SFDR disclosures
The European Union’s Sustainable Finance Disclosure Regulation (SFDR) has come into force requiring, amongst other things, asset managers to make certain sustainability-related disclosures on their websites with respect to in-scope products.
Gresham House Asset Management Limited
Below are links to the website disclosures of all in-scope products under the management of Gresham House Asset Management Limited. Note that the website disclosures of one in-scope product will differ from those of another in-scope product.
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 Gresham House Forestry Fund I (Ireland) LP (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 statement
As a signatory to the UN-supported Principles for Responsible Investment, the Portfolio Manager has a clear commitment to investing sustainably as an integral part of its business strategy. Sustainability including Environmental, Social and Governance (ESG) considerations, are integrated into the selection, evaluation, governance and management processes across the lifecycle of each investment of the Partnership.
Forestry investments sourced and managed by the Portfolio Manager for the Partnership are very long-term and the Portfolio Manager sets out to proactively improve the lifespan and value of such assets of the Partnership through sustainable forest management.
Environmental and social characteristics
All land and forests acquired by the Partnership will be managed in line with the commitments and targets made in the Portfolio Manager’s Forest Charter (the “Charter“) (see “1. The Gresham House Forest Charter” below).
All land and forests acquired by the Partnership will be managed by Coillte, and all will be certified under the FSC® ¹ (Forest Stewardship Council®), and 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 them (with the exception of newly acquired land, which may not yet be certified at the time of purchase but in respect of which the Portfolio Manager will aim to ensure that 100% of forests thereon will be certified within a reasonable timeframe).
The table below sets out the key sustainability-related commitments of the Partnership and how these will be measured and monitored over time (many of which are also set out in the Charter).
networking sites.
Sustainability commitments | Sustainability indicators (KPIs) |
All forests invested in by the Partnership will be certified under the FSC and PEFC | Area of forest land certified to a third-party certification standard (%) |
The Partnership will invest in the creation of new productive woodland | New trees planted (excluding trees planted for restocking) in hectares and/or number of trees |
100% of timber sold from forests under management in which the Partnership is invested will be certified under national or international forestry standards | Timber sold that is certified (%) |
The long-term carbon stock of all forests in which the Partnership is invested will be managed and where possible the carbon sequestration of all such forests will be increased over the period under management | Forest carbon sequestered (tCO2e) |
The operational carbon footprint of all forests under management in which the Partnership is invested will be measured and operational emissions will be reduced over time, where possible | Forest operational emissions (tCO2e) |
The biodiversity of all forests under management in which the Partnership is invested will be maintained, conserved and enhanced and opportunities for enhancing biodiversity will be considered in forest management plans for all forests in which the Partnership has invested. | Area of forestland managed for biodiversity (%)Area of forestland allocated to a single species (%)Area of forest land allocated to native species (% ha) |
Sustainable investment process and commitments
The integration of sustainability considerations, including ESG factors, into the investment decision-making process followed in respect of the Partnership is underlined by the following:
1. The Gresham House Forest Charter
All forestry assets of the Partnership 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 & Standards
The Charter also reflects the Portfolio Manager’s commitment to apply the International Finance Corporation (IFC) exclusion policy as relevant to forestry assets[1] (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 ESG Decision Tool (see next section) and require the Portfolio Manager to ensure that no new acquisition of the Partnership is in breach of the exclusions at due diligence stage.
[1] http://www.ifc.org/exclusionlist
2. The Portfolio Manager’s ESG Decision Tool
All investments are screened using the Portfolio Manager’s Forestry ESG Decision Tool (the “ESG 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 Porftolio Manager’s resources, tools and practices are proprietary given the complexity and nature of the asset class and are informed by its experience over the last 40 years. The ESG 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 the Partnership’s investments in a consistent manner, in line with the Portfolio Manager’s sustainability-related commitments.
The ESG Tool is based on the ten themes in the Portfolio Manager’s Sustainable Investment Framework and several sub-factors are considered under each broader ESG theme (see table below entitled “Sustainable Investment Framework Application”). The purpose of the ESG Tool is to support the Portfolio Manager in identifying potential, material ESG risks that need to be managed and mitigated, and to help shape the due diligence process prior to investment by the Partnership. The ESG Tool will highlight if an investment is considered to be in breach of the Exclusion Policy (in which case no investment will be made in that asset) and otherwise aims to provide a rational and replicable assessment of key ESG risks which should be considered prior to investment, and to assist with ranking the significance of each risk.
The data sources relied on for the consideration of ESG risks and opportunities pre-investment and as part of the ongoing management of assets include information provided by the Portfolio Manager’s own specialist investment team (see point 5 further below), the Woodland Manager and any other woodland managers appointed by the Partnership and/or third-party experts such as ecologists and carbon consultants (particularly in relation to biodiversity and carbon-related data).
Sustainable Investment Framework Application
Environmental | ||
Climate changes and pollution | Natural capital | Waste Management |
Optimisation of carbon sequestration and stores; reduction in operational emissions; climate transition opporunities; pesticide minimisation | Optimisation of woodland biodiversity; protection of priority habitats and species; considered pest, disease, soil and water management approach | Sustainable management of waste arising from forestry operations |
Social | |||
Employment, health, safety and well-being | Marketplace responsibility | Supply chain sustainability | Community care and engagement |
Worker's rights protected; commitment to discrimination free, safe and fairly-paid employment and employee training | Certification of forests in line with sustainable forestry standards; production of certified timber; transparent and robust carbon credit generation | Alignment of suppliers to our own sustainability commitments; alignment of woodland managers to certification standards | Good practice community relations and engagement; respect of local community rights; public access, education and recreation |
Governance | ||
Governance and ethics | Risk and compliance | Commitment to sustainability |
Good forestry management practices; clear policies and accountability; ethical business conduct | Robust risk, compliance and auditing processes | Measurement and monitoring of key sustainability metrics; proactive management of potential negative ESG impacts |
3. Forest Certification and Standards
As committed to in the Charter, all forestry assets of the Partnership will adhere to relevant forestry standards and will be certified to appropriate sustainable forest certification standards. These standards provide detailed guidance on the principles that the Portfolio Manager adheres to in planning, management, felling and restocking cycles as well as the wider way in which forest enterprises are managed.
In Ireland, forests are certified under the PEFC (Program of the Endorsement of Forest Certification), or the FSC (Forest Stewardship Council) standards. The Portfolio Manager commits to ensuring that all forestry assets of the Partnership are ultimately certified under one of these methodologies and aims to seek dual certification across the entire portfolio of such assets.
Irish forestry assets will be managed in accordance with the Forestry Standards Manual in conjunction with the Irish National Forest Standard, the code of Best Forest Practice – Ireland and the suite of mandatory environmental guidelines and requirements published by the Department of Agriculture, Food and the Marine.
4. Management plans
Management plans are drawn up for each asset of the Partnership, setting out clear management objectives spanning both commercial and sustainability outcomes and how the asset will be managed to meet these within its given prevailing conditions. Performance measurements are integrated into the plans, which are subsequently reviewed on an annual basis.
The management plans will include plans to meet the Partnership’s sustainability commitments and to address any sustainability-related risks or opportunities identified from the ESG Tool analysis and will align to relevant standards or certification requirements.
5. Expertise and oversight
The Portfolio Manager has significant specialist expertise, including professional qualifications from the Institute of Chartered Foresters, spanning both sustainable forestry practices and sustainable investment. The team undertakes regular relevant continuing professional development to keep its knowledge and outlook up to date and will continue to invest in developing its expertise and good practice in relation to sustainable forestry asset management. External experts (e.g. ecologists and academics) may also be consulted by the Portfolio Manager in this regard.
All forests and new planting sites acquired by the Partnership will be managed by qualified, experienced forest managers, known to and selected by the Portfolio Manager. All forests are inspected on a regular basis to ensure the highest quality of woodland and environmental management. Forests will also be independently audited by the relevant certification bodies.
The Portfolio Manager has a dedicated Sustainable Investment Team. This team provides support in relation to the evolution of processes around sustainable investing applied by the Partnership. The Sustainable Investment Team will also carry out regular auditing of ESG processes to ensure they meet the sustainability-related commitments of the Partnership.
Mandatory SFDR disclosures
Assessment of Principal Adverse Impacts of Investment Decisions on Sustainability Factors
The Portfolio Manager has elected to exercise its discretion under Article 4(1)(b) of SFDR not to commit to considering the adverse impacts of investment decisions of the Partnership on sustainability factors in the manner specifically contemplated by Article 4(1)(a) of the SFDR but will continue to consider and manage these impacts in line with the Charter and its Sustainable Investment Policy.
Taxonomy Regulation
The investments underlying the Partnership do not take into account the EU criteria for environmentally sustainable economic activities, as set out in the Taxonomy Regulation. Accordingly, 0% of the Partnership’s investments are in economic activities that qualify as environmentally sustainable under the Taxonomy Regulation. Based on a high-level assessment, it is expected that, in pursuing their environmental characteristics or objectives, the Partnership’s investments will contribute to the following environmental objectives as set out in the Taxonomy Regulation: climate change mitigation and climate change adaptation. The “do no significant harm” principle applies only to those investments underlying the Partnership that take into account the EU criteria for environmentally sustainable economic activities. As set out above, the Partnership’s investments do not currently take into account the EU criteria for environmentally sustainable investments.
Gresham House Asset Management Ireland Limited
Entity-level SFDR Disclosures
Under the EU Sustainable Finance Disclosure Regulation (SFDR), Financial Market Participants (FMPs) are required to make sustainability-related disclosures on their websites. This section provides disclosures required under the SFDR.
Sustainability Risk Policies
At Gresham House, we have developed a clear sustainable investment policy and are working hard to embed our approach consistently and effectively in line with our commitments, aiming to always be best in class.
Group Sustainable Investment Policy
The Gresham House Group Sustainable Investment Policy is applicable to Gresham House Asset Management Ireland Limited (Gresham House Ireland).
Across all our asset classes, we believe that understanding and, wherever possible, improving on environmental, social, economic and governance (ESG) performance drives long-term value, and we aim to work proactively with management teams and key stakeholders to make a positive change over time.
Our asset class policies
The Gresham House, Ireland Sustainable Investment Policy describes the sustainable investment commitments of the Manager1 for all unit trusts2.
1. The Manager refers to Gresham House Asset Management Ireland Limited (Gresham House Ireland), the Alternatives Investment Fund Manager (AIFM)
2. A Unit Trust is an arrangement made for the purpose of providing facilities for the participation by the public, as beneficiaries under a trust, in profits or income arising from the acquisition, holding, management or disposal of securities or any other property.
Gresham House, Ireland Sustainable Investment Policy
The Gresham House Commercial Real Estate Sustainable Investment Policy describes the sustainable investment commitments of the Manager1 for the Gresham House Commercial Property Fund.
1. The Manager refers to Gresham House Asset Management Ireland Limited (Gresham House, Ireland), the Alternatives Investment Fund Manager (AIFM)
Sustainability Risk Integration
The Manager integrates sustainability risks as part of its investment decision-making process for all funds.3 The Manager believes that incorporating sustainability factors into investment decision making protects value and drives resilience of investments and can create compelling investment opportunities.
3. A sustainability risk integration model is currently being developed in respect of the Gresham House Commercial property fund.
A sustainability risk is an ESG event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of an investment. The likely impacts of sustainability risks on the returns of the fund will depend on the fund’s exposure to investments that are vulnerable to sustainability risks and the materiality of the sustainability risks.
The integration of sustainability risk throughout the investment lifecycle is key to the overall success of the funds under management. Sustainability risk assessment is part of the pre-investment due diligence process carried out by Investment Teams. Investment Teams are required to analyse how certain ESG factors may impact the investment case and the fund Net Asset Value. This is done through the application of the ESG Decision Tool (‘the Tool’).
The Tool is a key component of Gresham House’s approach to ESG integration and is applied by all investment divisions. The Tool aims to support the identification of a broad range of ESG risks which may materially impact on a proposed transaction. It does so by prompting a consideration of various aspects underlying ten core ESG themes laid out in the Sustainable Investment Framework. These themes include but are not limited to Governance & Ethics, Marketplace Responsibility, Climate Change and Pollution, Supply Chain Management and Employment, Health, Safety & Wellbeing.
The Tool will not tell the investment teams whether to invest or not, instead it aims to provide a rational and replicable assessment of key ESG risks which should be considered prior to investment, and to help rank the significance of each risk. The Tool also provides a way of summarising material ESG issues, which can then be tracked and monitored over time, and include actions that can be taken to mitigate those risks throughout the holding period.
The findings from the tool can be used to identify topics to engage investments , with the aim of increasing shareholder value over time and reducing downside risk. The findings may also drive voting decisions as a means of managing risk identified, if relevant to the investment strategy.
Adverse impacts of investment decisions on sustainability factors
Adverse impacts of investment decisions on sustainability factors are not considered by Gresham House, Ireland (the Manager) and the Manager does not intend to consider adverse impacts for its investment strategies as it is not required to do so under the SFDR Article 4.
At product level, it is our belief that the consideration of sustainability risks through ESG integration, as defined in the Gresham House Ireland Sustainable Investment Policy, is sufficient to demonstrate a consideration of sustainability risks and impacts for funds which do not have sustainable investment as their objective.
Remuneration policies
Sustainable investment-related objectives form part of employee variable remuneration review as detailed in Gresham House Asset Management Ireland Limited’s (Gresham House, Ireland) Remuneration Policy.
This extract is a carve out of the Gresham House, Ireland’s Remuneration Policy for the purpose of investor awareness and SFDR compliance.
Gresham House, Ireland is authorised by the Central Bank of Ireland as an Alternative Investment Fund Manager pursuant to the European Union (Alternative Investment Fund Managers) Regulations, 2013.
Variable Remuneration
Performance management is measured by senior management on both a quantitative and qualitative basis with performance evaluations taking place on a mid-year and an annual basis. Employees may be eligible for a discretionary annual bonus payment. The level of bonus will depend on the performance of the individual, the Investment Team as a whole and the overall firm performance and takes into account financial as well as non-financial criteria. Gresham House, Ireland gives appropriate consideration to financial and non-financial criteria, including performance against sustainable investment-related objectives.
The annual bonus payment is at the total discretion of the firm. To reinforce the emphasis on sustainability, the firm not only considers what was achieved, but how the results were achieved when deciding on variable remuneration.
The Gresham House, Ireland remuneration principles are designed to attract a diverse and talented workforce, align reward with consideration of risk factors and support appropriate and controlled risk taking in line with fund objectives and strategies.
Product-level Sustainability-related Disclosures
Under the SFDR, Financial Market Participants (FMPs) are required to make certain sustainability-related disclosures on their websites with respect to investment products. Below are links to the website disclosures of all in-scope products under the management of Gresham House, Ireland. Note that the website disclosures of one in-scope product will differ from those of another in-scope product.
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.
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.
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.
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.
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.