Essentially, the point of the SFDR (Sustainable Finance Disclosure Regulation) is to help people make better investment decisions. In the SFDR, you will find three classifications for investment products: Articles 6, 8 and 9. But do you know what do these articles mean?
💡 Article 6 funds don’t meet the sustainability criteria to be classified higher. 👉 They aren’t very good or relevant.
💡 Article 8 funds promote environmental and social characteristics, but sustainability is not their core goal. 👉 They are okay but could be better.
💡 Article 9 is the highest-ranking and means the fund sets sustainable investing as its objective. 👉 That’s good!
At Grünfin, we entirely focus on sustainability and choose only Article 8 and 9 funds, of course preferring Article 9 where these rank high also based on and in combination with our other investment principles. You can read more about how we consider ESG and other criteria when selecting the ETFs here.
Remember: When you invest in a fund, the fund in turn usually invests in individual companies. Therefore, for an ETF to be highly rated under this regulation, it must invest in highly-rated companies.
The more money flows into sustainable funds, the more money flows into sustainable companies.