Article 3, Regulation EU 2019/2088 “SFDR”
“Transparency of sustainability risk policies”
P101 is aware that the integration of environmental, social and governance (“ESG”) factors into the investment process, as well as the implementation of efficient procedures to identify and prevent ESG risks, allows the promotion of innovation and the support of economic and sustainable development.
The SGR is therefore committed to include ESG risks into its evaluation and selection of investment opportunities to create and manage alternative investment funds able to prevent potential material negative impact on the value of the investment. Article 2(22) of the SFDR defines sustainability risk as “an environmental, social or governance event or condition that, if it occurs, could cause an actual or potential material negative impact on the value of the investment”.
Therefore, P101 has formalised in its ESG Policy a responsible investment approach, which foresees the identification and assessment of potential ESG risks for each target investment. Before taking any investment decision, the SGR:
- applies exclusion criteria for controversial industries. This is aimed at avoiding investments in assets that are more exposed to the risk of value loss due to an ESG; event/condition.
- conducts due diligence activities aimed at assessing the risks and opportunities of the investment, including with reference to sustainability risks.
- with reference to Fund P103, for which the SGR promotes environmental and social characteristics, a specific ESG due diligence is also carried out internally by the Management Team, and eventually by external industry experts who may be appointed on a case-by-case basis, to further identify risks and opportunities associated with the target company.
The relevant information gathered during the pre-investment phase is included in the investment memorandum, which is provided to the board of directors/investment committee to be able to make informed investment decisions also with respect to ESG risks associated with the target company.
Furthermore, during the holding period, the SGR periodically reviews ESG risks, which are incorporated into the overall risks and contribute to the formation of the asset’s and the fund’s risk indicators.
With reference to Fund P103, for which the SGR considers the principal adverse impacts (“PAI”) in accordance with Article 7 of the SFDR, the PAI indicators are also taken into account as part of the Fund’s investments risk assessment, considering their potential negative effects on the value of the investment (e.g., in terms of operational or reputational risks).