DISCLOSURE ACCORDING TO ARTICLES 3, 4 AND 6
OF THE EU DISCLOSURE REGULATION 2019/2088
(SUSTAINABLE FINANCE DISCLOSURE REGULATION, SFDR)
Status 08/2022
GENERAL
This disclosure applies to Consus Invest GmbH in its role as a financial market participant (alternative investment fund manager, AIFM) as defined in Regulation (EU) 2019/2088 (“Disclosure Regulation” or “SFDR”).
DISCLOSURE ON SUSTAINABILITY RISKS (Art. 3 SFDR).
The EU Regulation “on sustainability-related disclosure requirements in the financial services sector” entered into force on March 10, 2021. It is part of the EU action plan with the goal of sustainable finance, which aims, among other things, to achieve the specifications and target values of the Paris Climate Agreement. Sustainability and the transition to a secure, climate-neutral, climate-smart, resource-efficient, and more circular economy are central to ensuring the long-term competitiveness of the EU economy.
The sustainability strategy of Consus Invest GmbH includes the consideration of legal requirements resulting from ESG issues. This includes, among other things, the clarification regarding the handling of sustainability risks in the context of the provided services provided in the context of fund management of alternative investment funds by Consus Invest GmbH.
What is sustainability?
Sustainability risks are defined in Art. 2 (22) SFDR as follows: “An environmental, social or governance event or condition, the occurrence of which could have an actual or potential material adverse effect on the value of the investment”.
Sustainability factors are divided into three categories:
- Environmental
- Social
- Corporate governance
They can be macroeconomic in nature or directly related to a company’s activities. Macroeconomic sustainability factors include physical climate risks such as global warming and the resulting extreme weather events such as storms or floods. They also include the so-called transition risks associated with the transition to a low-carbon economy. For example, policies such as a carbon tax on fossil fuels may favor manufacturers of alternative propulsion systems.
Sustainability factors that relate to a company’s activities may include environmentally friendly production, compliance with basic labor rights, or measures to prevent corruption.
Our understanding of sustainability risks (“ESG risks”) includes such events or conditions, the occurrence of which could potentially have a material adverse effect on the assets, profitability or reputation of Consus Invest GmbH itself or the Alternative Investment Funds it manages.
When selecting and monitoring investment decisions, Consus Invest GmbH considers ESG characteristics in addition to economic aspects, depending on the respective investment strategy. To evaluate the identified ESG risks and to take them into account in the investment decision, ESG data – as far as available from external partners – is used in combination with our own research.
Responsible investments
Consus Invest GmbH considers sustainable investing to be an important principle. We believe that considering ESG risks in the investment process can lead to a better risk-return profile in the long term, as this ensures investors a long-term and efficient strategy.
Responsible equity interests
The greatest leverage for sustainability lies in equity investments. As part of sustainable fund management, the fund management team aims to steer their corporate investments towards sustainability in a targeted manner. The investment strategy defines the extent to which ESG risks are considered and how we apply environmental, social and governance (ESG) criteria in our investments.
DISCLOSURE OF ADVERSE SUSTAINABILITY IMPACTS AT THE COMPANY LEVEL (Art. 4 SFDR).
Article 4 of Regulation (EU) 2019/2088 (SFDR) requires financial market participants to provide transparent information about adverse sustainability impacts at the company level.
Consus Invest GmbH is committed to general environmental, social as well as climate-friendly values in its business activities and does not include the main adverse impacts of investment decisions on sustainability factors (as a financial market participant in fund management) in view of the nature and scope of its activities in the strict sense of the Disclosure Regulation. As a matter of principle, ethical/sustainable claims are to be weighed against financial ones in the corporate investment process, so that the performance of the managed fund is maintained in terms of earning capacity. The goal of fund management remains a broadly diversified investment portfolio, in which active management enables a sustainably attractive performance.
Consus Invest GmbH has chosen to survey the main adverse effects of investment decisions on sustainability factors during the investment process and to introduce appropriate processes.
DISCLOSURE ON THE CONSIDERATION OF SUSTAINABILITY RISKS (Article 6 SFDR).
Article 6 of Regulation (EU) 2019/2088 (SFDR) requires financial market participants to provide explanations in pre-contractual information on how sustainability risks are factored into their investment decisions and what, as part of the assessment of the results, the expected impact of sustainability risks on the return of the financial product (AIF) might be.
Consus Invest GmbH incorporates sustainability risk considerations into the corporate investment process. These risks are collected during surveys beginning with the preliminary decision, processed, and taken into account in the course of the final investment decision. The results of such risk assessments regarding environmental, social or governance aspects are forward-looking and therefore not binding. Every investment decision also entails sustainability risks of varying degrees. These are influenced by the size of the investment, the dynamics of corporate development and the organizational resources of the respective investee.
Identified and assessed sustainability risks are managed in accordance with the requirements DELEGATED REGULATION (EU) 2022/1288 – Annex with appropriate measures to reduce the risk, and implementation at the target company is monitored.