ESG

The world faces intensifying challenges as environmental tensions grow, populations age and wealth and consumption increase while the gap in income inequality widens. Addressing these challenges will require rebuilding the physical fabric of the global economy.

However, what has traditionally been understood as a risk mitigation tool, has proven that it can also be a valuable source of value creation. The Fund is reviewing internally and with its advisers the eventual classification under Article 8 of the EU´s Sustainable Finance Disclosure Regulation (“SFDR”). SFDR Article 8, also known as ‘environmental and socially promoting’, applies “… where a financial product promotes, among other characteristics, environmental or social characteristics, or a combination of those characteristics, provided that the companies in which the investments are made follow good governance practices.”

The thematic focus of the Fund on essential services, social infrastructure and energy transition, along the integration of ESG considerations across all phases of the investment process may lead to diminishing business risks, boosting productivity, reducing costs and growing revenue – allowing for higher risk-adjusted returns while creating a positive impact in society as a whole.

Fund’s objective for integrating ESG factors into the investment cycle is to ensure that its counterparties respect and ideally benefit from the integration for their stakeholders, society as a whole, and the environment. Each investment should be analysed based on two key criteria, its potential to deliver positive performance and the opportunity to make a positive ESG impact.

Article 8 of the Taxonomy Regulation¹ aims to increase transparency in the market and prevent greenwashing by providing investors with information on the environmental performance of the assets and economic activities of Issuers² subject to the NFRD³. The information requested may differ for financial or non-financial undertakings.