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ESG - Environmental Social Governance Solution
ESG - Environmental Social Governance Solution

Sustainability Risk Policy

Bank of Valletta p.l.c. (the “Company”) falls within scope of Regulation (EU) 2019/2088 of the European Parliament of the Council of 27 November 2019 on sustainability‐related disclosures in the financial services sector (the Sustainable Finance Disclosure Regulation or SFDR), which will come into force on the 10th March, 2021 requiring financial market participants, including the Company, to make certain sustainability-related disclosures to end investors.

BOV Wealth Management’s objective is to enhance your financial situation through its wealth investment services.  With an informed insight of the markets, an extensive range of financial services and products, and a reputation for managing the complexities of financial needs, we can tailor-make and manage your investment portfolio designed specifically around your requirements. BOV did not develop a specific sustainability risk policy but rather incorporate elements of sustainability in the existing BOV Sales Policy.

Environmental, Social and Governance (ESG) Solutions

Investment Advice and Portfolio Management Service are of a medium to long term nature, this implies that long term risks and opportunities have to be taken into consideration.   We will steer our recommendations into making socially and environmentally responsible investment decisions.  Our investment advice or portfolio management will be taking into consideration the ESG rating, taking into consideration your (the client) ESG preferences, which can ultimately impact the long term risks and opportunities when investing in the selected company. 

What is ESG?

ESG stands for Environmental, Social, and Governance and is a non-financial factor which is being taken highly into consideration as part of an investment solution to identify material risks and growth opportunities. 

Environmental, social, and governance (ESG) criteria are a set of standards for a company’s ethical operations that socially conscious investors use to screen potential investments.

  • Environmental – Take into consideration how the company performs whilst being environmentally conscious.
  • Social – Take into consideration how relationships with internal and external stakeholders are managed.
  • Governance – Take into consideration a company’s leadership, executive pay, audits, internal controls, and shareholder rights.

 

The ESG factor can impact the risk and return of the investment as well as the pricing of the financial asset and the valuation and performance of companies.

What is Sustainable Investing and how do we intend to achieve this?

Sustainable investing is the process of incorporating environmental, social and governance (ESG) factors into investment decisions. Investment decisions are therefore more inclined towards investments with good ESG ratings and are also based on ones values and priorities.

In our investment proposition we will take into consideration a company’s ESG rating which has recently increased in popularity and demand, thus we will not only assess the potential return of the investment but also the impact from an environment, social and governance aspect thus improving long-term outcomes.  To do so, we will rely on the ESG rating as being quoted by REFINITIV.  A document detailing the ESG rating methodology implemented by Refinitiv (which presently applies to Equities and Equity Funds/ETFs only) can be found by accessing the website here.

Unless otherwise instructed by you (the client), we will recommend investing in securities and funds with a REFINITIV ESG Rating of C- or better i.e. in companies or funds which invest in companies with a “satisfactory relative ESG performance and moderate degree of transparency in reporting material ESG data publicly.”

Nevertheless, the unavailability of an ESG rating (due to, for example, lack of available data for Malta Stock Exchange listed securities) will not prevent BOV Wealth Management from investing in such securities or funds. Any investment made in securities or funds lacking an ESG score must however respect the spirit of ESG investing in general.

We will also take into consideration your preferences and include them in our investment solution proposed to you.

BOV Wealth Management reserves the right of amending the ESG scoring methodology in the future.

Principal Adverse Impact Statement

BOV believes in the importance of taking a responsible approach to investment. Part of this approach includes considering how the investment decisions we make for our end clients might have material negative effects on environmental, social and governance factors (“Sustainability Factors” or just “ESG”). Any investment decision we take might have a negative effect on the sustainability factors.

This Principal Adverse Impact statement covers the period from January 28, 2021 to 31 December 2021.

Making good sustainable decisions will help to support long-term returns and increase the growth and stability of the financial system.

Our investment decisions are reviewed to determine the impact Sustainability Factors have on our approach. We will thus look at the potential impact ESG risks will have on the investment value chosen as well as how our decisions will have an adverse impact on Sustainability Factors.

During our assessment, amongst other factors, we will also consider the principal adverse impact and it will have an important role in determining the exclusion of some investments.  We use external market research providers and other publicly available information, internal dashboards, tools and frameworks and the expertise of our investment team to identify the principal adverse impacts on sustainability factors.

We will continue developing our investment decision approach along the coming months so as to comply with our regulatory obligations.

 

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Bank of Valletta p.l.c. is a public limited company regulated by the MFSA and is licensed to carry out the business of banking and investment services in terms of the Banking Act (Cap. 371 of the Laws of Malta) and the Investment Services Act (Cap.370. of the Laws of Malta).