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ESG Module

Regulatory backstory and setup instructions for the KYC Additional Module with ESG questions

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Written by Jeroen Cevaal
Updated over a week ago

To facilitate compliance with European regulations the KYC Suite offers sustainability preference questions as part of the onboarding process. The questions are available within the ESG module.

Note: To stay compliant with existing regulations, we strongly advise you to activate the module before August 2nd, 2022. Below you will find the instructions on how to configure the module and how to export the provided answers.

Contents

Context

In March 2018 the European Commission published its Action Plan ‘Financing Sustainable Growth’, setting up an ambitious and comprehensive strategy on sustainable finance. Following the publication of the Commission’s Action Plan, the MiFID II Delegated Regulation has been updated to integrate sustainability factors, risk and preferences into certain organisational requirements and operating conditions for investment firms. For more information, see the the Delegated Regulation of 21.4.2021.

As per August 2nd, 2022, investment firms are required to incorporate questions about the sustainability preferences of the client in the suitability test, which must be taken into account when compiling a portfolio or advice for the client.

About the ESG Module

The sustainability preference questions have been aligned with the MiFID II Delegated Regulation text and the draft ESMA guidelines. More details can be read in the document describing the Delegated Regulation of 21.4.2021. Since the ESMA guidelines are not yet final and the implementation is also connected with other sustainability laws, Blanco expects more clarity in the coming months, after which the questionnaire may need to be adjusted.

A new additional module has been set up with a survey and document template. By default, this module is turned off for every onboarding case. You can enable the ESG module in the settings of the KYC Suite.

How to set up the ESG module

Note: The questions in the ESG module are currently only available in Dutch.

The questions that will be asked during onboarding depend on whether ESG products are offered. If you offer your clients products that are considered ESG, we ask more specific questions to determine the end-client’s preferences.

By default, the selected option is no. This option will not ask your client any specific questions, instead the survey will ask whether your client is willing to continue knowing that you offer no such products. To facilitate your decision in the setup of this module, you can view a demo of the questions and possible answers.

  1. In the KYC Suite settings go to “Products” > “Additional modules”

  2. Here you see a list will all additional modules. Look for the ESG Module – By default the status is “Disabled” – To enable the ESG module, select Edit.

  3. Click on the “Status” toggle to enable the ESG module.

  4. Now select whether you offer ESG investment products by selecting Yes/No.

  5. Click the save button to store the changes.

If you want to use this module for all new onboarding cases, make sure to also select the “Default” box. A checked box indicates that the ESG survey will be added automatically for all new onboarding cases.

How to use the ESG module

After the ESG module is enabled, it can be used both in onboarding and the Client File similar to other Additional Modules.

For information regarding the use of additional modules in the Client file, we refer to this article.

The ESG module contains a survey for your client to fill in and a report, listing all the questions in this survey.

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