The financial sector should make a significant contribution towards achieving climate goals and to promote a sustainable economy. For a number of years now, sustainable investments have been the fastest growing category of investments in the regulated market for financial products in Austria. For example, around one third of the total assets managed by Austria investment funds, some € 78 billion, is already classified in one way or the other as “green” i.e. sustainable. Ultimately, however, it is down to every individual investor to decide whether and how they wish to consider sustainability criteria when investing their money. The Austrian Financial Market Authority (FMA) therefore addresses the rights and opportunities about how consumers can take sustainability into account when making investment decisions in the latest addition of its consumer information series “Let’s talk about money”.
Sustainability preferences
When providing investment advice, financial services providers are also obliged to ask about their customers’ sustainability preferences. Investors may define which sustainability criteria are to be taken into account, how strongly they should be weighted in their whole portfolio, to which financial instruments they relate, or whether it only applied to new investments. The financial services provider subsequently is only allowed to only recommend products that match the investor’s sustainability preferences. Naturally, the customer may change their preferences at any time.
Standardised sustainability criteria
The European Union defines sustainability (ESG) by means of three parameters:
- Environmental objectives (E): climate change mitigation, climate change adaptation, protection of water and marine resources, a circular economy, biodiversity and pollution prevention.
- Social objectives (S): poverty reduction, gender equality, education, hunger reduction, human dignity and equal opportunities.
- Good governance objectives (G): IT security, diversity, compliance with all legal rules and transparent structures
Investing is considered to be sustainable where the investment contributes towards the realisation of one of they ESG objectives. However, when realising an objective, none of the other ESG objectives is permitted to be breached. Sustainability is defined by means of a criterion for inclusion (an ESG objective being met) as well as a criterion for exclusion (an ESG objective being breached).
The current edition of “Let’s talk about money” on “Sustainability when investing” can be found at:
Sustainability when investing
Furthermore, the FMA has already dedicated a previous edition of its consumer information series “Let’s talk about money” to “Greenwashing”, in which it explains how and why sustainability is often used as a ploy to increase sales volume. In addition, the “A to Z of Finance” section of the FMA website also contains general information about the topic of investment in clear and easy to understand language.
Journalists may address further enquiries to:
Klaus Grubelnik (FMA Media Spokesperson):
+43/(0)1/24959-6006
+43/(0)676 88 249 516