Transparency requirements with regards to sustainability also apply at a product level. The pre-contractual information must indicate how sustainability risks are taken into account in investment decisions and within advice, how this affects the expected return or why they are not relevant.
If a sustainable product is offered, additional information requirements apply. Additional information about the sustainability of the i product must then be provided to prevent all kinds of investments from being incorrectly advertised as "green" or "sustainable" ("greenwashing").
Under the SFDR regulation there are different product categories:
- Financial products having sustainable objectives (article 9)
- Financial products promoting environmental or social characteristics as part of the broad investment strategy (article 8)
- Financial products that either consider ESG risks as part of the investment process or are explicitly declared as non-sustainable (article 6). There is a difference between products taken sustainability risk into account and those who do not.
For each product, the following information will be disclosed:
- a description of the environmental or social characteristics or the sustainable investment objective;
- the information on the methodologies used to assess, measure and monitor the environmental or social characteristics and the relevant sustainability indicators used to measure the environmental or social characteristics or the overall sustainable impact of the financial product.
The information regarding how sustainability risks are taken into account for each product that falls under the SFDR regulation, can be found in the ING Sustainability Risks Policy.