This policy explains how sustainability risks and client sustainability preferences may be considered when SJB Global provides investment advice.

Our objective is to help clients understand the factors that may be relevant to the long-term risks and characteristics of an investment. Environmental, social and governance information can form part of that assessment alongside financial factors such as investment objectives, risk tolerance, capacity for loss, costs, liquidity, diversification and time horizon.

ESG considerations do not replace the wider suitability assessment, and an investment is not suitable merely because it has an ESG or sustainability label.

This policy is intended to provide general information about our approach. It does not constitute investment advice, a recommendation or a guarantee that any investment will achieve a particular environmental, social, governance or financial outcome.

This policy applies when sustainability risks are relevant to investment advice provided through SJB Global.

The process may cover financial instruments and products such as:

• undertakings for collective investment in transferable securities (UCITS);
• other collective investment funds where available and appropriate;
• transferable securities, including equities and bonds; and
• exchange-traded funds and similar investment instruments.

The precise regulatory framework, product range and information available may differ according to the client’s residence, the service provided, the relevant SJB or BFMI entity, and the jurisdiction in which advice is delivered.

This policy does not apply to the reception and transmission of orders where no personal investment advice or suitability assessment is provided. Product manufacturers and investment managers remain responsible for their own investment decisions, product disclosures, classifications and sustainability claims.

A sustainability risk is an environmental, social or governance event or condition that, if it occurs, could cause an actual or potential material negative impact on the value of an investment.

Sustainability risk is therefore concerned with the possible financial effect of an ESG event or condition on an investment. It is considered alongside other relevant risks rather than as a separate guarantee of investment quality or performance.

Examples may include:

Environmental And Physical Risks

Physical risks may arise from acute events such as floods, storms, wildfires or extreme heat, or from longer-term developments such as water scarcity, changing temperatures, biodiversity loss and rising sea levels. These events may affect assets, supply chains, insurance costs, business continuity and investment values.

Transition Risks

The transition to a lower-carbon or more resource-efficient economy may create regulatory, legal, technological, market and reputational risks. Changes in policy, consumer demand, energy systems or technology may affect some businesses and sectors more than others.

Social And Human-Rights Risks

Social risks may include poor labour practices, unsafe working conditions, discrimination, modern slavery, child labour, failures to respect communities or indigenous peoples, inadequate data protection and other human-rights concerns. These issues may lead to operational disruption, litigation, regulatory action or reputational harm.

Governance And Ethical Risks

Governance risks may include weak oversight, conflicts of interest, inappropriate remuneration, corruption, bribery, sanctions breaches, tax evasion, poor treatment of minority shareholders, inadequate controls or failures in business ethics.

Reputational Risks

Environmental, social or governance controversies may affect public trust, customer behaviour, access to capital, regulatory scrutiny and the value of an issuer or investment. Reputational effects may accompany one or more of the risks described above.

Sustainability risk and adverse sustainability impacts describe different perspectives.

• Sustainability risk considers how an environmental, social or governance event or condition may negatively affect the value or return of an investment.
• Adverse sustainability impacts consider how an investment decision or underlying economic activity may negatively affect environmental or social sustainability factors.

Principal adverse impacts are commonly assessed using indicators relating to matters such as greenhouse-gas emissions, biodiversity, water, waste, social standards, human rights and governance.

Where relevant, reasonably available and supported by reliable product or provider information, adverse-impact information may form part of the discussion of a client’s sustainability preferences. The availability, quality and comparability of this information vary considerably between products, issuers, providers and jurisdictions.

Nothing in this policy should be read as a representation that complete principal-adverse-impact information is available for every investment or that every adverse impact can be eliminated.

As part of the advisory process, clients may be asked whether they have sustainability-related preferences or restrictions.

These may include:

• environmental or social themes they would like an investment to support;
• sectors, industries, activities or business practices they would prefer to avoid;
• a preference for products with particular sustainability characteristics or objectives;
• views concerning principal adverse impacts; and
• the importance of these preferences relative to risk, return, diversification, liquidity, cost and other financial objectives.

Preferences should be sufficiently clear to be assessed. A broad instruction such as “invest sustainably” may require further discussion because providers use different definitions, methodologies and thresholds.

We will consider relevant preferences as part of the overall suitability assessment, subject to the products and reliable information available. It may not always be possible to satisfy every preference simultaneously. Where a suitable product matching all stated preferences is not available, this will be explained and the client can decide whether to amend a preference or not proceed.

A client may update sustainability preferences when circumstances or priorities change.

When sustainability risk is relevant to advice, the assessment may use information supplied by product manufacturers, fund managers, investment platforms, research providers and other external data sources.

Information considered may include:

Environmental Factors

Energy use and efficiency, greenhouse-gas emissions, climate exposure, pollution, waste management, water use, biodiversity and the issuer’s approach to environmental risks.

Social Factors

Human and labour rights, health and safety, workforce management, diversity, supply-chain standards, community impact, product responsibility and data protection.

Governance Factors

Board independence and effectiveness, management oversight, remuneration, shareholder rights, audit and internal controls, business ethics, tax practices, anti-bribery measures and regulatory conduct.

The relevance and weight of a factor will depend on the product, issuer, sector and investment strategy. A sustainability factor that is material to one investment may be less material to another.

Where sustainability risk is relevant and sufficient information is available, the advisory process may include:

• identifying the client’s sustainability preferences and exclusions;
• considering sustainability risk alongside conventional financial risks;
• reviewing the product manufacturer’s stated objectives, investment strategy and disclosures;
• considering available ESG research, ratings or indicators;
• comparing relevant characteristics and limitations between potential products;
• considering whether sustainability risks could materially affect expected risk or return;
• explaining material conflicts or trade-offs; and
• recording relevant preferences and the basis of the recommendation.

An ESG rating, label or classification is one input only. It does not, by itself, establish that a product is suitable, sustainable or likely to outperform.

Where a recommended investment is managed by a third-party fund manager, that manager is responsible for security selection, portfolio construction, engagement, stewardship and voting in accordance with its own mandate and policies. SJB Global does not control those decisions.

Sustainability analysis involves limitations and uncertainty.

In particular:

• providers may define ESG and sustainability characteristics differently;
• ratings for the same issuer or product may differ between data providers;
• information may be estimated, incomplete, delayed, unaudited or based on self-reporting;
• coverage may be weaker for smaller companies, private assets or certain jurisdictions;
• methodologies, classifications and regulatory standards may change;
• a fund’s holdings and sustainability characteristics may change over time; and
• an ESG label does not prevent exposure to controversial activities or sustainability risks.

We may rely on information supplied by third parties that we reasonably consider appropriate, but we cannot independently verify every underlying data point or guarantee its accuracy, completeness or continuing availability.

These limitations may affect the ability to compare products, assess adverse impacts or match a product precisely to a client’s preferences.

Investments described as ESG, sustainable, responsible, impact-focused or climate-related remain investments and may fall in value as well as rise.

They may also involve:

• concentration in particular sectors, themes or regions;
• exclusion of sectors that subsequently perform strongly;
• exposure to newer businesses or technologies;
• changing regulation, taxonomies and disclosure standards;
• reliance on estimates and forward-looking targets;
• differences between a product’s stated objective and its holdings; and
• greenwashing risk, where sustainability characteristics are unclear, exaggerated, inconsistent or unsupported.

No sustainability label, rating or disclosure eliminates investment risk. Past performance is not a reliable indicator of future results, and sustainability characteristics do not guarantee positive performance or a measurable real-world outcome.

Our approach may be reviewed as regulatory requirements, industry standards, product disclosures and available data develop.

Relevant advisers and personnel should receive information or training appropriate to their roles. Material sustainability information used in advice should be considered within the existing suitability, record-keeping and oversight process.

This policy may be updated from time to time. The current version will be published on this page with its last-updated date.

This policy is intended for general information only. It describes an approach to integrating sustainability risk into investment advice and does not constitute personal investment, legal or tax advice.

Sustainability terminology, classifications and disclosure requirements differ between jurisdictions and may change. References to concepts used in the European sustainable-finance framework do not mean that every rule applies to every SJB Global client, entity, service or product.

Before making an investment decision, clients should consider the relevant product documents, costs, risks, investment objectives and sustainability disclosures. Personal recommendations will depend on the client’s circumstances and the regulatory framework applicable to the service.

SJB Global/BFMI is a trading name of Blacktower Financial Management (International) Limited (“BFMI”). The financial advisers trading under SJB are members of Nexus Global, a division of BFMI. All approved members of Nexus Global are Appointed Representatives of BFMI. BFMI is licensed and regulated by the Gibraltar Financial Services Commission under licence number 3647.