Sustainability Risk

Sustainability risks are uncertain environmental, social or governance-related events or
conditions that, if they occur, can cause a significant negative impact on the company
and other participants.

The three factors of ESG can be described  as follows:

Environment

It includes all risks associated with climate crisis, raw material depletion and environmental pollution.

Social

It covers all risks regarding diversity, human rights, consumer protection and animal welfare.

Governance

It refers to all responsibilities and rights of a company’s management, board and shareholders. It includes topics such as, management structure, employee relations, executive and employee compensation.

Remuneration Policy

fundcraft’s remuneration policy aims to:

  • Ensure that remuneration is in line with the business strategy, objectives, values and interests of fundcraft, its clients’ funds and the investors of the clients’ funds, where applicable
  • Not encourage risk‐taking which is inconsistent with the risk profiles, rules or articles of incorporation or management regulations of fundcraft or its clients’ funds
  • Ensure consistency with and promotion of sound and effective risk management to avoid excessive risk taking
  • Ensure consistency with the consideration of sustainability risks
  • Avoid or manage conflicts of interest

fundcraft has split the remuneration into a base salary, evenly paid out monthly, and a variable component paid as a bonus once a year. The base salaries for all employees are based on an individual’s role and the level of responsibility for the upcoming term. It is contractually fixed, reviewed once a year and typically only significantly adjusted if there is a role change. The variable component is relative to individual and team objectives as well as to the Company’s overall achievements. The amount is defined in advance at the beginning of term in accordance with the upcoming term’s objectives and expectations for the overall performance of the Company.

In addition to the remuneration, fundcraft offers long-term incentives in the form of equity-related compensation. This way, employees are more focused on sustainable value creation and avoidance of inappropriate risk-taking or short-term profit maximisation at the expense of long-term value generation for our clients and sustainability. A Good and Bad Leaver policy for the long-term incentive is in place.

fundcraft believes that the Remuneration Policy, and an individual employee’s remuneration, must be consistent with and promote sound and effective risk management and not encourage risk-taking that exceeds the level of tolerated risk of fundcraft. Among several risk-limiting features, fundcraft’s Remuneration Policy includes the application of nonfinancial metrics, such as an assessment of an employee’s compliance with the fundcraft’s Sustainability Risk Policy, where applicable.

Principal Adverse Impacts (PAIs) disclosure

Principal Adverse Impacts (PAIs) are negative impacts on sustainability factors (i.e. environment, social and governance factors) that may materialise or expand as part of an investment decision or advice.
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Article 8 (SFDR)

Currently, fundcraft does not consider principal adverse impacts of investment decisions on sustainability factors for its Funds disclosing under Article 8 (SFDR), the data required for identifying and weighting principal adverse sustainability impacts is not sufficiently available in the market or not of sufficient quality. fundcraft however regularly reviews the data situation and, if the situation changes, would reassess the possibility of taking into account PAIs of investment decisions on sustainability factors as part of its internal strategy for Article 8 Funds.
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Article 9 (SFDR)

With regard to Funds disclosing under Article 9 (SFDR) and depending on the concerned characteristics, fundcraft considers PAIs of its investment decisions on sustainability factors with a view to ensure that even though the sustainable investments are expected to be fully taxonomy aligned, the remaining of their activities are not causing any harm in terms of environmental, social or governance matters. For the concerned funds, the PAIs are disclosed in the fund documentation (e.g. Private Placement Memorandum). This document can be amended from time to time to follow evolution of the legal and regulatory framework on ESG related topics. PAIs are also further described in pre-contractual information. The funds documentation is available upon request at the AIFM office.

Sustainable Finance Disclosure Regulation (2019/2088)

For reference the current fund served under Article 8 or 9 are:

  • HEADLINE GLOBAL GROWTH IV LUX SCSP
  • UFENAU CONTINUATION 4, SLP
  • WATTS.GREEN RENEWABLE ENERGY FUND I SCSp, SICAV-RAIF
  • B2VENTURES V SCS
  • APOLLO HEALTH VENTURES FUND SCSp
  • SUSTAINABLE FUTURE VENTURES FUND I SCSp

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