TRANSPARENCY OF SUSTAINABILITY RISK POLICIES
The Sustainable Finance Disclosure Regulation (EU) 2019/2088 (hereinafter the "SFDR Regulation" or "SFDR") imposes transparency obligations on financial industry participants, including management companies, regarding sustainability risks. The degree of disclosure that must be given to investors also depends on whether the financial product promotes, among other features, environmental or social characteristics, or a combination of such characteristics (Article 8 SFDR) or has sustainable investments as an objective (Article 9 SFDR), with a different impact on the investment process. To provide such disclosure, fund managers must assess the sustainability risk inherent in their investments and the possible negative impact of such risk on their investments, and, to that end, must first supplement their investment policies with policies designed to assess and measure on an ongoing basis the status of sustainability factors in their investment targets, as well as their monitoring and management. 'Sustainability risk' is defined as an environmental, social or governance event or condition that, if it occurs, could cause a significant negative impact on the value of the investment. 8a+ SICAV S.A. and the Management Company 8a+ Investimenti SGR S.p.A. (hereinafter collectively the "Companies") are aware that managing risks and opportunities related to Environmental, Social, Governance (ESG) issues and integrating related factors into the investment process supports value creation and growth in the medium to long term. The objective of the companies is to adopt an approach focused on social and environmental responsibility, creating value for all stakeholders: investors, financed and/or participated companies as well as for the communities in which they are inserted. The Companies invest in the well-being and professional growth of the people who are part of the Companies, ensuring a working environment that favours professional growth and the ability to attract and retain new talent. It should be pointed out that at present sustainability risks, being only one of the types of risk factors taken into consideration by the Companies, do not directly affect the remuneration and incentive policies and practices (including the mechanisms for determining the variable component or the ex-post adjustment mechanisms such as claw backs and maluses) adopted. In addition, The Management Company's objectives include acting responsibly and promoting sustainability in the financial sector and becoming, among other things, a signatory to the UN PRI, and adopting a responsible approach to investing in order to create value and increase industry awareness of the benefits of leveraging ESG issues. With this strategy, Companies intend to contribute to the achievement of certain United Nations Sustainable Development Goals (UN SDGs or Agenda 2030), selected on the basis of the impact that Companies, through their business, can have. Through the definition of a sustainability strategy, the Companies are committed to integrating ESG issues at all operational levels, both in the Companies and in the products established and managed by them. As a responsible investor, the Companies have defined, for certain products, a "list of exclusions" within the investment policy, which may be extended to additional activities identified by the Companies and/or product underwriters and/or potential investors. The responsible approach to investment is reflected in all stages of the investment process and in the process of creating new products. In the light of the above-mentioned regulations, the Companies have therefore classified the UCITs set up, currently managed by the Management Company 8a+ Investimenti SGR S.p.A., according to the provisions of article 6.1 of SFDR. From this analysis the sub-funds are divided as follows:
1. Products with the characteristics set forth in Article 8 SFDR ("ESG Products"); 2. Products that primarily take into consideration criteria other than ESG criteria, but which may nevertheless be impacted by them; 3. Other products that do not consider factors linked to sustainability;
For each type of product there is a different integration of sustainability risks in the investment decision-making process. Depending on the type of product, the Management Company has adopted different policies, also in order to identify the main negative effects of investment decisions on sustainability risks. The following is a brief analysis in this regard. 1. The Companies intend to start up a new sub-fund called 8a+ SICAV Etica during the current year, subject to completion of the authorization process underway. The Ethics sub-fund aims to generate a moderate growth of the invested capital, promoting at the same time the core values of the Catholic Church and the instances of sustainability. Under the first profile, an exclusion grid oversees the investment in sectors, activities and productions considered harmful to human dignity according to the canons of the Catholic Church. On the other hand, the promotion of good practices linked to environmental, social and good governance issues of economic organizations is entrusted to a careful policy of selection of issuers that must comply with sustainability rating levels above a certain threshold. The ESG ratings of specialized providers are used. Finally, with the aim of carefully monitoring the risk of serious controversies also for issuers that have exceeded both the exclusion grid and the rating limit, the specific ESG Controversies methodology of specialized independent research providers is applied. These exclusions indirectly support certain United Nations Sustainable Development Goals.
The management of the Ethics Subfund is entrusted to a Delegated Manager. The Management Company will exercise controls over the compliance of the activity carried out by the Delegate with respect to the stated promotion objectives in the following manner. In particular, the Management Company receives from the Delegated Manager the Investment Universe and Sustainability Report and verifies that the portfolio is composed exclusively of securities included in the investable universe defined on the basis of the exclusion criteria and the minimum ESG rating standards and ESG Controversies established. The Management Company carries out specific checks on individual issuers included in the portfolio, requesting from the Investment Manager the documents supporting the choices made. In addition, the Management Company avails itself of an independent non-financial research provider which provides the information necessary to carry out a second level check on the consistency of the Investment Universe with the promotion criteria and to verify the reasons for the choice illustrated by the Investment Manager. 2. For all products falling under this point 2, the Management Company has provided, in support of the Investment Area, a Sustainability Report so that it can eventually consider sustainability factors in its investment choices. In particular, after classifying the assets making up the portfolio of each sub-fund into three bands on the basis of a rating provided by a provider specialized in ESG issues, it will be possible to assess the distribution of investments in the bands, create an overall rating for the portfolio calculated by weighting the individual ESG (Environmental, Social, Governance) factors of each individual investment and finally highlight any exposure to controversy. The instruments belonging to the lowest band will also be subject to a specific risk/return analysis in order to assess the impact of sustainability risks on the return of the funds pursuant to the SFDR. 3. For the products referred to in this point 3, sustainability-related factors are not taken into account as they have a strategy that adopts exclusively a quantitative model that does not consider any ESG factors. For the products referred to in this point 3, factors linked to sustainability are not taken into consideration because their nature, characteristics, target investments or management model do not allow for their applicability. In particular, funds that have an investment strategy that adopts quantitative management models and that invest in assets for which it is not currently possible to apply ESG factors (e.g. funds that invest in instruments that replicate indices and/or in other funds on a global level) fall into this category. The following table shows the products set up/managed and the indication of the relative classification according to the points set out above.
|8a+ Sicav Eiger||2|
|8a+ Sicav Monviso||3|
|8a+ Sicav Etica||1|
This statement is issued for the financial year 2021, subject to any updates in the range of products offered. More information in relation to the integration of sustainability risk into the Management Company's internal procedures can be found at the Management Company's registered office and on its website: www.ottoapiu.it.