Mandatory disclosures under Regulation of the European Parliament and of the Council on sustainability-related disclosures in the financial services sector (EU) 2019/2088 (“SFDR”)
The Sustainable Finance Disclosure Regulation requires financial market participants and/or financial advisors such as Blue Future Partners Sàrl and BFP-Q Management GmbH (“BFP”) to publish certain sustainability related information on their website. Unless specifically linked to a specific fund (of funds) product managed by BFP, the following disclosures refer to the sustainability policies and investment decision-making processes of BFP in general.
Policies on the integration of sustainability risks in investment decision-making processes (Article 3 SFDR)
“Sustainability risks” refer to 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. BFP has developed a proprietary sustainability framework, the Sustainable Future Framework (“SFF”) that incorporates such sustainability risk considerations into the manager selection and investment process, considering both the manager’s in-house operations as well as its investment business. The SFF Due Diligence approach ensures the adequate and systematic assessment of the relevant risk factors associated with a proposed investment and the adherence to the investment restrictions with respect to socially and ethically undesirable activities as defined for a specific fund product. Identified issues of concern need to be brought to the investment committee’s attention pre investment and an investment will not be pursued in case of a persistent red flag or if in aggregate the proposed investment does not meet the requirements of the SFF.
Principle adverse sustainability impact statement (Article 4 SFDR)
Article 4 SFDR aims to achieve transparency with regard to principal adverse impacts (“PAIs”) of investment decisions on sustainability factors, defined as environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters. BFP acts primarily as a fund of funds investor and has thus only limited influence on the reporting arrangements between its investee managers and the underlying companies. As a consequence, it cannot be foreseen whether the data capture requirements as specified in the Regulatory Technical Standards (RTS) can be met and at the current point in time BFP must assume to not be able to fully take into account and monitor the PAIs of its investment decisions as requested by Article 4. However, BFP seeks to engage with responsible managers that aim to create value and will indeed consider material adverse effects of their investment decisions. BFP will monitor developments with regard to available information and reporting practices to determine whether and when it will be reasonably possible in the future to fully implement the processes required by the Article 4 SFDR / RTS framework as it will be applicable at the time.
Disclosure of remuneration policies in relation to the integration of Sustainability Risks (Article 5 SFDR)
BFP pays staff a combination of fixed remuneration and variable remuneration (“bonus”). The bonus takes into account the achievement of individual and team objectives as well as compliance with all policies and procedures, including those related to the Sustainable Future Framework that guides the investment-decision making process as specified above.