03 December 2021

The relevance of the topic of sustainability continues to grow and is playing an increasingly important role in the financial sector in particular. According to a study by Union Investment, 59% of respondents want to invest more in sustainable companies in the future (source: Union Investment, Nachhaltige Geldanlagen werden immer beliebtter, 2021). This intention is further supported by the latest Regulation (EU) 2921/1253 ("DVO") in the investment sector, which will come into force next year.

The so-called sustainability preferences are the focus here and are to be included and implemented as a fixed component of investment advice and financial portfolio management as of 2 August 2022. Accordingly, financial investment intermediaries, investment advisors and investment service providers offering investment advice or financial portfolio management are obliged to implement them. Accordingly, they must ask their clients about their sustainability preferences as part of the suitability check and take them into account when choosing a financial product. Investors actively make the decision in the customer questionnaire as to whether they are interested in investing in sustainable financial products.

Whether an investment can be considered sustainable depends on whether a valuable contribution is made to the realisation of the sustainability factors on the part of the company. However, it is critical to consider that there is not yet a standardised classification system according to the taxonomy. Whether and to what extent a company makes a sustainable contribution and therefore falls under the preferences of the client is difficult for the investment advisor to determine. Nevertheless, the financial products can be alternative investment funds, pension products or environmental and social issues, for example.

According to a survey, it is important to investors for 51% that the company's profit generation is in harmony with the environment and climate protection. For a further 47%, the focus is on ensuring that profits are in line with social aspects, and for 84% of respondents it is particularly important that companies act in the long term instead of generating short-term profits (source: Union Investment, Nachhaltige Geldanlagen werden immer beliebt, 2021).

Due to the active questioning regarding the sustainability preferences of a customer, a further increasing trend in sustainable investments is to be expected from the coming year. For the obligated parties, it is first and foremost an additional effort that has to be fulfilled by adapting the customer questionnaires. Accordingly, it is still necessary to wait for the implementation of the obligated parties.

Additionally: Which milestones the ECB is aiming for in the future to achieve a green monetary policy can be read here in the news.