Information about JMFA’s Integration of Sustainability Risk

The below information is disclosed in line with regulatory obligations relating to Regulation (EU) 2019/2088 (SFDR) of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector which came into force on the 10th March 2021.

In line with SFDR obligations, Jesmond Mizzi Financial Advisors (‘JMFA’) falls under the scope of both a Financial Market Participant as well as a Financial Adviser.

Article 3 of SFDR requires Financial Market Participants to publish on their website information about their policies on the integration of sustainability risk in their investment decision processes. Additionally, Article 3 extends also to Financial Advisers whereby these must include on their website information about their policies on the integration of sustainability risks in the provision of investment or insurance advice.

JMFA has in place a sustainability risk policy which is governed by the ESG Committee – an internal committee within JMFA. The role of the ESG Committee is to provide direction on ESG investment risk strategy and develop internal tools and resources which promote awareness and understanding of ESG risks within the firm. JMFA is committed to delivering attractive risk-adjusted returns for its clients over the long-term. The Company’s investment approach is governed by incorporating a number of investment principles into its processes amongst which include active management, the focus on total returns, and emphasis on capital preservation. JMFA adopts a system where ESG risk factors are considered as part of the broader investment process. Such an approach results into managed portfolios that do not automatically exclude issuers from investment purely on ESG criteria. This ensures that the portfolio managers within JMFA are aware of, and take informed investment decisions with knowledge of key ESG risks. The Company feels that this approach to the investment process whereby emphasis is made on ‘looking at the bigger picture’ will ensure that while ESG factors are an important factor of investment decisions, these are not necessarily the key determinants in the final investment decision making process, which ultimately reflects the view of an investment’s risk or return.

In addition to the above, JMFA adopts a similar approach when providing clients with investment or insurance advice. While the Company tends to provide investment advice towards products which provide long-term benefits on a Do No Harm basis and limits investment advice in relation to products which have negative impacts on ESG, the Company feels that these factors are not the primary determinants in the provision of investment or insurance advice. Furthermore, the Company believes that the weight of ESG factors when providing investment advice depends largely on other factors such as the investment objective, risk tolerance and time horizon of the investment in relation to the client’s profile. The Company, however, has recently initiated discussions to formally and systematically incorporate ESG related risk factors in the provision of investment or insurance advice.

Remuneration Policy

JMFA staff remuneration is set to ensure that remuneration is also rewarding staff members acting in line with the mission, vision and strategy of the shareholder and Board of Directors respectively. Sustainability risk is integrated within the Company’s remuneration policy and therefore, the Company expects all staff members to follow such practices as set by the ESG Committee of JMFA.