For the purpose of the disclosure of principal adverse impacts under Article 4(5)(a) of Regulation (EU) 2019/208, when a financial adviser recommends financial products or instruments that are not col

Article 4(5) of Regulation (EU) 2019/2088 (SFDR) requires financial advisers to disclose whether they consider in their investment or insurance advice the principal adverse impacts on sustainability factors, and, if not, why not and, where relevant, whether and when they intend to do so. The underlying objective of that provision is to encourage financial advisers to provide financial advice that addresses reduction of negative externalities on sustainability caused by investments of end investors. This should, in turn, result in more investments in activities that do not harm environment or social justice, curb greenhouse gas emissions, stimulate investee companies to transition away from unsustainable activities and reduce their negative environmental impacts, or even induce portfolio adjustments and divestment from activities that are harmful to sustainability. 24 Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (OJ L 173, 12.6.2014, p. 349). The disclosure requirements set-out in Article 4(5) of Regulation 2019/2088 distinguish between, on the one hand, investment advice or insurance advice on financial products and, on the other hand, investment advice or insurance advice in general: • the disclosure requirement enshrined in Article 4(5), point (a), SFDR is restricted to financial products as defined in Article 2, point (12), of the Regulation, and • the disclosure requirement enshrined in Article 4(5), point (b), SFDR is not restricted to financial products as defined in Article 2, point (12), of the Regulation. Therefore, where an investment firm or a credit institution provides investment advice on financial instruments (other than financial products) within the meaning of Article 2, point (15), of Directive 2014/65/EU the information provided under Article 4(5), point (b), SFDR must relate to all financial instruments.