Article 4 Firm-level Disclosures

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Article 4 of SFDR requires managers (on a “comply or explain” basis) to publish on their websites a statement on the due diligence policies concerning principal adverse impacts of investment decisions on sustainability factors (the “PAI Statement”), taking into account the manager’s size, nature, scale of activities and the types of financial products they make available. The “explain” option is not available from 30 June 2021 to those managers with more than 500 employees during the financial year (or managers that are the parent undertaking of a group with more than 500 employees).

Where a manager does not consider principal adverse sustainability impacts, then a statement to that effect must be made with clear reasons as to why the manager does not do so, and whether it intends to do so in the future.

The PAI Statement requires both quantitative and qualitative disclosures, and applies to in-scope managers of all types of funds.


See also: Principal Adverse Impact indicator (PAI)


Kirkland & Ellis: Sustainable Finance Disclosure Regulation: Detailed Rules on Disclosures