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 August 02, 2022. Accordingly, financial investment intermediaries, investment advisors and investment services companies that offer investment advice or financial portfolio management are obliged to implement them. Accordingly, they must ask their customers about their sustainability preferences as part of the suitability check and must take these into account when choosing a financial product. Investors actively make the decision in the customer questionnaire as to whether there is an interest in investing in sustainable financial products.

Whether an investment can be considered sustainable depends on whether a valuable contribution is made to the realization of the sustainability factors on the part of the company. However, it must be viewed critically that there is not yet a standardized classification system in accordance with the taxonomy. Whether and to what extent a company thus makes a sustainable contribution and accordingly falls under the preferences of the customer can only be determined with difficulty on the part of the investment advisor. Nonetheless, the financial products may, for example, be alternative investment funds, retirement provision products or environmental and social issues.

According to a survey, it is important to investors for 51% that the company's profit generation is in line 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 rather than generating short-term profits (source: Union Investment, Sustainable investments are becoming increasingly popular, 2021).

Due to the active questioning regarding the sustainability preferences of a customer, a further increasing tendency in sustainable investments is to be expected from the coming year. For the obligated parties, it is primarily an additional effort, through the adaptation of the customer questionnaires, which must be fulfilled. Accordingly, it is still necessary to wait for the implementation of the obligated parties.

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