No Consideration of Sustainability Adverse Impacts of investment decisions/advise of sustainability factors

In line with Regulation EU 2019/2088 – the Sustainable Finance Disclosure Regulation, Jesmond Mizzi Financial Advisors Limited (‘the Company’ or ‘JMFA’) qualifies both as a Financial Market Participant (FMP) as well as a Financial Adviser (FA). The Regulation requires firms that fall within the number of staff employed criteria, to make a ‘comply or explain’ decision as to whether they consider principal adverse impacts (‘PAIs’) of investment decisions on sustainability factors. PAIs are defined under the Sustainable Finance Disclosure Regulation (SFDR) as “environmental, social or governance impacts that have, or may have, a negative effect on sustainability.”

In addition to SFDR, Article 12 of Commission Delegated Regulation EU 2022/1288 requires Financial Market Participants that do not consider adverse impacts of their investment decisions on sustainability factors to disclose information on their website to this effect. Also, Article 13 of the same commission Delegated Regulation requires Financial Advisers that do not consider adverse impacts of investment decisions on sustainability factors in their investment advice to also disclose this on their website.

JMFA is committed to promote sustainable finance and transparency practices both when acting as a Financial Market Participant as well as when acting as a Financial Adviser. The Company ensures it is transparent with its client about the measures taken by the Company and report the sustainability of its products and services. Taking into account the size, nature and scale of the operations of JMFA, the Company has decided not to comply with the PAI Regime at this current time. Notwithstanding, the Company is taking steps to implement the required process to start considering PAIs, including:

  1. The methodology used for the assessment of adverse impacts; and
  2. Risk assessment conducted.

The Company feels that the following factors contributed towards the Company not considering PAIs at this point in time:

  • The complexity of measuring impacts: Measuring the principal adverse impacts of the activities and investments of the Company is considered as a complex exercise. This will require methodologies and significant resources dedicated solely on analysis and data reporting; and
  • Lack of data: Data available by product manufacturers is still limited, therefore, the Company feels that unless full information is available from product manufacturers, it may be difficult to comply with PAI disclosures.

While the Company will continuously strive to minimize any negative impact associated with our products and services, the Company does not currently have the methodology in place to fully assess the PAIs of its operations. Having said this, the Company is fully committed to ESG matters.
The Company is committed to improve its approach to sustainability and of integrating PAIs into its methodologies when and where possible. The Company shall continuously review its decision on complying with PAI regime and plans to comply with these in the coming months.

Version Control

Version Date Key Changes
1.0 10 March 2021
2.0 23 June 2023 Enhancement to the Principal Adverse Impact statement