Δημοσιοποίηση των πληροφοριών για τη βιωσιμότητα – Ευρωπαϊκός Κανονισμός 2019/2088 (Στα Αγγλικά)
Statement of Principal Adverse Sustainability Impacts
Disclosure on the implementation of the requirements of Article 4 (1) of Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector regarding the transparency of adverse sustainability impacts at entity level
Table of Contents
1.1 Sustainability-related disclosures in the financial services sector 3
- Purpose of this policy. 4
- Policy review.. 4
- Principal adverse impacts – Regulatory framework & context 4
4.1 Principal adverse impacts – Context of the SFDR 4
4.1.1 Principal adverse impacts – Link with sustainability factors and sustainability indicators. 4
4.1.2 Principal adverse impacts – Link with sustainability risk. 5
4.2 Principal adverse impacts – Requirements of the SFDR relevant for this policy. 5
5.1 Principal adverse impacts – Organisational setup of the portfolio management function. 7
5.2 Principal adverse impacts – Scope of application and current inherent limitations 7
5.3 Principal adverse impacts – Identification and prioritisation of principal adverse impacts. 8
5.5 Principal adverse impacts – Engagement 9
1. Legal framework
Iolcus Investments S.A. A.I.F.M. (hereinafter “Company”) is an alternative investment fund manager established in Greece in accordance with Chapter II of the Directive 2011/61/EC (the “AIFM Directive”) and authorised and regulated by the Hellenic Capital Market Commission. Within the scope of its regulatory authorisation, the Company manages funds that qualify as alternative investment funds (“AIF”) and further provides portfolio management for segregated accounts and/or investment advice (hereinafter “products”).
1.1 Sustainability-related disclosures in the financial services sector
On 27 November 2019, Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosure requirements in the financial services sector (hereinafter “SFDR”) was published and entered into force on 10 March 2021.
The main objective of the SFDR is to create transparency on
- how sustainability risks are considered in the management of products; and
- if principal adverse impacts of investment decisions on sustainability factors (“comply or explain”) are considered in the management of products.
These transparency requirements apply in principle to both the Company and the managed products.
2. Purpose of this policy
This policy describes the Company’s decision with respect to the requirements of article 4 (1) SFDR regarding the consideration of principal adverse impacts (hereinafter “PAIs”) of investment decisions on sustainability factors.
The Company has chosen to consider principal adverse impacts of investment decisions on sustainability factors for the managed products that are pursuing a sustainable investment strategy respectively are allocating part of their portfolio in sustainable investments as defined in article 2 (17) SFDR.
3. Policy review
This policy will be reviewed and updated annually, and on an ad hoc basis in case of relevant changes to the organizational structure of the Company, in case of amendments to the regulatory framework governing this policy or if otherwise deemed necessary.
The Company expects to conclude its first review of this policy, before the Regulatory Technical Standards with regard to the content, methodologies and presentation of disclosures pursuant to article 2a (3), article 4 (6) and (7), article 8 (3), article 9 (5), article 10 (2) and article 11 (4) of the SFDR shall be applied.
4. Principal adverse impacts – Regulatory framework & context
4.1 Principal adverse impacts – Context of the SFDR
Principal adverse impacts are to be understood as those impacts of investment decisions that result in negative effects on sustainability factors (recital 20 of the SFDR). The SFDR is requiring both, the Company as well as the managed products, in article 4 (1) respectively 7 of the SFDR to decide if PAIs are to be considered.
There are no further clarifications or definitions to be found in the SFDR with respect to the concept of principal adverse impacts.[1]
4.1.1 Principal adverse impacts – Link with sustainability factors and sustainability indicators
According to article 2 (24) SFDR sustainability factors mean environmental, social and employee matters, respect for human rights, anti‐corruption and anti‐bribery matters. For each sustainability factor different underlying sustainability indicators can in principle be identified (e.g. carbon footprint, wage equality, compliance with the requirements of the General Data Protection Regulation, Regulation (EU) 2016/679).
The SFDR neither defines a mandatory list of sustainability indicators to be considered nor for which sustainability indicators principal adverse impacts are applicable.
The SFDR is establishing a link between the requirement to consider sustainability risks[2] in the investment decision-making process (article 3 SFDR) and the consideration of principal adverse impacts of investment decisions on sustainability factors (article 4 SFDR). Both concepts share the same core foundation, i.e. they commence with the identification and consideration of relevant sustainability indicators.
In general, the identification and consideration of relevant sustainability indicators are inter alia dependent on the investment strategy as well as the geographical and sectoral focus of the managed products. The monitoring of relevant sustainability indicators allows to establish a better and more informed understanding regarding the identification of (potential) sustainability risks. Further the assessment of certain sustainability indicators may be prioritised within the investment decision-making process to eliminate or at least mitigate sustainability risks.
4.2 Principal adverse impacts – Requirements of the SFDR relevant for this policy
The SFDR imposes as of 10 March 2021 transparency requirements only on the Company concerning the consideration of PAIs. The transparency requirements require that the Company explains how PAIs are considered at Company level. In case the Company complies with article 4 (1) of the SFDR no further disclosure for the managed products with respect to article 7 (2) SFDR is required.
| Summary of requirements | Level | Implementation | |
| Art. 4 (1) (a) | Publication on the website where the Company considers principal adverse impacts of investment decisions on sustainability factors and a statement on due diligence policies with respect to those impacts, taking due account of the Company’s size, the nature and scale of the Company’s activities and the types of financial products the Company make available. | Company
|
Description in this policy |
| Art. 4 (2) SFDR | In the publication made in accordance with article 4 (1) (a) SFDR the Company shall include at least the following:
a) information about the policies on the identification and prioritisation of principal adverse sustainability impacts and indicators; b) a description of the principal adverse sustainability impacts and of any actions in relation thereto taken or, where relevant, planned; c) brief summary of the engagement policy in accordance with Article 3g of the Shareholder Rights Directive II (Directive 2007/36/EC), where applicable; d) a reference to the adherence to responsible business conduct codes and internationally recognised standards for due diligence and reporting and, where relevant, the degree of the alignment with the objectives of the Paris Agreement. |
Company
|
Description in this policy |
5. Principal adverse impacts – Integration in the investment decision-making process
5.1 Principal adverse impacts – Organisational setup of the portfolio management function
The Company is responsible for exercising the portfolio management function for the managed products. The portfolio management function of the products can in principle be structured as follows:
- the portfolio management function is performed by the Company itself (with/without the involvement of an investment advisor);
- the portfolio management function is delegated to a qualified third party.
5.2 Principal adverse impacts – Scope of application and current inherent limitations
The Company, as detailed in section 2 considers principal adverse effects of investment decisions on sustainability factors.
The ability to consider principal adverse impacts depends substantially on the availability of relevant data and information for the invested assets. The availability, quality and saturation of relevant data and information for the systematic assessment of sustainability indicators and consideration of principal adverse impacts is for the time being not deemed adequate for all asset classes in which the managed products invest.
Therefore, the Company, where applicable, will initially focus its consideration of principal adverse impacts of investment decision on sustainability factors on managed products that purse as pre-contractually disclosed sustainable investment strategies and either qualify
- as article 9 funds under the SFDR (pursuing a sustainable investment strategy); or
- as article 8 funds under the SFDR and are allocating part of their portfolio in sustainable investments as defined in article 2 (17) SFDR.
The Company will regularly reassess the availability, quality and saturation of relevant data and information with the aim to expand the consideration of principal adverse impacts.
5.3 Principal adverse impacts – Identification and prioritisation of principal adverse impacts
As illustrated in sections 4.1.1 and 4.1.2, the identification and prioritisation of principal adverse impacts of investment decisions on sustainability factors require the consideration of various elements by the portfolio manager and are informed by:
| Elements (non-exhaustive) | Relevant considerations (non-exhaustive) | |
| Identification & prioritisation of principal adverse impacts | Regulatory minimum requirements | SFDR |
| EU Taxonomy Regulation (EU) 2020/852 | ||
| Investment strategy | Asset classes to be invested into | |
| Listed assets vs. unlisted assets | ||
| Geographical considerations regarding the assets | ||
| Industry sectors of the invested assets | ||
| SFDR classification | Qualification of the product under article 9 SFDR | |
| Qualification of the product under article 8 of the SFDR and allocation of part of the portfolio in sustainable investments as defined in article 2 (17) SFDR | ||
| Sustainability strategy (taking into consideration the investment strategy and SFDR classification) | Description of the sustainability strategy[3] | |
| Identification of relevant sustainability indicators to be considered in the investment decision-making process | ||
| Prioritisation of sustainability indicators that are essential to the delivery of the sustainability strategy | ||
| Definition of relevant limits for the relevant sustainability indicators | ||
| Definition of the binding elements of the sustainability strategy in the investment decision-making process | ||
| Quantitative or qualitative assessment of the relevant sustainability indicators | ||
| Disclosure | Integration in the pre-contractual and website disclosures (art. 8, 9, 10 SFDR) | |
For the identification and prioritisation of relevant sustainability indicators, the portfolio manager is considering different external sources (e.g. data provider, materiality map provided by the Sustainability Accounting Standards Board) during the investment management due diligence process. Based on this assessment, the relevant sustainability indicators that are identified as material for the delivery of the sustainability strategy are prioritised and in accordance with SFDR provisions reflected in the pre-contractual and website disclosures in accordance with article 8 and 9 SFDR respectively article 10 SFDR.
Relevant sustainability indicators[4] that can be taken into consideration may include greenhouse gas emissions, energy consumption for non-renewable sources, violations of the UN Global Compact principles, board gender diversity of investee companies or consideration of convictions and fines for violation of anti-corruption and anti-bribery laws.
5.4 Principal adverse impacts – Description of the principal adverse sustainability impacts and of any related actions taken or planned
The requirement to consider principal adverse impacts of investment decisions on sustainability factors applies from 10 March 2021. The collection of data and information starts as from 10 March 2021 and the related actions planned will be based on the results and assessment of the first full reporting period.
5.5 Principal adverse impacts – Engagement
The requirements of Directive 2007/36/EC (Shareholder Rights Directive II) are not applicable to the Company.
5.6 Principal adverse impacts – Adherence to responsible business conduct codes and internationally recognised standards for due diligence and reporting
The Company has been licensed and is regulated by the Hellenic Capital Markets Commission. The Company is subject to substantial regulatory provisions (EU, Greece, Hellenic Capital Markets Commission) that in detail address the requirements of business conduct, due diligence and reporting.
Sustainability Risk Policy
Disclosure on the implementation of the requirements of Article 3 of Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector regarding the transparency of integration of sustainability risks in the investments decision-making process
1. Legal framework
Iolcus Investments S.A. A.I.F.M. (hereinafter “Company”) is an alternative investment fund manager established in Greece in accordance with Chapter II of the Directive 2011/61/EC (the “AIFM Directive”) and authorised and regulated by the Hellenic Capital Market Commission.
Within the scope of its regulatory authorisation, the Company manages funds that qualify as alternative investment funds (“AIF”) and further provides portfolio management for segregated accounts and/or investment advice.
1.1 Relevant legislation
Regulation EU 2088/2019 on sustainability‐related disclosures in the financial services sector (“SFDR”)
On 27 November 2019, Regulation (EU) 2019/2088 of the European Parliament and of he Council of 27 November 2019 on sustainability-related disclosure requirements in the financial services sector (hereinafter “SFDR”) was published and entered into force on 10 March 2021. The main objective of the SFDR is to create transparency on
- how sustainability risks are considered in the management of products; and
- if principal adverse impacts of investment decisions on sustainability factors are considered in the management of products.
2. Purpose of this policy
This policy describes the Company’s decision with respect to the requirements of article 3 SFDR regarding the integration of sustainability risks in the investment decisions-making process. The Company has chosen to integrate the sustainability risks in the investment decisions-making process. The policy herein is part of the Company’s Investment Policy.
3. Policy review
This policy will be reviewed and updated annually, and on an ad hoc basis in case of relevant changes to the organizational structure of the Company, in case of amendments to the regulatory framework governing this policy or if otherwise deemed necessary.
4. Definitions
(In the meaning of Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector (“SFDR”).
Sustainability risk means an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the investment.
Sustainability factors mean environmental, social and employee matters, respect for human rights, anti‐corruption and anti‐bribery matters.
ESG factors, include (but are not limited to):
Environmental issues
Climate change, sustainable land use, waste management, reduction of greenhouse gas emissions, prevention of environmental risks
Social issues
Compliance with employment safety and health protection, employee rights, supply chain monitoring and consideration of interests of communities and social minorities.
Governance issues
Tax avoidance, executive pay, anti-corruption measures, Director nominations, Cyber Security
5. PRI Principles
The Company is signatory to the Principles for Responsible Investments (PRI). The six principles and the Company’s targets are listed below:
“1 We will incorporate Environmental, Social and Corporate Governance (ESG) issues into
investment analysis and decision-making processes.
2 We will be an active owner and to incorporate ESG issues into our ownership policies
and practices.
3 We will seek appropriate disclosure on ESG issues by the entities in which we invest.
4 We will promote acceptance and implementation of the Principles within the
investment industry.
5 We will work with the PRI Secretariat and other signatories to enhance their effectiveness in implementing the Principles.
6 We will report on our activities and progress towards implementing the Principles.”
6. Sustainability risk consideration-Investment Universe
The Company considers sustainability risks in its investment decisions besides the common financial analysis as well as the other portfolio specific risks. This consideration applies to the investment management process including the investment assessment and screening.
The investment universe gets shaped on the basis of a strategy of “ESG factor integration”.
The Company selects financial products based on the following criteria:
- An ESG score of “average” or “leader”
- Financial analysis criteria
ESG scores (which are provided by reliable third party data providers) show:
- the exposure of issuers of financial products to ESG risks that arise by the occurrence of events that impact the environment, society, and corporate governance.
- How effectively these issuers manage those risks compared to other peer corporations.
7. Governance
- Investment Committee and portfolio managers have the responsibility to implement the policy.
- Risk Management Policy: The Company has modified its risk management policy to identify and manage all risks including those linked to ESG factors.
- Conflict of interest: The Company acts according to the “Iolcus Conflict of Interest Policy.”
- Monitoring: There are on-going reviews regarding risk control and ESG metrics.
8. Awareness
The Company promotes awareness of sustainable and responsible investment among its staff members and to the public. This includes internal courses and presentations to the clients.
9. Voting Rights
The Company, where applicable, will use its voting rights to reinforce the sustainability targets.
Remuneration Policy
Disclosure on the implementation of the requirements of Article 5 of Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector regarding the transparency of remuneration policy in relation to the integration of sustainability risk.
1. Legal framework
Iolcus Investments S.A. A.I.F.M. (hereinafter “Company”) is an alternative investment fund manager established in Greece in accordance with Chapter II of the Directive 2011/61/EC (the “AIFM Directive”) and authorised and regulated by the Hellenic Capital Market Commission.
Within the scope of its regulatory authorisation, the Company manages funds that qualify as alternative investment funds (“AIF”) and further provides portfolio management for segregated accounts and/or investment advice (hereinafter “Funds”).
1.1 Relevant legislation
- HCMC Decision 28/606/22.12.2011
- Law 4209/2013 (article 13)
- ESMA Guidelines _03.07.2013
- Regulation EU 2088/2019 on sustainability‐related disclosures in the financial services sector (“SFDR”)
On 27 November 2019, Regulation (EU) 2019/2088 of the European Parliament and of he Council of 27 November 2019 on sustainability-related disclosure requirements in the financial services sector (hereinafter “SFDR”) was published and entered into force on 10 March 2021. The main objective of the SFDR is to create transparency on
- how sustainability risks are considered in the management of products; and
- if principal adverse impacts of investment decisions on sustainability factors are considered in the management of products.
2. Purpose of this policy
This Remuneration Policy aims to establish the guidelines according to which the Company determines the pay of its employees whose activities have a material impact on the Company’s risk profile.
3. Policy review
The Company’s Board of Directors establishes, is responsible for, and periodically assesses the Remuneration Policy according to the existing regulatory framework, and with regard to the size, the internal organization, the nature and complexity of the Company’s activities.
An important parameter in the implementation of the Remuneration Policy is proportionality. The company does not have a complex structure and its activities and size allow for a relative flexibility with regard to the Remuneration Policy.
The Company reviewed the Remuneration Policy in relation to the integration of sustainability risks.
4. Definitions
(In the meaning of Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector (“SFDR”).
Sustainability risk means an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the investment.
Sustainability factors mean environmental, social and employee matters, respect for human rights, anti‐corruption and anti‐bribery matters.
5. Application of this policy
The employees whose activities have an essential impact on the company’s risk profile are:
I. Executive members of the BoD.
II. Managerial personnel
III. Persons carrying out control tasks
IV. Portfolio managers
6. Structure of this policy
6.1 Type of Remuneration
Remuneration is defined as pay and provisions of any kind that is received by the staff, directly or indirectly, in return for the professional services provided by them, whether they are employees or not, such as wages, optional retirement provisions, variable remuneration or provisions that are dependent on the performance of the worker or by contractual terms, guaranteed variable remuneration and payments related to a unilateral termination of a contract. This remuneration can consist of cash payments, AIF shares, shares of the Company, as well as other elements of additional provisions, such as health insurance coverage, discounts, use of vehicles or cellular phones, etc.
The remuneration can be constant, such as pay and provisions which are not connected to the performance of the staff, or variable, such as additional pay or provisions that are dependent on the staff’s performance or on contractual terms.
The ancillary payments or provisions which are provided indiscriminately to the staff are a part of the general policy of the Company and are not included in variable remuneration.
6.2 Risk Management
- There are no incentives provided for the assumption of excessive risk, nor is the assumption of risk beyond the Company’s strategy rewarded.
- Remuneration practices are in accordance with the business strategy, the goals, the values and the long-term interests of the Company and discourage conflicts of interest.
- Remuneration practices do not encourage the assumption of risk that is incompatible to the Funds’ risk profile.
- Remuneration practices do not encourage the assumption of sustainability risks. The sustainability risks are integrated into the investment decision process of the Company, (Sustainability Risk Policy). The Company makes the management decisions taking into account the risks arising from sustainability factors. The Company considers sustainability risks in their investment decisions beside the common financial analysis and along with the other, portfolio-specific, risks.
6.3 Contractual obligations
The Company ought to adjust its contractual obligations to the staff in order to ensure compliance with this Policy.
6.4 Staff that has been assigned control tasks
The staff that are assigned with control tasks, are remunerated on the basis of the achievement of the goals that are connected with their duties, independent of the business sectors that they control. The pay of the staff in the functions of risk management, regulatory compliance and internal control, are under the direct oversight of the BoD.
6.5 Adjustment of variable remuneration on the basis of risk
- The Company defines the appropriate ratio between fixed and variable remuneration. Fixed pay represents a rather high proportion of the total pay, so as to make possible the application of a fully flexible policy on variable remuneration, including the possibility of not making those payments.
- Guaranteed variable remuneration is not allowed. In exceptional circumstances they are allowed, only in the cases of the hiring of new personnel and are limited to the first year of their work at the Company.
- The sum of variable remuneration does not limit the ability of the Company to strengthen its own funds. The Company suspends in total or in part the payment of supplementary pay when specific indexes are not satisfied in full or when its financial situation is significantly worsened, especially in the cases where the smooth continuation of its operations is rendered uncertain. In these cases, without prejudice to the general principles of the national labour law, including its provisions on employment contracts, the Company has the ability to demand the return of a payment already made, if, after the payment has been made, it is proven that the rewarded performance was the result of illegal practices.
- Variable remuneration is never paid through methods or mechanisms that do not complied with this Policy.
- The staff is obligated to not use personal risk hedging strategies or insurance connected with payments or responsibilities with violate the included herein risk alignment mechanisms.
- Payments connected to the premature termination of the contract reflect the performance achieved over time and are designed is such a way as to avoid rewarding failures.
- Retirement policy is in accordance with the business strategy, the goals, values, and long-term interests of the Company and the Funds it manages.
- The remuneration does not encourage excessive risk‐taking with respect to sustainability risks and is linked to risk‐adjusted performance.
- Variable remuneration can take the form of money, shares in AIFs or equity, when conditions are such that such moves are allowed and always in accordance with the provisions of Law 4209/2000 and the principle of proportionality. The financial instruments of this clause are subject to an appropriate retention policy, with the aim of aligning the incentives to the interests of the Company, the Funds it manages and the investors.
- The payment of a significant part, and in any case of at least forty percent (40%) of variable remuneration is deferred for a period that is appropriate to the AIF’s share redemption policy and properly aligned with the nature of the risks of the AIF. This period referring to this current case is between three (3) and five (5) years, unless the lifecycle of the AIF in question is shorter. Remuneration payable that has been deferred shall vest no faster than on a pro-rata basis to the end of the deferral period. In the case of variable remuneration of a particularly high sum, the payment of at least sixty percent (60%) is deferred. The Company can take into account the principle of proportionality in the application of this paragraph.
6.6 Performance measurement
- In the case where remuneration is connected to performance, the total sum of provisions is based on a combination of assessing the performance of an individual, the function to which they belong and the total results of the Company. In the process of the assessment both financial and qualitative criteria are taken into account. Indicatively, qualitative criteria include, but are not limited to professional qualifications, professional development, the degree of compliance of the person remunerated to the processes of the Company, the level of management of the sustainability risk.
- The measurement of performance used to calculate variable remuneration components or pools of variable remuneration components includes an adjustment for all types of current and future risks and takes into account the cost of the capital and the liquidity required
- the assessment of the performance is set in a multi-year framework in order to ensure that the assessment process is based on longer-term performance and that the actual payment of performance-based components of remuneration is spread over a period which takes account of the share redemption policies of the AIFs, the underlying business cycle of the Company and its business risk.
7. Publication
The following are included in the AIF Annual Report:
- The total sum of remunerations for the financial year, distinguishing between fixed and variable remuneration that the Company is required to pay, as well as the number of beneficiaries, as well as any contribution to the added return that is to be paid by the AIF.
- The total sum of remunerations received by managerial staff, and the total sum of remunerations of staff whose actions have a material impact on the risk profile.
[1] Further clarifications will be provided by the Regulatory Technical Standards with regard to the content, methodologies and presentation of disclosures pursuant to article 2a (3), article 4 (6) and (7), article 8 (3), article 9 (5), article 10 (2) and article 11 (4) of the SFDR. These Regulatory Technical Standards are expected to be applied as from 1 January 2022.
[2] Article 2 (22) of the SFDR defines sustainability risk as an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the investment.
[3] i.e. focus of the strategy on defined environmental and/or social aspects provided that good governance practices are adhered to.
[4] Legally required considerations such as exclusion of companies associated with cluster munitions are per default considered.