Article 10, Regulation EU 2019/2088
“Transparency of the promotion of environmental or social characteristics and of sustainable investments on websites”.
In accordance with the provisions of EU Regulation 2088/2019 regarding financial products under Article 8, P101 has established and currently manages “Programma 103”, a EuVeca closed-end venture capital fund for qualified investors, specializing in investments supporting the development and growth of SMEs and innovative startups. The Fund’s objective is to promote social and environmental characteristics so as to have a positive impact on the environment and society deriving from its activities. In accordance with this principle, the Fund does not invest in companies that are not aligned with the guiding fundamentals of responsible investing, in line with the financial market’s increasing focus on investment sustainability profiles and sustainability risk management.
In promoting the social characteristics of investments in the target companies of Article 8 SFDR, Programma 103 is focused by some of the Sustainable Development Goals (SDGs) defined by the United Nations UN, including:
- SDG n. 5 Gender Equality;
- SDG n. 8 Decent Work and Economic Growth;
- SDG n. 9 Industry, Innovation and Infrastructure;
- SDG n. 10 Reduced Inequalities;
- SDG n. 13 Climate Action.
Programma 103 is a restricted Fund focused on industrial and digital technologies, such as, but not limited to: consumer enablement, financial and insurance services, health and wellness, and industrial and transportation, where there are significant opportunities and great consumer demand. Moreover, these industries have a generally low environmental impact, since the digital sector does not exploit natural resources nor is it a source of pollution with respect to other, extractive industries. Also, some of the aforementioned industries, such as health and wellness, have undoubtedly several benefits on the social side.
Programma 103, coherently with the principles adopted by the SGR, and in line with the legal requirements ex. Art. 8 SFDR, adopts internal policies and procedures aiming at the proper identification, management and mitigation of sustainability risks, excluding the possibility of investing in sectors typically characterized by higher sustainability risks (according to international market practices): the full exclusion criteria are disclosed here ex. Article 3, Regulation EU 2019/2088.
In the process of assessing an investment opportunity, the SGR undertakes a comprehensive examination of the environmental, social, and governance ESG aspects related to potential target companies. This evaluation comprehends an ESG Due Diligence and, if necessary, it requires the engagement with specialized consultants. The objective is to determine the degree to which the potential target companies align with the environmental or social factors that the Fund seeks to promote. Additionally, the examination aims to identify the areas where these companies can enhance their ESG practices.
The SGR takes into consideration the findings of the ESG Due Diligence when making investment decisions. However, the ultimate determination of whether to proceed with investment operations, within the limits defined by the Funds’ Regulations, rests solely with the SGR.
Within the ESG Due Diligence process, the SGR applies exclusions according to P101’s Responsible Investment Policy and Programma 103’s Responsible Investment Strategy, followed by an analysis of any potential Target’s environmental or social risks that might lead to reputational damages, through various media sources and materials. Moreover, Programma 103 carries out a thorough evaluation of ESG practices expressed by industry peers of the Target in order to assess its alignment with respect to companies with similar business models, hence similar sustainability-related risks. In the meantime, some KPIs are identified and monitored on a periodic basis.
At the end of the ESG Due Diligence activity, a Sustainability Profile is identified for each Target company, so as to give a graphical representation of sustainability performance with respect to the 5 SDGs promoted by Programma 103. Even if the Target company does not obtain a satisfying rating, it is not excluded from the investment process: the Sustainability Profile remains one of the control tools for monitoring the progress of the environmental or social characteristics promoted by the Fund.