Hanseatic Capital Management Ltd (HCM) qualifies as a “financial market participant” pursuant to Regulation (EU) 2019/2088 on sustainability‐related disclosures in the financial services sector (the “SFDR”). Under the SFDR, financial market participants are required to publish information on their website, including on their policies on the integration of sustainability risks in their investment decision-making process and on how they consider principal adverse impacts of investment decisions on sustainability factors.
The statements below are made in accordance with applicable provisions under Articles 3, 4 and 5 of the SFDR.
Integration of sustainability risks in investment decision‐making processes
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 HCM 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. Each AIF is therefore considered as an “Article 6” financial product in accordance with the SFDR.
In line with the SFDR HCM considers where material sustainability risks when selecting investments as part of the overall risk assessment of the AIFs that HCM externally manages.
HCM exclusively manages AIFs that invest in vessels or real estate assets or private equity (directly or indirectly). The main sustainability risks that HCM considers are “climate risks”, which can be divided into physical risks (risks to the investments that arise from the physical effects of climate change) and transition risks (risks to the investments that arise from the transition to a low-carbon and climate-resilient economy, which include amongst others policy risks, legal risks, reputational risks, etc.), but also other sustainability risks are considered as described in the offering memorandum of the respective AIFs. HCM considers that it cannot be excluded that further risks will be included in the risk management process in the future.
HCM acknowledges that when sustainability risks occur, there may be negative impact on an assets value and therefore this could have a material impact on the Net Asset Value of the AIFs under management.
No consideration of sustainability adverse impact
Principal adverse impacts on sustainability factors refer to adverse impacts of investment decisions on sustainability factors that mean environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters
In accordance with the discretion granted pursuant to the SFDR, HCM does not consider the adverse impacts of investment decision on sustainability factors in respect of the AIFs under management as the investment strategies of the AIFs under management do not regard sustainability factors to be material to their investment strategy. In the event that sustainability factors do, in the future, become material, HCM will consider the principal adverse impacts of its investment decisions on sustainability factors.
Remuneration policy and the integration of sustainability risks
Pursuant to the SFDR, HCM is required to explain how its remuneration policy is consistent with the integration of sustainability risks.
HCM does not encourage or reward an excessive assumption of sustainability risks according to its remuneration policy. The said policy is consistent with the integration of sustainability risks. In particular HCM ensures that performance is evaluated on a number of key principles, such as, for example:
- Remuneration should be consistent with and promote sound and effective risk management; amongst other through encouraging risk-taking approaches which are consistent with the risk profile of the AIFs managed by HCM.
- Use of both quantitative (financial) as well as qualitative (non-financial) criteria for assessing individual performance, which will include ESG criteria (such as the integration of ESG risks into the investment decisions; and adherence to HCM sustainability policies and standards)
EU Taxonomy criteria (Regulation EU 2020/852) on the establishment of a framework to facilitate sustainable investment) for environmentally sustainable economic activities
Further HCM does not manage AIFs that take into account the EU criteria for environmentally sustainable economic activities.