Disclosure Pursuant to the Sustainable Finance Disclosure Regulation (EU) 2019/2088
Blue Horizon is providing the following information solely to comply with the requirements 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. It does not constitute an offer to sell or a solicitation of an offer to buy securities.
The Sustainable Finance Disclosure Regulation (Regulation (EU) 2019/2088) (“SFDR” or the “Regulation”) entered into force on 10 March 2021. The Regulation requires financial market participants, like Blue Horizon Corporation AG and its subsidiaries (“BH”), as an investment firm which provides portfolio management to present information to investors with regards to: (i) the integration of sustainability risks in their investment decision-making process; (ii) the consideration of principal adverse sustainability impacts of investment decisions on sustainability factors; (iii) remuneration policies in relation to the integration of sustainability risks; and (iv) the promotion of environmental or social characteristics, and of sustainable investment within their websites.
I. Transparency of Sustainability Risk Policy
The statement below specifically addresses Article 3(1) of the Regulation: “Financial market participants shall publish on their websites information about their policies on the integration of sustainability risks in their investment decision‐making process.” This statement provides a summary of Blue Horizon’s Remuneration Policy for the purposes of Article 3 of the Regulation.
Blue Horizon’s Sustainability Risk Policy applies in respect of its investment decision making and also in respect of the provision of investment advice and so references to investment decision making should be read as including the provision of investment advice. Blue Horizon uses the definition of sustainability risk as described in Article 2 (22) of the Sustainable Finance Disclosure Regulation (Regulation (EU) 2019/2088) (”SFDR” or “the Regulation”): “an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of an investment”. Blue Horizon believes that integration of sustainability risk considerations in the investment decision-making process is an important part of risk management. For Blue Horizon, sustainability risks are risks which, if they were to crystallise, would cause a material negative impact on the value of its portfolio companies.
Through its proprietary Sustainability framework, Blue Horizon uses a bi-focal lens for sustainability, with Impact and ESG (Environmental, Social, and Governance efforts) assessed distinctively through the investment process. Before any investment proposals are made on behalf of any strategy or fund that BH advises, the relevant investment advisory team will, subject to BH’s approval, complete a process that identifies the material risks associated with each proposed investment; these will include relevant and material sustainability risks. Blue Horizon considers these risks as part of its risk management process for the strategies or funds it advises, starting with an overall assessment of the likely positive impacts and risks associated with investments pursuant to the relevant strategy’s investment strategy and objectives and leading to specific investment proposals submitted to BH’s Investment Committee (“IC”). The IC assesses all the identified risks, including sustainability, alongside other relevant factors set out in the proposal. Following its assessment, the investment committee makes investment proposals having regard to the relevant strategy or fund’s investment strategy and objectives. Throughout the entire process, relevant sustainability considerations are identified and assessed using the same process as is applied to other relevant risks affecting the investments made on the behalf of the fund or strategy.
II. Principal Adverse Sustainability Impacts Statement
The statement below specifically addresses Article 4(1) of the Regulation: “Financial market participants shall publish and maintain on their websites where they consider principal adverse impacts of investment decisions on sustainability factors, a statement on due diligence policies with respect to those impacts, taking due account of their size, the nature and scale of their activities and the types of financial products they make available”.
Blue Horizon considers principal adverse impacts of its investment proposals on sustainability factors. The statement below is a summary of the principal adverse impacts statement of Blue Horizon. By June 30th 2023, Blue Horizon shall publish the information referred to in Article 4 of the Regulation in the format set out in Table 1 of Annex I and in the order as described in paragraph 2 of Article 4 of the Final Report on draft Regulatory Technical Standards (“RTS”).
Blue Horizon uses the definition of principal adverse sustainability impacts as defined within Annex III of the Regulation: “Principal adverse impacts are the most significant negative impacts of investment decisions on sustainability factors relating to environmental, social and employee matters, respect for human rights, anti‐corruption and anti‐bribery matters.”
Blue Horizon considers the principal adverse impacts of its investment proposals on sustainability factors throughout all steps of the investment process and portfolio monitoring practices, to prevent the likelihood of adverse impacts materialising and leading to irreparable environmental and social harm.
III. Remuneration Policy in relation to the integration of Sustainability Risks
The statement below specifically addresses Article 5(1) of the Regulation: “Financial market participants and financial advisers shall include in their remuneration policies information on how those policies are consistent with the integration of sustainability risks, and shall publish that information on their websites.” This document provides a summary of Blue Horizon’s Remuneration Policy for the purposes of Article 5 of the Regulation.
Blue Horizon’s Remuneration Policy (the “Policy”) sets out the general principles regarding the remuneration of personnel within BH, taking into account the Group’s strategy, objectives and Sustainability Risk Policy, in order to align the long-term interests of all stakeholders (shareholders, investors, employees and the organization as a whole) and contribute to long-term sustainable value creation. Blue Horizon’s remuneration practices promote sound and effective risk management with respect to sustainability risks, ensuring that the structure of remuneration does not encourage excessive risk-taking with respect to sustainability risks.
The main principles of the Policy are the following:
i. Reinforcing Blue Horizon’s strategy, objectives, values and long-term interests;
ii. Ensuring a connection between results, remuneration and performance evaluation;
iii. Successfully preventing excessive risk taking; and
iiii. Committing to gender diversity through equal opportunities.
IV. Sustainability-Related Disclosures
The PDFs below specifically address Article 10(1)of the Regulation: “Financial market participants shall publish and maintain on their websites the following information for each financial product referred to in Article 8(1) and Article 9(1), (2) and (3)”.