“NO PRINCIPAL ADVERSE IMPACTS CONSIDERATION STATEMENT”AND “SUSTAINABILITY RISKS POLICY”
FUNDROCK FRANCE AM S.A.S
FundRock France AM (FFAM) is authorised by the Autorité des marchés financiers (AMF) to provide AIFM services to a range of collective investment schemes domiciled in, but not limited, to France and Luxembourg.
As per Regulation (EU) 2019/2088 (“SFDR”), FFAM is defined as a “financial market participant”.
Per article 3 of SFR a “financial market participant” shall publish information about their policies on the integration of sustainability risks in their investment decision-making process. “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 an investment.
Further, per Article 4 of SFDR a “financial market participant”, where the principal adverse impacts (“PAI”) of investment decisions are considered, is required to publish and maintain on its website 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”.
This Statement has been developed in accordance with the provisions of Article 4 and article 12 of the Delegated Regulation (EU) 2022/1288, while also taking into consideration Article 7 of SFDR on the transparency of PAI at product level.
FFAM retains the portfolio management function of their funds in that circumstance appoint systematically a third-party investment advisor but can also delegates it to a qualified third party portfolio manager (the “Portfolio Manager”). Therefore, the “investment decisions” as defined under SFDR are delegated to these Portfolio Manager,
subject to FFAM initial due diligence and ongoing oversight.
FundRock as a Group (hereinafter called the « Company ») has a robust Code of ethics Policy in place (which includes: Personal conduct and business integrity; Safety, health and wellbeing, company security). We closely monitor cyber risks and provide training to all employees. In addition, we are dedicated to protect human rights and fair labour practices and to promote employee diversity. The Company also supports anti-bribery and anti-corruption by having its own Anti-money Laundering policy in place. Our mother company FundRock Management Company SA is an UNPRI member as a service provider. Its commitment applies to all group entities. In addition, as we have integratedAPEX Group this year, we will be part of the APEX reporting.
In terms of the social factors, one of the key topics is the importance of employee health and wellbeing. The Company recognises that alcohol or drug misuse is a health problem. The Company is committed to minimising the risks and nuisance associated with smoking as far as possible within the workplace. In addition, the Company acknowledges and recognises the importance of identifying and reducing workplace stressors.
The Group promotes and participates in charitable events and donations and encourages employees to actively partake, e.g. summer dress down initiative, Operation Christmas Child etc. We also encourage and support our employees to engage themselves in any physical training and sport events (e.g. ING Marathon, Touch Rugby League, etc.).
In terms of environmental factors, we are taking numerous actions to raise awareness and have a positive impact to the environment, some examples to follow. We promote the use of recycle bins, and have given staff reusable thermal coffee mugs and tumblers. We aim at becoming more and more paperless by using advanced technology in
order to automate processes. Our salesforce is equipped with tablets so that they can go to pitches without using paper copies. We have an in-house developed, secure space for storing documents online and having them accessible from a variety of devices to discourage printing. For energy saving, our phone screens go to sleep every
day at 6pm.
Although ESG cannot be embedded in our business offering, we engaged in multiple discussions with our clients (investment manager/owners) who have been very active in the field and are sharing best practices with clients who might be lagging. Our role as a service provider signatory is to promote PRI principles and ESG criteria to our clients who make the investment decisions. In 2020/2021 with the implementation of SFDR, we have engaged in discussion
with our investment management delegates, advisor and initiator regarding the integration of Principal adverse impact and sustainability risks within their investment decision. We had also extensive discussion to incentivise initiator of the funds to launch article 8 or 9 funds.
Integration of Sustainability Risks (Article 3 of SFDR)
In accordance with the Commission Delegated Regulation (EU) 2021/1255 of 21 April 2021, FFAM takes into account
sustainability risks in the investment decision. This is detailed in the pre-contractual disclosures in accordance with
article 6 of SFDR.
FFAM ensures as part of its due diligence process and ongoing oversight that :
- Sustainability Risk is a part of the Fund’s investment process;
- Pre contractual disclosures are consistent with the investment objectives of the funds;
- Sustainability Risk is considered as part of a broader analysis of individual issuers, using internal and external
inputs helping to identify exposure to Sustainability Risks, preparing for company engagement and
collaborating on new research inputs based on data provided by data providers;
- The Portfolio Manager draws upon a wide variety of internal and external research to assess any potential
impact on the value of the assets over the time horizon of the Fund.
In instances where FFAM retains portfolio management and a Financial Advisor is appointed, FFAM considers sustainability risks within their investment decision in respect of those funds, provided that the steps described in 1-4. FFAM also acknowledge that in certain instances, the Financial advisors may publish information on their own website in respect of sustainability risks integration.
FFAM has also enhanced its existing risk management framework to oversight the integration of sustainability risks.
The risk management will oversee the integration of sustainability risks by Portfolio Managers on an ex-post basis.
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No Integration of Principal Adverse Impacts (Articles 4 and 7 of SFDR)
FFAM is below the 500 employees threshold set out in articles 4.3 of SFDR Regulation does not consider Principal
adverse impact (PAI) at entity level.
FFAM acting as AIFM of many sponsors considers that non-financial data is still not available in satisfactory quality and quantity to allow it to adequately assess the potential adverse impact of all their investment decisions on sustainability factors in particular for unlisted assets.
However, as Funds, to which FFAM act as AIFM, follow a number of different investment strategies with varying consideration of environmental, social and governance (ESG) and sustainability factors, PAI can be considered on case by case at the level of funds.
Should Portfolio Managers wish to consider PAI in respect of the Funds in line with Article 7 of SFDR, FFAM shall ensure that:
- The Delegated Manager has the appropriate infrastructure in place to report on PAI on an ongoing basis;
- Where PAI are to be considered in respect of the Funds, the appropriate disclosures are made in the pre-contractual documents in line with SFDR by 31 December 2022;
- The list of Funds for which PAI are considered is available on request;
- The processes, systems and procedures in place to consider and report on PAI in respect of each Funds shall
remain subject to the FFAM’ periodic due diligence;
- The Portfolio Manager also provides or published on its website appropriate disclosures in accordance with
Article 4(1) and (2) of SFDR, while also considering the associated Regulatory Technical Standards once
adopted by the European Commission, in respect of the Funds;
- The periodic reports of the Funds contain sufficient and appropriate information as to the assessment of
Where PAI are not considered in respect of the Funds to which FFAM act as AIFM, FFAM shall ensure appropriate disclosures are contained within the relevant pre-contractual documents. For further information as to why PAI are not considered in respect of a particular Funds, please refer to the prospectus/supplement of that Funds.
In instances where FFAM retains portfolio management, FFAM may consider PAI in respect of those funds, provided that the steps described in 1 to 6 of the above are carried out in an equivalent manner with appropriate disclosures made on this website or made available. FFAM also acknowledge that in certain instances, the Portfolio Managers may publish information on their own website in respect of PAI in respect of the Funds.
This position shall remain subject to ongoing review in line with market practise and regulatory developments. FFAM shall periodically reassess the integration of sustainability risks, PAI statements, policies adopted by the Portfolio Managers and reporting made in respect of the Funds to ensure their continued appropriateness.
This Statement is subject at least to annual review.
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