ESG

Since 10 March 2021, Regulation 2019/2088 on the provision of information on sustainable investments (SFDR) has been in force. ESG stands for Environmental, Social and Governance and refers to the three central factors in measuring the sustainability of an investment. The regulation requires financial firms, including EValuation Capital Management (“we”), to provide certain information about ESG.

Sustainability risks in investment decisions

A sustainability risk is the risk that an investment will lose value as a result of a sustainability event or circumstance. Examples include climate change, involvement in child labor or scarcity of raw materials. Such events and circumstances may have an adverse effect on the value of investments. For example, scarcity of raw materials can lead to certain companies producing less, which can cause shares in these companies to decline in value.

The potential impact of sustainability risks is assessed in the same way as all other fund risks, such as concentration risk. For each identified risk, including sustainability risks, it is determined whether the risk is applicable. Control measures are then determined if the risks are too high. These control measures must limit the chance of the risk occurring and/or reduce the impact that arises when the risk occurs.

Adverse effect of investment decisions on sustainability factors

Sustainability factors are environmental, social and employment issues, respect for human rights, and the fight against corruption and bribery. We currently do not include adverse effects of investment decisions on entity-level sustainability factors. The reason for this is that we manage different funds, each with their own investment strategy. For that reason, it is not currently possible for us to include entity-level adverse effects. We determine for all our funds whether and, if so, which adverse effects we include in our investment policy at fund level. In the prospectuses of the various funds, it is explained whether or not unfavorable effects on sustainability factors are included. If we move to one entity-level sustainability strategy, it will reconsider whether to include entity-level adverse impacts.

Sustainability risks in relation to the remuneration policy

Our website (https://www.evaluationcapital.com/wp-content/uploads/2021/08/Beloningsbeleid-ECM-aug2023.pdf) contains a summary of our remuneration policy. This remuneration policy is in line with our strategy, risk appetite, objectives and values. The remuneration policy is aimed at ensuring that the remuneration of employees does not lead to undesirable (sustainability) risks or behaviour. For this reason, our employees only receive a fixed monthly remuneration and are not entitled to a variable remuneration.