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Integration of sustainability risks in our remuneration policies:
As per Article 5 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 (the “SFDR”), Financial Market Participants shall include in their remuneration policies information on how those policies are consistent with the integration of sustainability risks and shall publish that information on their websites.
Consulco Capital Ltd (“the Company”) currently does not expect to make any changes to its remuneration policy in relation to sustainability risks, as its remuneration policy does not encourage excessive risk taking, including risk taking in terms of sustainability risk (including greenwashing risks).
Integration of sustainability risks in the investment decision-making process
Sustainability risks means an environmental, social or governance (ESG) event or condition that, if it occurs, could cause actual or potential material negative impact on the value of the investment.
Currently the Company does not offer alternative investment funds (AIFs) that seek to promote one or more environmental or social characteristics, nor does it have sustainable investment as its objective. The AIF under management is therefore considered as an “Article 6” financial product in accordance with 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 (the “SFDR”).
The Company exclusively manages an AIF that invests in private equity; thus, sustainability risks (including greenwashing risks) are deemed irrelevant to the Company’s business decisions, taking into account nature and scope of our activities.
The Company, however, acknowledges that if in the future sustainability risks occur, which may have a negative impact on the returns of its AIF, these will be included in the risk management process as well as in the AIF’s rules and offering documents and prospectus.
No consideration of adverse impacts of investment decisions on sustainability factors
Principle adverse impacts (“PAIs”) are potential adverse effects of investment decisions on sustainability factors. Sustainability factors are environmental, social and employee matters, respect for human rights, anti-corruption, and anti-bribery matters.
In accordance with Article 4(1)(a) 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 (the “SFDR”), financial market participants shall publish and maintain on their website where they consider PAIs of investment decisions on sustainability factors a statement on due diligence policies with respect to those impacts taking due account of their size, the nature and scale of their activities and the types of the financial products they make available.
Where financial market participants do not consider adverse impacts of investment decisions on sustainability factors, clear reasons for why they do not do so, including, where relevant, information as to whether and when they intend to consider such adverse impacts must be disclosed.
As per Article 12 of Commission Delegated Regulation (EU) 2022/1288, Consulco Capital Ltd (“the Company”) in its capacity as a Financial Market Participant, for the time being, except as may be otherwise disclosed at a later stage on our website, does not consider principal adverse impacts of investment decisions on sustainability factors due to the fact that currently such considerations are deemed irrelevant to the Company’s business decisions taking into account the nature and scope of the Company’s activities.
Sustainability Risk Policy - December 2023
1. Introduction
Consulco Capital Limited (the “Company”) is a limited liability company with share capital, incorporated in accordance with the Laws of the Republic (Registration Number HE330560). The Company is regulated as an alternative investment fund management company (“AIFM”) by the Cyprus Securities and Exchange Commission (“CySEC”) with license number AIFM05/56/2013.
The Company is committed to integrating sustainability risks in its investment decision-making process. For the purposes 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 (the “SFDR”), the Company maintains this sustainability risk policy (the “Sustainability Risk Policy”), which includes the processes followed by the Company in relation to sustainability risks.
The regulatory framework considered for the purpose of this policy is as follows:
2. Key Definitions
Art. 2 (17) of the SFDR defines “sustainable investment” as investment in an economic activity that contributes to an environmental objective, as measured, for example, by key resource efficiency indicators on the use of energy, renewable energy, raw materials, water and land, on the production of waste, and greenhouse gas emissions, or on its impact on biodiversity and the circular economy, or an investment in an economic activity that contributes to a social objective, in particular an investment that contributes to tackling inequality or that fosters social cohesion, social integration and labour relations, or an investment in human capital or economically or socially disadvantaged communities, provided that such investments do not significantly harm any of those objectives and that the investee companies follow good governance practices, in particular with respect to sound management structures, employee relations, remuneration of staff and tax compliance;
Art. 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.
Art. 2 (24) of the SFDR defines “sustainability factors” mean environmental, social and employee matters, respect for human rights, anti‐corruption and anti‐bribery matters.
Recital 16 of Commission Delegated Regulation (EU) 2022/1288 states that ‘greenwashing’, is, in particular, the practice of gaining an unfair competitive advantage by recommending a financial product as environmentally friendly or sustainable, when in fact that financial product does not meet basic environmental or other sustainability-related standards.
Recital 11 of Taxonomy Regulation (EU) 2020/852 states in the context of this Regulation that, “greenwashing” refers to the practice of gaining an unfair competitive advantage by marketing a financial product as environmentally friendly, when in fact basic environmental standards have not been met.
European Supervisory Authorities (“ESAs”) common high-level understanding of greenwashing
The ESAs understand greenwashing as a practice where sustainability-related statements, declarations, actions, or communications do not clearly and fairly reflect the underlying sustainability profile of an entity, a financial product, or financial services. This practice may be misleading to consumers, investors, or other market participants.
3. Scope of the Policy
The Sustainability Risk Policy applies to the Company since it qualifies as a financial market participant due to its authorization to operate as an AIFM and to any alternative investment funds under the management of the Company (the “funds under management”).
The employees of the Company are expected to read, understand and acknowledge the content of the Sustainability Risk Policy.
4. Purpose and Approach
The Sustainability Risks Policy describes the Company approach, handling and monitoring of sustainability risks (including greenwashing risks) which may arise during the investment decision making process relating to the Alternative Investment Fund (“AIF”) it manages and falls under the scope of SFDR.
Within the Policy the Company aims to:
i. set the framework for the manner in which sustainability risks are integrated into their investment decisions, and
ii. describe the approach taken to manage and monitor sustainability risks which may have a material influence on the AIF managed by the Company.
The Company’s approach in integrating sustainability risks into its investment decision making process is to ensure that the services provided and its operations do not result in unacceptable impacts on the environment and society.
5. Integration of Sustainability Risks into the Investment Decision Process
Sustainability risks means an environmental, social or governance (ESG) event or condition that, if it occurs, could cause actual or potential material negative impact on the value of the investment.
Currently the Company does not offer alternative investment funds (AIFs) that seek to promote one or more environmental or social characteristics, nor does it have sustainable investment as its objective. The AIF under management is therefore considered as an “Article 6” financial product in accordance with the SFDR.
The Company exclusively manages an AIF that invests in private equity; thus, sustainability risks are deemed irrelevant to the Company’s business decisions, taking into account nature and scope of the Company’s activities.
The Company, however, acknowledges that if in the future sustainability risks occur (including greenwashing risks), which may have a negative impact on the returns of its AIF, these will be included in the risk management process as well as in the AIF’s rules and offering documents and prospectus.
Furthermore, investments within the AIF currently do not take into account the EU Taxonomy criteria (Regulation EU 2020/852 on the establishment of a framework to facilitate sustainable investment) for environmentally sustainable economic activities unless otherwise stated in the Sub-Funds’ investment objective and policy.
6. Policy Review & Monitoring
The Company will monitor and review the Policy on an annual basis and on an ad-hoc basis in the event of major changes to the policy framework of the Company and will proceed to changes where and as needed.
The policy will be acknowledged by the Board of Directors of the Company after every review and/or material changes to its content.
