Status under EU Regulation 2019/2088 Sustainable Finance Disclosure Regulation (“SFDR”)
The SFDR requires PGIM Wadhwani LLP (“PGIM Wadhwani”) to determine, on a product-by-product basis, whether sustainability risks are relevant to the Investment Manager’s in-scope financial products (the “Products”).
For the purposes of SFDR, “sustainability risk” means an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of an investment.
PGIM Wadhwani has determined that sustainability risks are not relevant to the Products on the basis that in light of their investment strategies, and in particular in light of the algorithmic /quantitative strategy employed PGIM Wadhwani on behalf of the Products, PGIM Wadhwani considers that environmental, social or governance events or conditions are unlikely to cause a material negative effect on the returns of the Products.
Consequently, PGIM Wadhwani does not integrate sustainability risks into its investment decision making for the Products, and has not assessed the likely impacts of sustainability risks on the returns of the Products.
No consideration of adverse impacts
The Sustainable Finance Disclosure Regulation requires PGIM Wadhwani to disclose whether, and if so how, it considers the principal adverse impacts (“PAIs”) of its investment decisions on sustainability factors, in accordance with a specific regime outlined in SFDR. PGIM Wadhwani does not currently consider the principal adverse impacts of its investment decisions on sustainability factors.
PGIM Wadhwani has carefully evaluated the requirements of the PAI regime in Article 4 SFDR, and in the Regulatory Technical Standards (the “PAI regime”). PGIM Wadhwani considers that its primary investment strategies and client relationships do not support adoption of the PAI regime within SFDR. Certain of the PGIM Wadhwani’s products involve investment strategies where it is not possible to conduct detailed diligence on the principal adverse impacts of PGIM Wadhwani’s investment decisions on sustainability factors, including algorithmic or quantitative trading and macro strategies.
PGIM Wadhwani will keep its decision not to comply with the PAI regime under regular review, and will formally re-evaluate the decision at least annually.