Important notice

The website disclosures (the “Disclosures”) are being made pursuant to Articles 4(1) and 10(1) of 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 (as amended) (“SFDR”) in respect of the Irish Strategic Forestry Fund (the “Partnership”).

The Disclosures do not constitute (a) an offer of securities or interests, (b) an offer or invitation to the public, or (c) an invitation to apply for securities or interests. The Disclosures are being made to enable Gresham House Asset Management Limited, in its capacity as portfolio manager of the Partnership (the “Portfolio Manager”) to comply with its obligations under applicable law.

Sustainability-related disclosures

Publication date: 23 December 2022

Summary

The Partnership invests in a diversified portfolio of forestry assets which includes bare land for productive woodland creation, mid-rotation forestry and mature forestry plantations.

All planting land and existing forests acquired by the Partnership will be managed by Coillte and will either be: (i) land and/or forests that is/are certified under the FSC® (Forest Stewardship Council®) or PEFC® (Programme for the Endorsement of Forest Certification®) and will continue to be independently certified as 100% sustainable pursuant to the relevant certification during the period that the Partnership owns it/them; or (ii) newly acquired land and/or forests which is/are not yet certified under the FSC® or PEFC® but which will be managed with a view to ensuring that they will achieve such certification within a reasonable timeframe of being purchased by the Partnership.

This financial product promotes environmental or social characteristics but does not have as its objective a sustainable investment.

At least 97% of the Partnership’s NAV (including, for the avoidance of doubt, such development capital allocated to land and forestry investment as may temporarily be held from time to time) is aligned with the environmental and/or social characteristics of the Partnership.

The Partnership does not commit to making sustainable investments within the meaning of SFDR.

The sustainability indicators used to measure the attainment of the environmental or social characteristics promoted by the Partnership are:

(i) continued FSC® or PEFC® certification of planting land and/or existing forests which are already so-certified at the time of their acquisition by the Partnership; and
(ii) attainment of FSC® or PEFC® certification of such planting land and/or existing forests as are not at the time of being acquired by the Partnership so-certified, within a reasonable timeframe of being purchased by the Partnership.
Certification will be assessed by third party auditors on a regular basis as well as by the Portfolio Manager on an ad hoc basis. Both the FSC® and PEFC® have well-established and internationally recognised pre-defined criteria. The criteria and methodology can be found on the following websites:

• FSC® – fsc.org/en/fsc-standards
• PEFC® – pefc.ie

Data is collated by the Portfolio Manager from a variety of sources including woodland managers, third-party consultants, public databases. Data will be checked by various members of the Portfolio Manager’s Investment and Asset Management team.

A survey is sent to woodland managers annually for receipt of forest data include sustainability-related data. The data is dependent on the disclosure of accurate and relevant data and information by the woodland managers. The Portfolio Manager will work closely with woodland managers to monitor data received and to support in collation and measurement of required data.

Given the scale of forests under management as well as challenges in measuring certain data relevant to the attainment of FSC® or PEFC® certification (for example in relation to biodiversity and carbon sequestration), assumptions are made to ensure that data collation and measurement is done in a way that is appropriate to the Partnership’s mandate and objectives. All data is calculated using science-based and reputed approaches however these often apply estimates and assumptions to account for the scale of the forests in which the Partnership is invested.

In addition to internal audits and independent audits by relevant certification bodies, the Portfolio Manager has a dedicated Sustainable Investment Team that will also carry out annual auditing of ESG processes to ensure they meet the sustainability-related commitments of the Partnership.

The Partnership will engage with relevant stakeholders (including suppliers and local communities) as necessary, in order to ensure that FSC® or PEFC® certification of planting land and/or existing forests invested in by the Partnership is achieved and/or retained. The Portfolio Manager may also engage with relevant regulatory, industry or government entities with regard to certain aspects of sustainable forest management.

No sustainable investment objective

This financial product promotes environmental or social characteristics but does not have as its objective sustainable investment.

Environmental or social characteristics of the financial product

All planting land and existing forests acquired by the Partnership will be managed by Coillte and will either be:

(i) land and/or forests that is/are certified under the FSC® (Forest Stewardship Council®) or PEFC® (Programme for the Endorsement of Forest Certification®) and will continue to be independently certified as 100% sustainable pursuant to the relevant certification during the period that the Partnership owns it/them; or

(ii) newly acquired land and/or forests which is/are not yet certified under the FSC® or PEFC® but which will be managed with a view to ensuring that they will achieve such certification within a reasonable timeframe of being purchased by the Partnership.

Investment strategy

The Partnership invests in a diversified portfolio of forestry assets which includes bare land for productive woodland creation, mid-rotation forestry and mature forestry plantations.

All forests acquired or created will ultimately be certified and managed to international forestry management standards (FSC® or PEFC®) to ensure that the forests are managed in accordance with strict standards (incorporating prescribed social, economic and environmental criteria). All assets acquired by the Partnership require investment committee (“IC”) approval prior to acquisition.

An ESG report is provided to the IC for approval ahead of all investments. Once assets are acquired, they move into the asset management stage. At this point, assets will be managed to mitigate ESG-related risks and to meet (or continue to meet) the standards required in order to obtain (or retain) FSC® or PEFC® certification.

All forestry assets will be assessed at pre-investment stage and managed in line with the Charter unless any legal, regulatory, or natural obstacles outside the control of the Portfolio Manager prevent this.

The Charter sets out the Portfolio Manager’s commitments and targets in relation to sustainable forest management, based on international forestry standards, and the key performance indicators against which performance can be measured.

The Charter includes commitments and targets relating to the following categories. All commitments are at least aligned with forest certification standards:

• Forest Products & Services
• Climate Change
• Biodiversity & Woodland Ecology
• Forest Protection
• Income & Employment
• Communities & People
• Forest Certification and Standards

The Charter also reflects the Portfolio Manager’s commitment to apply the International Finance Corporation (IFC) exclusion policy as relevant to forestry assets(see ifc.org/exclusionlist) (the “Exclusion Policy“) to all forestry investments of the Partnership. This means that the Partnership will not be invested in:

• production or activities involving harmful or exploitative forms of forced labour/harmful child labour;
• commercial logging operations for use in primary tropical moist forest;
• production or trade in wood or other forestry products other than from sustainably managed forests; or
• production or activities that impinge on the lands owned, or claimed under adjudication, by Indigenous Peoples (as defined by the IFC for the purposes of its exclusion policy), without full documented consent of such people.

These exclusions are explicitly built into the Portfolio Manager’s proprietary ESG Decision Tool and require the Portfolio Manager to ensure that no new acquisition is in breach of the exclusions at due diligence stage.

All investments are screened using the Portfolio Manager’s Forestry ESG Decision Tool to ensure that ESG risks and opportunities are considered and the Exclusion Policy is applied, as part of sourcing, due diligence, acquisition, and ongoing management of assets. The ESG Decision Tool and KPIs set out in the Charter, as developed by the Portfolio Manager, will assist it to identify potential sustainability risks and opportunities pertaining to investments in a consistent manner, in line with the Portfolio Manager’s sustainability-related commitments. Further details relating to the ESG Decision Tool can be found in the section of the Information Memorandum entitled The Portfolio Manager’s ESG Decision Tool.

Proportion of investments

At least 97% of the Partnership’s NAV (including, for the avoidance of doubt, such development capital allocated to land and forestry investment as may temporarily be held from time to time) is aligned with the environmental and/or social characteristics of the Partnership. The Partnership does not commit to making sustainable investments within the meaning of SFDR.

Investments in the “#2 Other” category include investments and other instruments of the Partnership that cannot be aligned with the environmental and/or social characteristics of the Partnership. These can include, for example, portfolio management tools such as derivatives and cash (other than development capital allocated to land and forestry investment, as referred to above).

The Partnership does not make a minimum commitment to making investments that fall within the “#2 Other” category and therefore 0% is included for that category in the graphic below. This means that between 0% and 3% of the Partnership’s NAV might at any point in time qualify as “#2 Other” investments.

#1 Aligned with E/S characteristics includes the investments of the financial product used to attain the environmental or social characteristics promoted by the financial product.

#2 Other includes the remaining investments of the financial product which are neither aligned with the environmental or social characteristics, nor are qualified as sustainable investments.

The two graphs below show the minimum percentage of investments that are aligned with the EU Taxonomy. As there is no appropriate methodology to determine the Taxonomy-alignment of sovereign bonds*, the first graph shows the Taxonomy alignment in relation to all the investments of the financial product including sovereign bonds, while the second graph shows the Taxonomy alignment only in relation to the investments of the financial product other than sovereign bonds.

*For the purpose of these graphs, ‘sovereign bonds’ consist of all sovereign exposures.

Monitoring of environmental or social characteristics

The sustainability indicators used to measure the attainment of the environmental or social characteristics promoted by the Partnership are:

• continued FSC® or PEFC® certification of planting land and/or existing forests which are already so-certified at the time of their acquisition by the Partnership; and
• attainment of FSC® or PEFC® certification of such planting land and/or existing forests as are not at the time of being acquired by the Partnership so-certified, within a reasonable timeframe of being purchased by the Partnership.

The certification status of said land and forests will be assessed by third party auditors on a regular basis as well as by the Portfolio Manager on an ad hoc basis.

Methodologies for environmental or social characteristics

Both the FSC® and PEFC® have well-established and internationally recognised pre-defined criteria which must be met in order to obtain FSC® or PEFC® certification. The relevant criteria and methodology can be found on the following websites:

• FSC® –  fsc.org/en/fsc-standards
• PEFC® – pefc.ie

Data sources and processing

Data is collated by the Portfolio Manager from a variety of sources including woodland managers, third-party consultants, public databases in order to assess whether land and forests are being managed in line with FSC®/ PEFC® requirements. Data will be checked by various members of the Portfolio Manager’s Investment and Asset Management team.

A survey is sent to woodland managers annually for receipt of forest-related data including sustainability-related data. The data is dependent on the disclosure of accurate and relevant data and information by the woodland managers. The Portfolio Manager will work closely with woodland managers to monitor data received and to support in collation and measurement of required data.

Given the scale of forests under management as well as challenges in measuring certain data relevant to the attainment of FSC® or PEFC® certification (for example in relation to biodiversity and carbon sequestration), assumptions are made to ensure that data collation and measurement is done in a way that is appropriate to the Partnership’s mandate and objectives.

All data is calculated using science-based and reputed approaches however these often apply estimates (the proportion of which estimates will vary) and assumptions to account for the scale of the forests in which the Partnership is invested.

Limitations to methodologies and data

This section will be updated to include relevant limitations if and when these become apparent (on the basis of the understanding that this disclosure is required to include such limitations as relate to the scope of methodologies and data coverage, rather than limitations pertaining to the accuracy of data (which is addressed in the section immediately above).

Due diligence

All forests are inspected by the Portfolio Manager on a regular basis to ensure the requisite quality of woodland management. These internal audits will assess for adherence to the criteria relevant to achievement of the Partnership’s environmental and social characteristic, and associated forest management plans.

Forests will be independently audited by the relevant certification bodies (FSC® and/or PEFC®) to assess for compliance with their certification standards on a regular basis.

The Portfolio Manager also has a dedicated Sustainable Investment Team. This team will, inter alia, carry out annual auditing of the Portfolio Manager’s ESG-related due diligence processes to ensure they remain appropriate to attaining the environmental and social characteristic promoted by the Partnership.

The Portfolio Manager makes use of its proprietary ESG Tool to assist in evaluating the ESG impact of proposed investments as part of its due diligence process and to support the determination of the ESG KPIs as part of the initial investment process, which feeds into the ongoing monitoring of the Partnership’s incorporation of ESG considerations in its investment strategy. As part of this strategy, the Portfolio Manager conducts a detailed analysis of positive and negative factors affecting the investment, including any ESG event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the investment (“ESG Risk”). The assessment of ESG Risks is conducted by the Portfolio Manager using data and information derived from a variety of sources and the Portfolio Manager’s own research, including the use of the ESG Tool.

Engagement policies

The Partnership (in line with the Charter) will engage with relevant stakeholders (including suppliers and local communities) as necessary, in order to ensure that FSC® or PEFC® certification of planting land and/or existing forests invested in by the Partnership is achieved and/or retained. The Portfolio Manager may also engage with relevant regulatory, industry or government entities with regard to certain aspects of sustainable forest management.

Supplementary Prospectus >>

Adverse sustainability impacts

Pursuant to 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”), the Fund is not classified as an Article 8 or Article 9 fund, however, disclosure in accordance with the requirements of Article 6 of SFDR in relation to the integration of sustainability risks, which is applicable to the Fund, is set out in the Prospectus. The Fund does not consider adverse impacts of investment decisions on sustainability factors, as defined under SFDR, as it is not required to do so under Article 4(3).

EU Taxonomy

The investments underlying this financial product do not take into account the EU criteria for environmentally sustainable economic activities.

Supplementary Prospectus >>

Adverse sustainability impacts

Pursuant to 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”), the Fund is not classified as an Article 8 or Article 9 fund, however, disclosure in accordance with the requirements of Article 6 of SFDR in relation to the integration of sustainability risks, which is applicable to the Fund, is set out in the Prospectus. The Fund does not consider adverse impacts of investment decisions on sustainability factors, as defined under SFDR, as it is not required to do so under Article 4(3).

EU Taxonomy

The investments underlying this financial product do not take into account the EU criteria for environmentally sustainable economic activities.

Supplementary Prospectus >>

Adverse sustainability impacts

Pursuant to 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”), the Fund is not classified as an Article 8 or Article 9 fund, however, disclosure in accordance with the requirements of Article 6 of SFDR in relation to the integration of sustainability risks, which is applicable to the Fund, is set out in the Prospectus. The Fund does not consider adverse impacts of investment decisions on sustainability factors, as defined under SFDR, as it is not required to do so under Article 4(3).

EU Taxonomy

The investments underlying this financial product do not take into account the EU criteria for environmentally sustainable economic activities.

Supplementary Prospectus >>

Adverse sustainability impacts

Pursuant to 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”), the Fund is not classified as an Article 8 or Article 9 fund, however, disclosure in accordance with the requirements of Article 6 of SFDR in relation to the integration of sustainability risks, which is applicable to the Fund, is set out in the Prospectus. The Fund does not consider adverse impacts of investment decisions on sustainability factors, as defined under SFDR, as it is not required to do so under Article 4(3).

EU Taxonomy

The investments underlying this financial product do not take into account the EU criteria for environmentally sustainable economic activities.

Supplementary Prospectus >>

Summary

The Gresham House Thematic Multi Asset Fund is managed through a top-down asset allocation framework which involves the formation of a house view on financial markets that drives the asset allocation. Individual asset allocation decisions are based on bottom-up fundamental analysis and application of a sustainable investment process.

The fund promotes environmental and social characteristics by investing at least 70% of its value in “sustainable assets”, as well as not investing in companies which do not adhere to global norms on environmental protection, human rights, labour standards and anti-corruption, and excluding companies which have significant involvement in certain industries. “Sustainable assets” are defined as those which meet the fund’s sustainable thematic alignment and exclusion criteria. Thematic alignment will be determined by the percentage revenue, or equivalent metric relevant to the business model, which demonstrates contribution to a sustainable theme. Investments must demonstrate that more than 20% of revenue, or equivalent metric, contributes to a sustainable theme to be included in the fund. The fund will report on the percentage of holdings aligned to each theme on a periodic basis.

In order to ensure the securities in the fund adhere to global norms and do not invest in excluded industries, an external ESG data provider is employed to monitor the portfolio. The internal investment team is responsible for compiling a sustainable investment thesis for each asset. The thesis includes a summary of findings from the ESG Decision Tool, employed to assess material ESG risks and opportunities, and an assessment of the thematic alignment of the underlying security.

No sustainable investment objective

This financial product promotes environmental or social characteristics but does not have as its objective a sustainable investment.

Environmental or social characteristics

The fund promotes environmental and social characteristics by investing at least 70% of its value in sustainable assets. “Sustainable assets” are defined as those which align to sustainable themes, including but not limited to Climate & Energy, Waste, Circular Economy and Food & Agriculture, and meet the fund’s exclusion criteria restricting investment in certain activities. The fund will also not invest in companies which do not adhere to global norms on environmental protection, human rights, labour standards and anticorruption.

Investment strategy

The Gresham House Thematic Multi Asset Fund seeks to achieve long-term capital appreciation with moderate risk exposure by investing on a diversified basis in transferable securities, such as equity securities and debt securities, and in collective investment schemes. The Fund may invest across asset classes, sectors, geographies, and market capitalisations without limitation save in respect of the restriction on investment that do not meet the fund’s thematic and exclusion criteria described below.

The Gresham House Thematic Multi Asset Fund is managed through a top-down asset allocation framework which involves the formation of a house view on financial markets that drives the asset allocation. Individual asset selection decisions are based on bottom-up fundamental analysis, including a consideration of valuation and business quality, as well as alignment to sustainable themes and adherence to exclusion criteria.

Exclusion criteria

All investments must pass a screening process carried out by a third-party data provider to ensure they meet the fund’s exclusionary criteria. Exclusionary criteria are twofold:

First, the fund precludes investment in companies which do not adhere to global norms on environment protection, human rights, labour standards and anti-corruption. Global norms include:

• OECD Guidelines for Multinational Enterprises
• ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy
• UN Global Compact
• Guiding Principles on Business and Human Rights

The third-party data provider will produce a red flag for investments considered to violate these Norms. Investments receiving a red flag cannot be invested in or will be sold within three months if already invested.

Secondly, the fund excludes investments with significant involvement in certain industries and activities. The industries or activities and exclusion thresholds are listed below:

• Military Equipment Services and Production >10% revenue
• Gambling >10% revenue
• Pornography > 5% revenue
• Tobacco > 10% revenue
• Nuclear Power >10% revenue
•  Abortifacients – any involvement in Production, Distribution, Services
• Abortion Services/Planned Parenthood – any involvement
• Contraceptives – any involvement in Production, Distribution, Services
• Stem Cell Research – any involvement
• Alcohol Production – > 10% Revenue
• Fossil Fuels Production and/or Exploration >10% Revenue

Any investment that is determined by the third-party data provider to breach the thresholds will be sold from the portfolio within three months.

Thematic alignment

For all new investments made by the fund (except for cash or cash equivalents, or sovereign bonds), a company note including an investment and sustainability thesis must be produced prior to investment. This includes an analysis of the thematic alignment of the security and includes detail such as the theme targeted and a description of how the asset aligns to the theme.

All investments made by the fund must also be assessed using the ESG Decision Tool (“the Tool”) prior to investment. This tool is used to assess material sustainability risks and opportunities to the investment case and to identify any areas to be monitored and addressed through engagement and/or voting, as and when relevant, through the holding period. A summary of material findings from the Tool will be included in the company note.

Good governance

Good governance is assessed through application of the Tool which prompts an assessment of sustainability risks and opportunities to the investment case under the headings noted below:

• Board structure, composition and protocols
• Board skills and engagement, including in ESG risk
• Delivering change and success
• Anti-competitive behaviour
• Anti-bribery & corruption
• Ethical risk profiling and management

It is also considered that the exclusion of investments in breach of global norms contributes to the avoidance of investments that do not demonstrate good governance.

Sovereign bonds

Investment in sovereign bonds does not apply the fund’s exclusion or thematic alignment criteria. Investments in sovereign bonds that are intended to be held for more than 12 months (i.e. those that are not considered cash or cash equivalents) will be required to have a prime ESG rating (B- or above), as defined by a third party ESG data provider.

Proportion of investments

The fund invests across a variety of asset classes including equities, cash, bonds, property and alternative assets such as infrastructure and forestry. The fund will invest at least 70% of fund value in assets that promote environmental and social characteristics as determined by their alignment to sustainable themes and compliance with the fund’s exclusion criteria.

Up to 30% of the fund asset value is classified as “other”. This mainly consists of investments in cash and/or bonds. This allocation is necessary from an asset allocation perspective

The fund does not intend to make any sustainable investments.

Monitoring or environmental or social characteristics.

1. Continuous monitoring is carried by an external ESG data provider to ensure investments are not in breach of global norms in relation to environmental protection, human rights, labour standards and anti-corruption and to ensure that investments continue to meet exclusionary criteria.

2. Meetings with representatives of investments will be carried out regularly by the Gresham House Ireland Investment Team in order to:

• Assess the underlying investment thesis including alignment to sustainable themes
• Monitor any ESG specific risks identified
• Assess additional ESG risks
• Encourage improvements in ESG shortcomings

3. The Fund is overseen by the Gresham House Ireland Investment Committee on a regular basis who provide oversight of the fund’s adherence to the investment process detailed above.

Methodologies

To ensure an alignment of investments to sustainable themes, a sustainable investment thesis is compiled by the Investment Team which includes an analysis of thematic alignment as well as an assessment of ESG risks. The assessment of thematic alignment is based on bottom-up fundamental research.

An external provider is employed to ensure the global norms, exclusionary criteria and country ESG ratings of the fund are met. Please see here links to the:

• Methodology applied to assess adherence to global norms
• Methodology applied to determine revenue associated with exclusion criteria
• Methodology applied to assess country ESG rating

Data sources and processing

An external provider, currently ISS (Institutional Shareholder Services), is employed to provide data relating to compliance with global norms, breach of exclusion criteria, principal adverse impact indicators and country ESG ratings.

Internal analysis of all investments is conducted by the Gresham House Ireland Investment Team to determine thematic alignment. This is based on publicly available information and includes a review of documents including annual reports and sustainable investment reports, or equivalent.

Limitations to methodologies and data

Data relating to exclusions and global norms violations is provided by third party providers. The Manager is dependent on the external provider to provide accurate data. This data is also dependent on companies disclosing relevant data and accurate data.

The subjective nature of ESG data and sustainability topics means that third parties may not agree with the Investment Team or external provider in relation to thematic alignment or global norms violations.

Not all investments of the fund are covered by the third-party data provider. In circumstances where the investment is not covered, the Investment Team will endeavour, to an extent which is fair and reasonable, to follow the investment process laid out above using publicly available information. The Investment Team may also aim to improve on gaps in data by engaging with investments to encourage improved disclosure of required information.

Due diligence

To assess ESG risks associated with an investment, an internal ESG tool is applied by the investment team. In order to ascertain the sustainability characteristics of the underlying assets, a sustainability investment thesis is compiled by the investment team.

The Gresham house Ireland Investment Committee provides oversight of the fund’s investment process. The Sustainable Investment Team also carries an annual audit to assess adherence of the Investment Team to sustainable investment related commitments including the completion of ESG Decision Tools.

Engagement policies

Engagement is part of the Manager’s sustainable investment approach, as detailed in the Engagement & Voting Policy. The Investment Team will engage with non-cash and non-government securities. The purpose of engagement can vary but includes to:

• Monitor any ESG risks identified, including controversies
• Encourage improvements in ESG shortcomings to enhance value of investments
• Assess alignment with fund themes and alignment thresholds
• Encourage greater disclosure of ESG-related information

In addition, the fund will vote all resolutions where possible. Voting for holdings in the fund are undertaken by ISS based on the ISS Sustainability Policy guidelines.

Designated reference benchmark

The fund does not designate a reference benchmark.

Supplementary Prospectus >>

Adverse sustainability impacts

Pursuant to 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”), the Fund is not classified as an Article 8 or Article 9 fund, however, disclosure in accordance with the requirements of Article 6 of SFDR in relation to the integration of sustainability risks, which is applicable to the Fund, is set out in the Prospectus. The Fund does not consider adverse impacts of investment decisions on sustainability factors, as defined under SFDR, as it is not required to do so under Article 4(3).

EU Taxonomy

The investments underlying this financial product do not take into account the EU criteria for environmentally sustainable economic activities.