What is ESG?
ESG is often used interchangeably with the term “sustainable investing.” ESG data is most often categorised as “non-accounting” information because it captures components important for valuations that are not traditionally reported.
Covers themes such as climate risks, natural resources scarcity, pollution and waste, and environmental opportunities.
Includes labour issues and product liability, risks such as data security, and stakeholder opposition.
Encompasses items relating to corporate governance and behaviour such as board quality and effectiveness.
The Fund defines ESG integration as the practice of incorporating material environmental, social, and governance data and insights into investment decisionmaking, alongside traditional financial information, with the objective of improving
the long-term financial and ESG outcomes of its portfolios.
Fund’s ESG Classification
The Fund complies with the demands of the European Sustainable Finance Disclosure Regulation (EU) 2019/2088 to be categorised as an ‘Article 8’ Sustainable Fund.
ESG and Remuneration (Art 5, SFDR)
The Fund has remuneration policies which are aligned with and promote sound and effective risk management, and discourage excessive risk taking. These remuneration policies have been updated to integrate sustainability risk.
Adverse sustainability impacts (Art 4, SFDR)
The identification and prioritisation of principal adverse sustainability impacts may vary from investment to investment due to the variety of activities covered by the fund objective (from viticulture to wine-making, bottling, distribution etc.)
Identification is typically expected to occur at due diligence stage via the completion and assessment of an internally developed ESG Due Diligence Questionnaire.
ESG indicators are not well-established yet, but the Fund will continue to seek
Engagement policy (Art. 3g, Directive 2007/36/EC)
Typically, the Fund aims for 100% takeover, but in the event that this is not possible, we will monitor investee companies on relevant matters and manage actual and potential conflicts of interests in relation to their engagement like for example “greenwashing”.
Adherence to responsible business conduct codes and internationally recognised standards for due diligence and reporting (Art 4. SFDR)
Being an authorised investment fund, the Fund will endeavour to follow industry and other relevant guidelines and business conduct codes for due diligence and reporting. Typically, these are designed to mitigate risk. The Fund relies on the fund manager as the regulated AIFM to assist with these matters.
Alignment with the objectives of the Paris Agreement (Art 4. SFDR)
The Paris Agreement is a legally binding international treaty on climate change. It is in the interests of the fund, the investors and all stakeholders for the Fund to align its activities with the objectives of the Paris Agreement.
The Fund is committed to putting sustainability at the centre of its investment process, based on the belief that sustainability risk, including climate risk, is investment risk, and that sustainability-integrated portfolios provide the best
opportunity for performance over the long term.
Those companies that are deemed to be in severe and systemic breach of certain principles are excluded from the Company’s investment screens.
Due Diligence and Reporting
The Fund works closely with the external portfolio manager to efficiently incorporate ESG alongside financial factors in the investment decision process and to promote active engagement, collaboration, transparent disclosure and reporting.
What is the SFDR?
The Sustainable Finance Disclosure Regulation (SFDR) imposes mandatory ESG disclosure obligations for asset managers and other financial markets participants with substantive provisions of the regulation effective from 10 March 2021. The
SFDR was introduced by the European Commission alongside the Taxonomy Regulation and the Low Carbon Benchmarks Regulation as part of a package of legislative measures arising from the European Commission’s Action Plan on Sustainable Finance. The SFDR aims to bring a level playing field for financial market participants and financial advisers on transparency in relation to sustainability risks, the consideration of adverse sustainability impacts in their
investment processes and the provision of sustainability related information with respect to financial products. The SFDR requires asset managers such as AIFMs and UCITS managers to provide prescript and standardised disclosures on how ESG
factors are integrated at both an entity and product level. A significant portion of the SFDR applies to all asset managers, whether or not they have an express ESG or sustainability focus.
Please refer to the Fund´s Private Placement Memorandum for full details on the
Fund´s ESG policy.