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European Legal Disclosures


This Sustainable Risk Integration Policy (Policy) provides an overview of the approach to sustainability risk taken by Cohen & Company Financial Europe Limited (CCFEL). Under Article 3 of the Sustainable Finance Disclosure Regulation (SFDR), we are required to describe the manner in which sustainability risks are integrated into our investment decision-making processes.

Sustainability risk is an environmental, social or governance (ESG) event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the investment.

CCFEL believes that ESG factors can potentially have a material impact on an issuer’s long-term financial performance. Given the limited upside (and potentially significant downside) of fixed income investments, the focus of our ESG analysis is on understanding downside risks.

Poorly managed ESG risks can lead to inefficiencies, operational disruption, litigation and reputational damage, which may ultimately impact an issuer’s ability to meet their financial responsibilities. Supplementing traditional financial analysis by reviewing ESG-related management practices and performance is therefore not only prudent but also in line with CCFEL’s fiduciary duty to optimise investor returns.

CCFEL primarily applies an ESG integration strategy that involves the identification and assessment of investment material ESG factors. While this does not lead to the automatic exclusion of issuers from investment on ESG grounds, it ensures that CCFEL’s analysts are able to provide relevant information on the key ESG risks in their credit reports. As such, ESG factors are an input into CCFEL’s investment process, but they are not necessarily the key determinant in the final investment decision-making process, which ultimately reflects the view of an investment’s risk-return profile.

CCFEL believes that providers of debt do have a role in engaging with issuers on matters with the potential to impact investment returns. Given CCFEL’s approach of not automatically excluding issuers from investment based on their ESG performance, actions to mitigate such risks are raised with investments teams where appropriate. However, client expectations of the scale and effectiveness of such engagement should be made in recognition of the fact that as debt investors, we are not owners and as such have more limited legal mechanisms to influence issuers.

During 2019 the firm’s parent Cohen & Company LLC initiated efforts to more systematically incorporate them into the process. Cohen & Company LLC became a signatory of the United Nations (UN)-supported Principles for Responsible Investments (PRI) in Jan 2019, a global voluntary initiative focused on the investment industry, whose signatories have committed to integrating ESG factors into investment processes.

In line with the PRI, ESG risks involve non-financial aspects to an issuer’s operations which may affect its ability to meet its financial commitments. ESG risks and opportunities vary by country and industry and may have a bearing in a number of ways. Examples of ESG risks that can be exposed include the following:

Regulatory Risks

  • Changes to regulation (e.g., laws on environmental pollution, waste management, company law, governance codes)
  • Laws surrounding access to raw materials and/or land use directly affect unprepared firms

Reputational Risks

  • The threat of litigation (e.g. unsafe products or services)
  • Fines and negative press


  • Lack of appropriate board oversight and decision-making structures can undermine investor confidence in management.


CCFEL has adopted an ESG Investment policy:

Responsible Investment Policy 


This statement on Principal Adverse Impacts (Statement) provides and explanation of how, and the extent to which, CCFEL considers principal adverse impacts of investment decisions on sustainability factors.

Under Article 4 of the Sustainable Finance Disclosure Regulation (SFDR) we are required to publish and maintain a statement on our website explaining our approach to consideration the principal adverse impacts of investment decisions on sustainability factors. “Adverse impacts” are the negative effects that investment decisions might have on environmental, social or governance factors (sustainability factors).

As at the date of this Statement, the final Level 2 Regulatory Technical Standards of SFDR (the RTS), which include the detailed disclosure requirements, have not yet been adopted. The RTS require extensive reporting of detailed impact metrics on specific sustainability factors. CCFEL considers the ability to review and consider these factors is constrained by the lack of available data from underlying investee companies and the investment management industry generally is working towards finding solutions to this in advance of the RTS entering into force.

In addition, the firm manages funds on an advisory basis with investments made in long dated subordinated debt of insurance companies and collateralized loan obligations, in which the underlying collateral is not at the firm’s discretion and can change over the course of the investment.

Accordingly, CCFEL’s does not take into account the principal adverse impact of its investment decisions with consideration of sustainability factors


The Shareholders Rights Directive II (SRD II) requires CCFEL to make a public disclosure in relation to the nature of its commitment to the directive. The SRD II aims to promote shareholder engagement and to improve stewardship practices across the European Union. This directive is applied on a “comply or explain” basis and so, CCFEL is required to explain why it does not consider it appropriate to comply.

As mentioned above CCFEL manages funds on an advisory basis with investments made in long dated subordinated debt of insurance companies and collateralized loan obligations. Furthermore, we do not currently invest in shares traded on a regulated market and if we did, our approach to shareholder engagement would be determined on a case by case basis and be integrated within each investment made. On this basis, CCFEL believes it is inappropriate to specify how it will engage with shareholders within an overarching engagement policy.

Should this situation change, CCFEL will review its commitment to the SRD II and make the appropriate disclosure.

This link leads to the machine-readable files that are made available in response to the federal Transparency in Coverage Rule and includes negotiated service rates and out-of-network allowed amounts between health plans and healthcare providers. The machine readable files are formatted to allow researchers, regulators, and application developers to more easily access and analyze data.

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