Sustainable finance regulation
Sustainable Finance Disclosure Regulation
The Sustainable Finance Disclosure Regulation (SFDR) aims to increase transparency on how financial market participants integrate sustainability risks and opportunities into their investment decisions. It also introduces a classification system with new disclosure requirements for investment products. At NN, we support this.
The result of the SFDR will be transparency via disclosures on websites of our entities and in certain product documents to enable customers, investors and other stakeholders to compare different products with respect to their ESG risks and sustainable investment objectives.
The expected timelines will run from 10 March 2021 until the end of 2022 (considering the links of SFDR with other sustainable finance regulations) meaning that our entities, will continue to implement and provide more transparency in the years to come.
In addition to the integration of sustainability risks in NN Group's Responsible Investment Framework policy (download below), these risk are also integrated in our remuneration policy.
NN Group aims to create long-term value for all its stakeholders. We aim to achieve this among others by including ESG factors in the way we set internal objectives and reward our management and employees.
Principles for remuneration within NN Group are reflected in NN Group’s Remuneration Framework (“Framework”), which generally applies to all majority owned entities within the Group and is approved by the NN Group Supervisory Board. The Framework is aligned with NN Group's business strategy, objectives, values and risk appetite and supports the creation of long-term value for all our stakeholders.
Following the Framework, performance management is based on a number of financial and non-financial performance objectives. This is balanced in such a way that the financial performance objectives cannot exceed 50%. These objectives focus on robust and effective risk management, as well as balanced risk taking. The latter covers all types of risks, including ESG-related risks.
Within NN Group, the non-financial performance objectives focus among others on balanced risk taking as part of the ‘sustainable control environment’ and a ‘positive contribution to society’ following NN Group’s ambition in this area as communicated on Capital Markets Day 2020. These objectives include customer and employee engagement, percentage of women in senior management positions and percentage of ESG-integrated Assets under Management.
Performance is reviewed via regular check-ins and the annual year-end review by the manager of the employee. For the Executive Board this is driven by the NN Group Supervisory Board. For more information, refer to the Remuneration report included in NN Group’s Financial Report.