Creandum Select Fund Manager AB (the “Fund Manager”) makes the following disclosure 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 (“SFDR”) and the Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment (“Taxonomy”).
Integration of sustainability risks into the Fund Manager’s investment decision making process
The SFDR, article 2(22), 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”, below “ESG factors”. The SFDR does not define more specifically what is meant by “material” in this context.
As part of the investment process for a potential fund investment, an initial high-level assessment of ESG-factors including human & labour right, ethics, environment & governance factors is carried out, without promoting environmental or social characteristics or having sustainable investments as a goal. In cases where any of these factors are considered to be higher than low risk, a more detailed assessment is carried out.
Sustainability risks’ effect on the returns of the fund investments
In the Fund Manager’s view, sustainability risks, particularly where unmitigated, could affect the value of investments held by a fund and/or the ability of the fund to dispose of investments, and hence the value of the fund. However, given the type of investments targeted by the funds managed by it, the Fund Manager assesses sustainability risks as such to impact the returns of the funds only to a minor extent.
No consideration of principal adverse impacts of investment decisions on sustainability factors
As described above ESG factors are considered as part of the investment process when managing a fund but, at this time, the Fund Manager will not consider adverse impacts of investment decisions on sustainability factors as specifically set out in the SFDR. The Fund Manager has chosen not to do so for the present time as it considers that its existing ESG policies and procedures are appropriate, proportional and tailored to the investment strategy of the funds it manages. The Fund Manager continues to closely monitor regulatory developments with respect to the SFDR and other applicable ESG-focused laws and regulations, including the implementation of related and secondary legislation and regulatory guidance, and will, where required or otherwise appropriate, make changes to its existing policies and procedures.
Information on the EU taxonomy for environmentally sustainable activities
The Taxonomy is a classification system that aims to establish common criteria for environmentally sustainable economic activities. The Taxonomy system is currently being developed and criteria for all environmental objectives are not yet clear. Thus, the funds managed by the Fund Manager do not report to which extent underlying investments do or do not take into account the EU criteria for environmentally sustainable economic activities.
The Fund Manager has a total remuneration model consistent with the integration of sustainability risks in the investment process and consisting of both fixed and variable remuneration. Where variable remuneration is paid, it is based on the fulfilment of criteria/targets, both financial and non-financial, as well as an individual's compliance with policies and procedures, including ESG related policies.