Sustainability disclosure

Environment, Society and Governance are the principles underlying a range of ESG offers, which in general aim to generate long-lasting development and returns. In a context in which an increasing number of actors are involved in ESG issues, it was necessary for the European supervisory authorities to define rules that guarantee transparency to the market.

On March 10, 2021, the European Regulation 2019/2088, also known as SFDR, or “Sustainable Finance Disclosure Regulation” came into force. This regulation aims at defining common rules on transparency on two fronts: the first concerns the integration of risks and the consideration of the negative effects for sustainability in the company’s investment processes, while the second applies to the communication of ESG information relating to financial products.

The primary objective is to avoid the issue of greenwashing, along the transition path towards a more sustainable and resilient economic-financial system.

Sustainability risk and ESG policy

Kairos believes that managing the sustainability risk will allow, in the future, the enhancement of the issuers, which are less exposed to events that could significantly reduce the financial value of the investment. In the long term, it is also expected that assessing and monitoring these risks will have a positive impact on the financial instruments returns.

According to the Art. 8 of the EU Regulation 2019/2088 (Sustainable Finance Disclosure Regulation – “SFDR”), the Asset Management Company adopts guidelines that are generally applied in the management of those products that promote environmental and social characteristics, aimed to assess and monitor sustainability risks.

The same guidelines apply to assess and monitor the sustainability risks for the other products and services offered by the Asset Management Company, including the advisory service.

The Kairos “ESG Policy” contains the description of the approach, relating to sustainability risk in this context.

(ART.3 REG EU 2019/2088)

ESG policy
Principal Adverse Impacts on Sustainability

While considering this a relevant assessment, currently Kairos does not take into account Principal Adverse Impacts (PAI) of the investments on sustainability factors for none of the offered products and services, including advisory. In fact, the Asset Management Company does not own a satisfying available data amount, from a neither quantitative nor qualitative point of view, to adequately assess the potential negative impact of its investment decisions on sustainability factors. This, also in the light of a reference regulatory framework being defined.

(ART.4 REG EU 2019/2088)

Remuneration and Incentive Policy

Kairos adopts specific ESG goals, consistent with its business model, which integrates the company strategy by promoting a correct and effective sustainability risk management. The remuneration system does not encourage excessive ESG risk-taking, too.

The “Summary of the Remuneration and Incentive Policy” contains the description of the approach adopted by Asset Management Company regarding the integration of sustainability risks in this context.

(ART. 5 REG EU 2019/2088)

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