ESG / SFDR Section
As a Collective Investment Scheme, the Company falls under Regulation (EU) 2019/2088, also known
as the Sustainable Finance Disclosure Regulation (SFDR), which mandates sustainability-related
disclosures in the financial services sector. SFDR compels asset managers to reveal the differing levels
of sustainability integration that an investment strategy contains.
The regulation aims to create a more transparent playing field, partly to prevent greenwashing – where
some financial firms claim that their products are sustainable when they are not. Under such regulation,
a strategy will be labeled under either Article 6, 8 or 9 of the SFDR:
• Article 6 refers to financial products which do not integrate any kind of sustainability into
the investment process and which deem sustainability risks not to be relevant for their
investment strategy;
• Article 8 refers to financial products that promote, among other characteristics,
environmental or social characteristics, or a combination of those characteristics, provided
that the companies in which the investments are made follow good governance practices;
and
• Article 9 refers to financial products that have sustainable investment as their objective.
Responsible Investment Practices
Whilst it is the Company’s policy to invest in legitimate and recognised assets within reputable
jurisdictions, pursuant to SFDR, the Sub-fund does not promote any environmental, social and
governance (“ESG”) characteristics as the portfolio selection process follows a strategy based on
economic conditions and market forecasts which do not take ESG factors into account and therefore it
does not invest in any securities with embedded ESG criteria. Moreover, the Sub-fund does not have a
sustainable investment objective pursuant to SFDR. Therefore, the Sub-Fund falls under the scope of
Article 6 and thus it is not subject either to the article 8 or to the article 9 of SFDR.
We neither promote nor designate sustainability-related characteristics to our investors or benchmarks.
Negative and Positive Screening
We may engage with our clients to understand concerns about specific activities or industries for
potential exclusion from investments. We may consider screening target entities or products consistent
with ESG Factors and recommend or invest in such products where possible.
Principle Adverse Impacts
We do not assess the Principle Adverse Impacts (PAIs) of our decisions on ESG Factors, as these
impacts do not influence our investment process, and due to the lack of available and reliable data.
Sustainability Risks
As a ‘financial market participant’, the Company has performed a sustainability risk assessment to
firstly determine the relevance of sustainability risks in respect of the Sub-Fund. In this regard, we2
consider sustainability risks not to be directly relevant to our operations, a position reflected in our
Offering Documentation.
Alignment of Internal Remuneration Framework with Sustainability Investments
Variable remuneration is not paid to staff unless justified based on performance assessment
incorporating both financial and non-financial criteria. We believe our existing structures are sufficient
to prevent excessive risk-taking regarding sustainability risks, if any.
Taxonomy Regulation disclosure
The Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment
(the Taxonomy Regulation) sets criteria to determine which economic activities qualify as
environmentally sustainable at Union level. As such, an economic activity shall qualify as
environmentally sustainable where that economic activity contributes substantially to one or more of
the six environmental objectives defined by the Taxonomy Regulation (climate change mitigation;
climate change adaptation; sustainable use and protection of water and marine resources; transition to
a circular economy; pollution prevention and control and protection and restoration of biodiversity and
ecosystems).
In addition, such economic activity shall not significantly harm any such environmental objectives (“do
not significantly harm” principle) and shall be carried out in compliance with the minimum safeguards
laid down in article 18 of the Taxonomy Regulation.
In accordance with article 7 of the Taxonomy Regulation, the Company draws the attention of investors
to the fact that the investments underlying this Sub-fund do not take into account the European Union
criteria for environmentally sustainable economic activities.
For further information please refer to the website of the Investment Manager, Audentia Capital
Management Ltd: https://audentiacapital.eu/sustainability-related-disclosures/