view	Credit memo field
Sovereign debt	Institutional strength, climate vulnerability, social indicators	Country risk score	Country note
Private equity	Pre-investment ESG due diligence, value creation plan	Investment committee memo; 100-day plan	Due diligence report, annual portfolio survey
Real assets	Physical climate risk, energy efficiency, local community	Capex budget, valuation	Technical due diligence

Example (Example): an analyst covering Halvard Tools, a fictional listed toolmaker, identifies product safety and supply-chain labour standards as material. The research note raises the cost of equity by 0.25 percentage points until an audit programme for tier-1 suppliers is in place, and an engagement objective ENG-014 is opened (section 12).

7. Exclusions and restrictions

ID	Exclusion	Rationale	Measure and threshold (Example values)	Scope	Data source
EXC-001	Controversial weapons (anti-personnel mines, cluster munitions, chemical and biological weapons)	Legal in several jurisdictions; norm-based	Any involvement	All products	[Vendor]
EXC-002	Companies in severe breach of international norms (UN Global Compact, OECD Guidelines for Multinational Enterprises) without credible remediation	Norm-based; financial risk	Vendor flag "fail" confirmed by RI team review	All products	[Vendor] plus internal review
EXC-003	Thermal coal mining	Transition risk	Revenue share above 10%	Article 8 and 9 products	[Vendor]
EXC-004	Tobacco production	Product policy	Revenue share above 5%	Article 8 and 9 products	[Vendor]
EXC-005	Exclusions linked to EU Paris-aligned benchmark rules (Delegated Regulation (EU) 2020/1818 Article 12(1)(a) to (g))	Required under the ESMA guidelines for fund names using environmental, impact or sustainability-related terms; ESMA treats "ESG" as including an environmental term	As set in the regulation	Funds using those terms	[Vendor]
EXC-005b	Exclusions linked to EU Climate Transition Benchmark rules (Delegated Regulation (EU) 2020/1818 Article 12(1)(a) to (c))	Required under the ESMA guidelines for fund names using transition, social or governance terms (where no environmental, impact or sustainability term is also used)	As set in the regulation	Funds using those terms	[Vendor]
EXC-006	Sanctioned issuers	Legal	Listed on applicable sanctions lists	All products	Compliance
EXC-007	[Client-specific exclusion]	Client instruction	[Measure]	[Account]	[Source]

Implementation. Exclusion lists are refreshed [quarterly] and coded as hard pre-trade blocks in [order management system]. A holding that becomes excluded is sold within [90] days unless the RI committee approves an extension for liquidity reasons, recorded in the exceptions log.

8. Sustainability risk assessment

Step	Method	Output
Identify	Sector materiality map; controversy alerts; physical hazard maps for real assets	Issuer risk flags
Measure	Scores and indicators; climate scenario analysis with transition and physical pathways	Portfolio risk metrics
Assess effect on return	Qualitative rating of likely impact on product returns (low, medium, high) with reasons	Pre-contractual statement under Article 6
Manage	Position limits, engagement, hedging where possible	Actions log
Monitor	Quarterly risk report to RI committee	Trend and limit breaches

Product	Main sustainability risks (Example)	Likely impact on returns (Example)
Global equity	Transition risk in energy and materials holdings; governance failures	Medium
Euro credit	Transition risk for high emitters with refinancing needs	Medium
Infrastructure	Physical risk (flood, heat) to assets	Medium to high
Government bonds	Climate vulnerability of issuers	Low

Climate scenarios. The Firm runs [an orderly transition, a disorderly transition and a hot-house world] scenario for each product at least [annually] using [named scenario set and version], and reports the estimated value change.

9. Principal adverse impacts

Entity position. [Kestrel Bay Capital Europe considers principal adverse impacts of its investment decisions on sustainability factors and publishes its statement by 30 June each year for the previous calendar year.] The statement follows the SFDR Principal Adverse Impacts Statement template (compliance/sfdr-pai-statement).

Indicators. The Delegated Regulation sets 18 mandatory indicators (14 for investee companies, 2 for sovereigns and supranationals, 2 for real estate) plus at least one additional environmental and one additional social indicator chosen by the firm.

Priority	Indicator group (Example)	Action linked
1	Greenhouse gas emissions and intensity	Climate targets (section 11); engagement with top emitters
2	Violations of international norms	EXC-002 exclusion and engagement
3	Board gender diversity	Voting policy on board composition
4	Exposure to controversial weapons	EXC-001 exclusion
5	[Additional social indicator chosen]	[Action]

10. Product classification and naming

Product	SFDR classification (Example)	Binding elements (Example)	Name test (Example)	Approved
Kestrel Bay Global Sustainable Equity Fund	Article 8, minimum 50% sustainable investments	EXC-001 to EXC-005; WACI at least 20% below benchmark	At least 80% meets characteristics; sustainable term used, so a meaningful share of sustainable investments is expected (ESMA Q&A: below 50% is unlikely to be meaningful) and Paris-aligned benchmark exclusions apply	YYYY-MM-DD
Kestrel Bay Euro Credit ESG Fund	Article 8	EXC-001 to EXC-005; minimum average ESG score	At least 80% meets characteristics; "ESG" is treated as an environmental term, so Paris-aligned benchmark exclusions apply	YYYY-MM-DD
Kestrel Bay Climate Solutions Fund	Article 9	100% sustainable investments except cash and hedging	Environmental term: EU Paris-aligned benchmark exclusions apply	YYYY-MM-DD
Kestrel Bay Global Equity Fund	Article 6	Firm-wide exclusions only	No ESG term in name	YYYY-MM-DD

Applying the names test. Classify every term in the fund name before launch and at each name change: environmental, impact and sustainability-related terms (and "ESG", which contains an environmental term) take the Paris-aligned benchmark exclusions in EXC-005; transition, social and governance terms take the Climate Transition Benchmark exclusions in EXC-005b. Test the 80% threshold on the investments used to meet the characteristics or objectives, using the same calculation as the pre-contractual disclosure, and record the calculation, the data date and the reviewer. A temporary fall below the threshold that is not caused by a deliberate choice of the portfolio manager is treated as a passive breach and corrected in the best interests of investors; a deliberate breach is escalated to the RI committee and compliance at once. Keep the ESMA supervisory Q&A on the guidelines under review, because supervisors have used it to narrow how terms are classified.

US funds. For registered funds whose names include ESG terms, the Firm adopts the 80% investment policy required by Rule 35d-1 and defines the term in the prospectus.

SFDR 2.0. If the proposal is adopted, the Firm will map each product to the new categories and update this section. Until then, the current Article 6, 8 and 9 disclosures apply.

11. Climate commitments and metrics

The weighted average carbon intensity (WACI) of a portfolio is:

\text{WACI} = \sum_{i=1}^{n} w_i \times \frac{E_i}{\text{Rev}_i}

where $w_i$ is the weight of issuer $i$ in the portfolio (or sleeve), $E_i$ its scope 1 and 2 emissions in tonnes CO2e and $\text{Rev}_i$ its revenue in EUR million.

Holding (Example)	Weight	Emissions (tCO2e)	Revenue (EUR m)	Intensity (t/EUR m)	Contribution
Halvard Tools (fictional)	40%	450,000	3,000	150	60.0
[Issuer B]	35%	30,000	1,500	20	7.0
[Issuer C]	25%	500,000	1,000	500	125.0
Portfolio	100%				192.0

With a benchmark WACI of 210 t/EUR m, the example sleeve is 8.6% below the benchmark ((210 minus 192) / 210).

ID	Commitment (Example)	Base year	Interim target	Method
CLM-001	Reduce WACI of in-scope listed equity and credit	YYYY	50% lower by 2030	Portfolio construction and engagement
CLM-002	Share of financed emissions from issuers with science-based or credible transition plans	YYYY	70% by 2030	Engagement (section 12)
CLM-003	Increase investment in climate solutions	YYYY	EUR [x]m by 2030	Product range
CLM-004	Report scope 3 emissions where data quality allows	YYYY	Disclose with data quality score	Reporting

Report progress annually with data coverage and quality notes. Where an interim target is missed, the RI committee records the reasons and the corrective plan.

12. Stewardship: engagement, escalation and voting

Engagement. The Firm selects engagement targets by [size of holding, severity of issue, likelihood of success] and sets a specific objective, milestones and a deadline for each.

ID	Issuer	Topic	Objective	Start	Milestone	Status
ENG-014 (Example)	Halvard Tools (fictional)	Supply-chain labour standards	Independent audits of all tier-1 suppliers published	YYYY-MM-DD	Policy adopted by YYYY-MM-DD	In progress
ENG-021 (Example)	[Issuer C]	Transition plan	Publish interim emissions targets and capex plan	YYYY-MM-DD	Targets published	Achieved

Escalation ladder.

Private meeting with management and investor relations.
Letter to the chair or lead independent director.
Collaborative engagement with other investors, subject to competition and acting-in-concert rules.
Vote against relevant directors or items at the general meeting.
Public statement or filing of a shareholder resolution.
Reduce or sell the position, or add to the exclusion list, by RI committee decision.

Voting. Voting follows the Proxy Voting Policy (compliance/proxy-voting-policy), which meets Rule 206(4)-6 for the US adviser and SRD II Article 3g for the EU entity. Votes are cast for all holdings where practicable; securities on loan are recalled for votes the Firm considers significant. Annual results, significant votes and engagement outcomes are published in the Stewardship Report (finance/stewardship-report).

Conflicts. Engagement and voting conflicts (for example, an issuer that is also a client) are managed under the Firm's conflicts policy and recorded.

13. Data, ratings and anti-greenwashing controls

ID	Control	Owner	Frequency
CTL-001	Due diligence on ESG data vendors: method, coverage, update frequency, conflicts	RI team	At selection and annually
CTL-002	Coverage and estimation flags reported with every metric	RI team	Each report
CTL-003	Pre-trade exclusion blocks; post-trade breach report	Compliance	Daily
CTL-004	Review of all sustainability-related marketing and client materials against product documents	Compliance	Each item, using the Marketing Review Checklist (`compliance/marketing-review-checklist`)
CTL-005	Annual test that each Article 8 and 9 product met its binding elements	Risk	Annual
CTL-006	Sub-adviser RI assessment and monitoring	Investment due diligence	Selection and annual, recorded in the Manager Due Diligence Report (`finance/manager-due-diligence-report`)
CTL-007	Records of ESG analysis for each investment decision	Portfolio managers	Ongoing; sampled quarterly

Wording rules. Do not use "sustainable", "green", "impact", "net zero" or similar terms for a product, strategy or holding unless the product documents contain the binding commitments that justify the term. Statements about outcomes must be specific, supported by data and dated.

14. Client sustainability preferences

For EU clients receiving investment advice or portfolio management, the Firm collects sustainability preferences as part of the suitability assessment, after the client's knowledge and experience, financial situation and objectives are known. Preferences are recorded as: a minimum share of Taxonomy-aligned investments; a minimum share of sustainable investments; and principal adverse impacts to be considered, with the qualitative or quantitative elements the client chooses.

If no product matches the preferences, the Firm explains this to the client, and the client may adapt the preferences; the explanation and the decision are recorded. The process is documented in the Client Risk Profile (finance/client-risk-profile) and MiFID Suitability Report (compliance/mifid-suitability-report). US clients may give written restrictions or preferences in their investment guidelines.

15. Remuneration

The Firm's remuneration policy is consistent with the integration of sustainability risks: [portfolio manager variable pay is assessed on multi-year risk-adjusted performance, which includes the effect of sustainability risks; a qualitative modifier reflects adherence to this policy and product commitments; breaches of exclusion or product rules can reduce variable pay]. The public summary is published at [URL].

16. Monitoring, reporting and review

KPI (Example)	Target	Current	Source
Share of assets under management covered by ESG integration evidence	100% of active strategies	[x]%	CTL-007 sampling
Exclusion breaches (active)	0	[x]	CTL-003
Engagements with objective achieved in the year	[30]% of closed engagements	[x]%	Engagement log
Votes cast as a share of votable meetings	At least 98%	[x]%	Voting platform
WACI reduction versus base year (CLM-001)	On track for 50% by 2030	[x]%	Section 11
Data coverage for PAI indicators	At least 85%	[x]%	Vendor

Report	Audience	Frequency	Basis
PAI statement	Public	Annual by 30 June	SFDR Article 4
Periodic product reports (Article 8 and 9 annexes)	Investors	Annual with fund report	SFDR Article 11
Stewardship report	Public, clients	Annual	SRD II Article 3g; UK Stewardship Code 2026
Proxy voting record	Public, clients	Annual or on request	Rule 206(4)-6; SRD II
RI committee report	Board	Quarterly	This policy
Client ESG reports	Clients	Quarterly	Mandate

Review. This policy is reviewed at least annually, and when law, product range or methodology changes materially. Each review is recorded in the revision history.

How to review this policy. Start from evidence, not from the text. Sample investment decisions from each strategy and check that the ESG view in the research record actually changed a valuation, rating, position size or engagement plan; take every product with binding elements and test the year-end portfolio against them; and compare the public policy, the product documents, the website and recent marketing for the same claim. Ask the RI committee to approve the findings and the changes in one paper, so that the public version, the internal manual and the product documents move together.

Common errors. The errors supervisors most often find are: an exclusion threshold stated in the policy but coded differently in the order management system; an Article 8 product whose binding elements are so loose that the benchmark already meets them; PAI indicators "considered" with no action ever taken on them; climate targets reported without data coverage, so a rise in coverage looks like progress; engagement counted by meetings rather than by objectives achieved; and fund names changed in marketing before the legal documents. Each control in section 13 exists to catch one of these, so a failed control test should lead to a correction of the process as well as the record.

17. Glossary and references

17.1 Glossary

Term	Meaning
ESG integration	Including financially material environmental, social and governance factors in investment analysis
Exclusion	A binding rule that prevents investment in certain issuers or activities
PAI	Principal adverse impacts: negative effects of investment decisions on sustainability factors
Stewardship	Responsible allocation, management and oversight of capital through engagement and voting
Sustainability risk	An ESG event or condition that could cause a material negative effect on the value of an investment
Sustainable investment	An investment that contributes to an environmental or social objective, does no significant harm and follows good governance, as defined in SFDR Article 2(17)
Taxonomy-aligned	Economic activity meeting the technical screening criteria of the EU Taxonomy
WACI	Weighted average carbon intensity: portfolio-weighted emissions per unit of revenue

17.2 References

Reference	Version or date	Use
Regulation (EU) 2019/2088 (SFDR)	OJ L 317, 9.12.2019, as amended	REG-001 to REG-004
Commission Delegated Regulation (EU) 2022/1288	OJ L 196, 25.7.2022, as amended	PAI indicators, product templates
Regulation (EU) 2020/852 (Taxonomy)	OJ L 198, 22.6.2020, as amended	REG-005
Commission Delegated Regulation (EU) 2020/1818	Article 12(1)	EXC-005
ESMA Guidelines on funds' names using ESG or sustainability-related terms	ESMA34-1592494965-657 (2024)	REG-006
Directive (EU) 2017/828 (SRD II)	OJ L 132, 20.5.2017	REG-007
ESMA Guidelines on certain aspects of the MiFID II suitability requirements	ESMA35-43-3172 (2023)	Section 14
17 CFR 275.206(4)-6	Current	REG-010
29 CFR 2550.404a-1	87 FR 73822 (2022); replacement pending as of 2026-10	REG-011
UK Stewardship Code 2026	Effective 2026-01-01 (name only)	REG-014
Principles for Responsible Investment	Name only	REG-016
Related templates	This library	`compliance/proxy-voting-policy`, `finance/stewardship-report`, `compliance/sfdr-pai-statement`, `compliance/marketing-review-checklist`, `finance/client-risk-profile`, `compliance/mifid-suitability-report`

Standard and licence note

Based on public law and regulatory guidance: Regulation (EU) 2019/2088, Commission Delegated Regulations (EU) 2022/1288 and 2020/1818, Regulation (EU) 2020/852 and Directive (EU) 2017/828 (EUR-Lex, reuse with acknowledgement); the ESMA guidelines on fund names and on MiFID II suitability (reuse with acknowledgement; ESMA does not endorse this template); and US federal rules 17 CFR 275.206(4)-6, 29 CFR 2550.404a-1 and Rule 35d-1 (public domain). Article and rule numbers are cited and obligations are summarised in original wording. The UK Stewardship Code 2026, the FCA sustainability rules and the Principles for Responsible Investment are cited by name only, and this template is not affiliated with or endorsed by the Financial Reporting Council, the FCA or PRI. The structure and text are original. Check the current official versions, the consolidated texts and the status of SFDR 2.0 and the US Department of Labor rulemaking before use. This is a document format, not financial, investment, tax, legal or accounting advice. Template licence: MIT.