Inclusion of funds managed under discretionary mandates by subsidary but parent company not a bank

Criteria
1

Hi there,

The guidance allows banks’ to optionally include targets relating to asset management divisions. What is the guidance for an investment management company that invests its own funds through one subsidiary and manages funds under discretionary mandates through a separate subsidiary. Would the subsidiary that manages fund under discretionary mandates have to be included in science-based targets set by the parent company?

Thanks,

Kristina

2

Hi @KristinaBeadle,

Welcome to the community!
Yes, the subsidiaries also need to set targets if the investment management company in your example sets a target. All subsidiaries and divisions always have to be included in a target, provided the assets/activities are in scope (table 5.2, p. 55 in the guidance) when a company sets a target on the group level. The only exception to this rule is currently the one you mention for banks and their asset management operations, which is currently optional.

3

Hi @Donald ,

We are an Asset Management firm and currently defining our targets.
I’d like to take the opportunity to follow up on this conversation in connection with our current reflection on the inclusion of our dedicated funds and mandates.
Indeed, for these funds we almost never have a total freedom to make investment decisions insofar as the investment universe, SRI process, exclusion policy/filter or ESG data providers are imposed by the client.

In these conditions, can we consider these funds as optional and therefore not include them in our mandatory target boundary?

Thank you for your help,
Igor

4

Please see Table 1 and FI-C15 of the Financial Institutions Near-Term Criteria Version 2.0 for coverage requirements for asset/investment/wealth management activities.