DISCLOSURE OF INFORMATION ON SUSTAINABILITY
SUSTAINABILITY AND ESG CRITERIA
The Solventis Group has been a signatory to the PRI (Principles for Responsible Investment) since September 26, 2019 and a member of the PRI Association, Solventis is an institution that promotes responsible investment under the supervision of the UNEP Finance Initiative and the United Nations Global Compact. It also supports the Sustainable Development Goals set by the United Nations on September 25, 2015, and the United Nations Paris Agreement of December 12, 2015, which aims to advance the goals of the United Nations Framework Convention on Climate Change of May 9, 1992, and strengthen the global response to the threat of climate change.
As a result of this and its commitment to environmental preservation, sustainability and ethical, social and good governance (ESG) principles, Solventis SGIIC has approved a Sustainability Risk Integration Policy that it will progressively apply in the investment process of the managed UCIs and ECRs.
Considering these criteria in investment analysis provides a qualitative view of companies by integrating metrics indicative of their commitment to ESG principles with financial data and growth expectations. This analysis helps reduce risks and contributes to a positive investment impact.
Solventis supports the Paris Agreement signed on December 12, 2015
REGULATION 2019/2088 ON SUSTAINABILITY DISCLOSURE IN THE FINANCIAL SECTOR (SFDR)
1. The SFDR regulations require—in order to facilitate investors' assessment of the impact of their investments—that participants in financial markets—investment managers and advisors—publish their policies on integrating sustainability risks. They also provide uniform criteria for identifying the degree of sustainability of each managed investment vehicle.
2. In accordance with SFDR, Solventis SGIIC has approved a Sustainability Risk Integration Policy and a policy for assessing its impact on the profitability of the managed institutions (the Policy), which is being gradually incorporated into its investment selection, analysis, and decision-making processes. The risk ultimately borne by each investment will depend, among other factors, on the type of issuer, the sector of activity, and its geographical location.
3. In accordance with the Policy, the integration of sustainability criteria into investment selection is based on the following three pillars:
a) Identifying sustainability risks in the target companies and ensuring compliance with certain exclusion criteria for companies and sectors. These include:
i. Companies with behaviors contrary to international standards, human rights and labor standards.
ii. Illegal activities, as well as those that increase the carbon footprint or are substantially concentrated in sectors that run counter to the commitment to protecting human life and promoting human dignity. These include:
– Production and marketing of tobacco and distilled alcoholic beverages.
– Manufacture and marketing of weapons and ammunition, anti-personnel mines and/or cluster bombs.
– Pornography.
– Companies whose purpose is to illegally facilitate access to networks or the downloading of electronic data.
– Companies dedicated to gambling - casinos, internet betting and online casinos.
– Mining companies that generate more than 30% of their revenue from thermal coal or produce more than 20 million tons of it per year.
– Electricity companies that generate more than 30% of their energy from coal.
– Electric or mining companies that are in the process of developing new coal mines or thermal power plants.
– Oil extraction companies.
b) An integration process based on scores provided by external providers of non-financial information, as well as ESG ratings issued by rating agencies or the issuer's inclusion in sustainability indices. The analysis aims to assess aspects related to reputation, good governance, integrity, and commitment to the environment and the economic stakeholders with whom the companies operate. The policies implemented by companies to manage these variables must be observable, realistic, and measurable, and demonstrate positive evolution and a commitment to improvement.
Depending on each institution's objective and level of commitment to applying ESG criteria, a weighted average score and minimum portfolio coverage will be established for each institution to reflect its degree of compliance with the ESG requirements it pursues. The established criteria will be detailed in the information brochure.
c) A policy of engagement based on the active exercise of ownership through voting and dialogue processes with the issuer. Solventis will maintain an active stake in the companies in which it invests, requiring their sustainability policies in order to keep its objectives in mind and seeking to guide the strategy of such companies, when necessary, towards ESG criteria.
4. Regarding the main adverse impacts of investment decisions (PIAS) on sustainability factors, although its Sustainability Risk Integration Policy includes criteria for their management, Solventis SGIIC does not take them into consideration because:
a) the Management Company does not currently have sufficiently robust processes in place to analyze the available information and adequately quantify the foreseeable and actual impact of investment decisions and advice on sustainability factors, and
b) The size, nature and scale of activities of your current business do not advise considering PIAs in investment decision-making.
However, this does not prevent the inclusion of PIAs, or some of the elements mentioned in the Policy - such as provisions on dialogue and voting - in the management of certain financial products, in the process of integrating ESG factors into investment decisions and advice.