03.03.2023 KCV Fund Coöperatief U.A.
(hereinafter the "Fund
") qualifies as an alternative investment fund within the meaning of the Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and is managed by ACT Venture Partners Coöperatief U.A.
(hereinafter the "Manager
") acting as its registered alternative investment fund manager. The Manager is a financial market participant as defined in the Regulation (EU) 2019/2088 on sustainability‐related disclosures in the financial services sector (the "SFDR
") and Regulation (EU) 2020/852 of 18 June 2020 on the establishment of a framework to facilitate sustainable investment (the "Taxonomy Regulation
"). As clarified by the European Commission in its Q&As on sustainability-related disclosures published on 14 July 2021, the Manager must comply with certain SFDR requirements applicable to registered alternative investment fund managers.
The Manager makes the following disclosures for the purposes of SFDR and the Taxonomy Regulation.
The following definitions are relevant for the purpose of this disclosure:
- A "sustainable investment" is defined as an investment in an economic activity that contributes to an environmental objective, as measured, for example, by key resource efficiency indicators on the use of energy, renewable energy, raw materials, water and land, on the production of waste, and greenhouse gas emissions, or on its impact on biodiversity and the circular economy, or an investment in an economic activity that contributes to a social objective, in particular an investment that contributes to tackling inequality or that fosters social cohesion, social integration and labor relations, or an investment in human capital or economically or socially disadvantaged communities, provided that such investments do not significantly harm any of those objectives and that the investee companies follow good governance practices, in particular with respect to sound management structures, employee relations, remuneration of staff and tax compliance.
- "Environmental objective" means the objectives as laid down in Article 9 of the Taxonomy Regulation.
- "Sustainability risk" means 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 the investment(s).
- "Sustainability factors" mean environmental or social and employee matters, respect for human rights, anti‐corruption and anti‐bribery matters. This is what is or can be impacted by investment decisions.
SFDR distinguishes three regimes:
- The grey regime (article 6 SFDR) applicable to a fund that may or not integrate sustainability risks (on the value of its investments) in its investment decision-making process but as otherwise does not fall under articles 8 or 9 of SFDR;
- The light green regime (article 8 SFDR) applicable to a fund that promotes environmental or social characteristics (provided that portfolio companies follow governance practices); and
- The dark green regime (article 9 SFDR) applicable to a fund that has sustainable (not financial) investments as its objective as defined under SFDR.
The Fund qualifies as "grey fund" under article 6 of the SFDR as it does not promote environmental or social characteristics (article 8 of the SFDR) nor does it have sustainable investments as its objective (article 9 of the SFDR). I. Manager-related disclosures Transparency of sustainability risk policies and transparency of the integration of sustainability risks – article 3(1) and article 6 of SFDR
The Manager reviews and assesses potential sustainability risks within the meaning of SFDR as part of its decision-making process and ongoing risk monitoring with respect to investments made or to be made by the Fund and has integrated such review within its internal procedures and policies, as further detailed hereafter. Relevance of sustainability risks
Sustainability risks may affect the Fund's performance having regard to the types of investments made or to be made in accordance with its investment policy and objectives, meaning that if any such risk occurs, returns on investments may be materially negatively affected as a result. Investors and potential investors should note that it is difficult to assess with reasonable certainty the probability of the occurrence of such risks and the likely impact of such materialized sustainability risks on the value of investments. Assessment process and Responsible Investment Policy
The identification and assessment of risks, including sustainability risks, will take place on an ongoing basis if and when investments are made in accordance with the Fund's investment policy and the Responsible Investment Policy (as defined below). Such review is performed by the Manager as summarized below:
- Prior to an investment decision being taken on behalf of the Fund, the Manager identify the material risks, including sustainability risks, associated with the proposed investment;
- These risks form part of the overall investment proposal to be assessed by the Manager;
- Ultimately and following its assessment, the Manager makes the relevant investment decision having regard to the Fund's investment policy and objectives and subject to the Investment Committee's approval.
The identification, assessment and, to the extent possible, mitigation of sustainability risks are embedded into the above process through the implementation of the Manager's Responsible Investment internal policy (the Responsible Investment Policy
), available here. No consideration of adverse impacts of investment decisions on sustainability factors – article 4(1)(b) of SFDR
Article 4(1) of the SFDR requires fund managers such as the Manager to provide a clear statement as to whether or not they consider the "principal adverse impacts" of investment decisions on sustainability factors i.e. environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters.
The Manager does not consider principal adverse impacts of investment decisions on sustainability factors in the manner prescribed by Article 4(1) of the SFDR in particular due to the fact that (i) no reliable and sufficiently available or accessible data is available to perform such impact measurement and provide the mandatory reporting imposed by the regulatory technical standards in a consistent manner; (ii) the investment strategy and objectives of the Fund and therefore its overall portfolio are neither ESG-focused nor, in the opinion of the Manager, likely to have an impact on sustainability factors and (iii) the underlying investments are not generally required to report on such factors in the manner prescribed by SFDR.
The Manager does not intend to consider such principal adverse impacts in the near future. Transparency of remuneration policies in relation to the integration of sustainability risks – article 5(1) of SFDR
For the purposes of article 5(1) of SFDR, the Manager declares that it has not put in place a remuneration policy in light of the fact that it qualifies as an alternative investment fund manager and thus does not fall under such requirement under the AIFMD. II. Fund-related disclosures Transparency of other financial products in pre-contractual disclosures and in periodic reports – article 7 of the Taxonomy Regulation
The investments underlying this financial product do not take into account the EU criteria for environmentally sustainable economic activities.