Sustainability
INFORMATION PURSUANT TO ARTICLES 3, 4, 5, 10 of Regulation (EU) 2019/2088 (the “SFDR”)
Introduction and definitions
As established by Regulation EU 2019/2088 of the European Parliament and of the Council of 27 November 2019 (SFDR) on sustainability disclosures in the financial services sector, the purpose of this communication is to highlight the choices made by Silver Fir Capital with specific reference to:
• information about the policies on sustainability risk integration adopted in the investment decision-making processes (art. 3 SFDR);
• information on how the SGR considers or does not consider the main negative effects of investment decisions on sustainability factors (art. 4 SFDR);
• information on how the SGR has aligned its remuneration policy with its sustainability risk management objectives (Art. 5 SFDR).
Some definitions useful for understanding this communication are provided below.
• Sustainability Risk: an environmental, social or governance event or condition that, if it occurs, could cause a significant actual or potential negative impact on the value of the investment;
• Sustainable Investment: An investment in an economic activity that contributes to an environmental objective, as measured, for example, by key resource efficiency indicators concerning energy use, use of renewable energy, use of raw materials and water resources and land use, waste production, greenhouse gas emissions as well as 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 the fight against inequality or which promotes social cohesion, social integration and industrial relations, or an investment in human capital or in economically or socially disadvantaged communities provided that such investments do not significantly harm any of these objectives and that the companies benefiting from such investments comply with good governance practices, in particular with regard to sound management structures, employee relations, staff remuneration and compliance with tax obligations.
• ESG: Enviromental; Social; Governance.
Art.3
Transparency of sustainability risk policies.
Silver Fir Capital intends to direct its investment choices towards sustainable development objectives, and to pursue the Sustainable Development Goals (SDGs) defined by the United Nations General Assembly.
In pursuing this choice, Silver Fir is inspired by the Principles for Responsible Investment (PRI) promoted by the United Nations in 2019 and has defined internal policies and procedures that guide the integration of ESG factors into investment choices.
Silver Fir believes, in fact, that the consideration of ESG factors in every investment choice favours sustainable economic and social development and contributes, at the same time, to increasing the financial value of managed portfolios and to reducing the related risks. Identifying and managing environmental, social and governance risks is part of the SGR’s fiduciary duty to protect the value of all investors’ assets.
Specifically, Silver Fir promotes through its investments not only environmental sustainability objectives, but also the creation and development of real estate initiatives with social aims, which see the involvement and development of the local communities concerned (consider for example investments in university and school buildings, social housing, hospitals, clinics and social residences for the elderly).
The Company’s sustainable investment strategy applies to all funds that expressly state that they pursue sustainable investment objectives, in line with Articles 8 and 9 of Regulation (EU) 2019/2088 (SFDR).
ESG risks and opportunities deemed material to the investment are adequately assessed in the initial stages of investment opportunity screening and due diligence and are monitored on an ongoing basis during the asset management phase.
• The main exclusion criteria considered and applied by the SGR with reference to all the investment opportunities of the managed AIFs concern the following areas, as updated and integrated from time to time also in the light of the evolutions of the regulatory framework of reference: real estate (i) intended for the production, transformation and/or storage of fossil fuels and/or tobacco and/or related products, (ii) characterised by the presence of polluting materials – where it is not possible to remedy such pollution as an activity part of the BP of the investment ); development of projects in protected natural areas or which have a negative impact on cultural heritage sites
• activities prohibited by the biodiversity conservation legislation of the country where the project takes place or by international conventions relating to the protection of biodiversity or cultural resources;
• real estate and/or development operations related to economic activities considered controversial and/or contrary to international treaties and conventions;
• real estate dedicated to energy intensive production activities, not fuelled by renewable sources
Furthermore, the Company considers the exclusion of tenants involved in systematic violations of human rights and/or operating in sectors deemed not ‘socially responsible’, i.e. characterised by clear involvement in the production and/or commercialisation of
• manufacture of weapons identified and banned by international treaties and conventions;
• pornography and prostitution;
• substances banned in the jurisdiction where the property is located;
• products/services with negative impacts on endangered or protected wildlife;
• construction of new coal-fired power plants.
The above lists may be expanded to include additional exclusion criteria. Exceptions may also be considered in cases where the subsequent reconversion/revaluation of the building’s activity is envisaged with the objective of achieving high and certifiable energy efficiency performance within a defined time horizon.
Finally, in order to support due diligence and subsequent monitoring activities, a framework for assessing ESG risks and environmental and social impacts was introduced. The application of this framework also facilitates the definition of plans for interventions to be carried out on the Funds’ current real estate assets, in line with the strategies of each AIF, highlighting improvements that generate positive impacts from an environmental or social point of view.
Art.4
Transparency of adverse sustainability impact at entity level.
Silver Fir Capital, in compliance with Art. 4 of the Regulation (EU) 2019/2088 (SFDR) on Sustainability Disclosures in the Financial Services Sector, has decided to adopt a “comply” approach with respect to the consideration of the main adverse effects of its investment decisions on ESG sustainability factors for funds pursuing sustainable investments.
In support of this decision, the SGR, in carrying out its investment activities, takes into consideration the indicators introduced by the ESAs in the latest version of the Regulatory Technical Standards, aimed at measuring the negative impacts of investment decisions on sustainability factors, including the two mandatory indicators for the Real Estate sector:
• Exposure to fossil fuels of real estate assets;
• Exposure to energy inefficient real estate assets
and three additional indicators:
• Waste generation in operations;
• Lack of supplier code of conduct;
• Lack of anti-corruption policies.
The Company maintains a proactive approach in defining the indicators and metrics with which to determine the aforementioned impacts, while at the same time monitoring the evolution of relevant regulatory provisions.
Art. 5
Transparency of remuneration policies in relation to the integration of sustainability risks.
Regulation (EU) 2019/2088 requires the SGR to include in its remuneration and incentive policies information on how they have been integrated by also taking into account sustainability risks.
The SGR has therefore reviewed its remuneration and incentive policies in order to highlight the interconnection between the incentive system and the pursuit of sustainability objectives.
For more details on ESG risk management, see the information on sustainability risk policy in Article 3 SFDR.
Governance
Board of Directors
Paolo Mevio – Chairman
Lorenzo Baroni – Managing Director
Andrea Portella – Managing Director
Carlo Riganti – Independent Director
Alessandra Manzuoli – Independent Director
Board of Statutory Auditors
Silvio Necchi – Chairman
Andrea Milia – Member
Mattia Bock – Member
Code of Ethics
