Sustainability-related disclosure (SFDR)

Financial Market Participant: IWC Investment Partners A/S, company number (CVR no.) 34465290 (the “Manager”) considers principal adverse impacts of investment decisions on sustainability factors. The present statement is a description on the policies on the integration of sustainability risks in decision making and the consolidated principal adverse sustainability impacts statement of the Manager. 

This “Principal Adverse Sustainability Impacts Statement” (the “Statement”) has been prepared pursuant to Articles 3-5 of the Regulation 2019/2088 on sustainability‐related disclosures in the financial services sector. 

Transparency of adverse sustainability impacts at entity level  

Whenever IWC IP places a financial product on the market labelled in accordance with Regulation (EU) 2019/2088, principal adverse impacts on sustainability factors of investment decisions shall be considered in accordance with the IWC IPs Sustainable Investment Policy. 

Statements pertaining to Due Diligence 

During the due diligence phase, for each investment the potential occurrence of adverse impacts that any economic activities may have on the following adverse sustainability indicators will be considered: 

  • GHG emissions 
  • Carbon footprint 
  • GHG intensity of economic activity  
  • Exposure to activities in the fossil fuel sector 
  • Share of non-renewable energy consumption and production 
  • Energy consumption intensity per high impact climate sector 
  • Activities negatively affecting biodiversity-sensitive areas 
  • Emissions to water 
  • Hazardous waste ratio 
  • Violations of UN Global Compact principles and OECD Guidelines for Multinational Enterprises 
  • Lack of processes and compliance mechanisms to monitor compliance with UN Global Compact principles and OECD Guidelines for Multinational Enterprises 
  • Unadjusted gender pay gap 
  • Board gender diversity 
  • Exposure to controversial weapon 
  • Investments in companies without water management policies 
  • Exposure to areas of high-water stress 
  • Natural species and protected areas 

In addition, the following adverse sustainability indicators, may be assessed where relevant 

  • Rate of accidents 
  • Number of workdays lost to injuries, accidents, fatalities, or illness 
  • Number of cases of severe human rights issues and incidents. 

Potential negative impacts will be identified in the due diligence processes, by applying financial product specific tools and research. As set out in the IWC IP EU Sustainable Investment Policy, any IWC IP Financial product marketed and labelled in accordance with Regulation (EU) 2019/2088, such tools and research shall, as a minimum cover: 

  • Presence of third party audited sustainability certification, such as FSC and/or PEFC-endorsed forest management certification, and other asset specific sustainability certifications. Where available, compliance with certification requirements prevents the investment activity from negatively impacting certain sustainability factors. The analysis of the relationship between the different certification requirements and the principal adverse impact indicator is conducted and stored together with the investment due diligence documents. 
  • Presence and quality of any relevant policies and procedures by contracted service providers. 
  • Written statements from any contracted service provider outlining the ability of the service provider and applicable policies to prevent negative impacts on sustainability factors. 

For each investment Decision, the assessment and the supporting documentation is produced and filed, and the findings reported to the designated investment decision body for the financial product.  

If during due diligence, an investment is deemed likely to have adverse impact on any relevant environmental or social factor, the investment must be restructured, proposed management plans revised, or the investment declined.  

Where relevant due to the nature and structuring of the investment, IWC IP may define for each product ‘Information critical for investment decisions pertaining to adverse impact on sustainability factors in order to single out one or more indicators or data points that are not allowed to be missing, negative or unclear for an investment decision to proceed. 

In conformity with the IWC IP Sustainable Investment Policy, for Financial Products marketed and labelled in accordance with Regulation (EU) 2019/2088, relevant DNSH criteria as set out in Commission Delegated Regulation (EU) 2021/2139 shall, where available, be integrated the into checks and criteria used as part of the due diligence supporting investment decisions. This applies even if the financial product is not marketed as aligned with the EU Green Taxonomy. 

Statements pertaining to holding phase 

During the holding phase, recurrent data collections are conducted to allow: 

  • Confirmation that the elements assessed during the due diligence are still in place, 
  • Monitoring of potential negative impacts on sustainability factors. 

For each financial product there will be standard operating procedures or similar which will regulate annual monitoring, reporting and disclosure cycles, and ensure that events and changes that lead to adverse impacts are identified and reported to relevant senior management and mitigative measures are considered, and if appropriate implemented.  

For every year, IWC IP will monitor and disclose information related to Articles 3-5 of Regulation (EU) 2019/2088, at entity level covering all financial products marketed and labelled in accordance with that regulation in that year. 

In addition, for a financial product marketed and labelled in accordance with Regulation (EU) 2019/2088, selected indicators must be monitored and disclosed at financial product level in accordance with Articles 6-11 of Regulation (EU) 2019/2088.  

Furthermore, as set out in the IWC IP EU Sustainable Investment Policy, monitoring of sustainability factors must also incorporate relevant DNSH criteria, where available, into Financial Products. Where a financial product is labelled as aligned to the EU Green Taxonomy, the information pertaining to criteria applicable for the selected substantial contribution as set out in articles 9-15 of Regulation (EU) 2020/852 will also be disclosed. Irrespective of EU Taxonomy alignment, all investments by Financial Products marketed by IWC IP and labelled in accordance with Regulation (EU) 2019/2088, will be subject to a climate risk assessment, as set out in the DNSH criteria and results will be integral to investment decisions and investment management. 

Transparency of remuneration policies in relation to the integration of sustainability risks  

The Manager does not encourage or reward an excessive assumption of Sustainability Risks according to its remuneration policy, available at: Remuneration Policy.  

When granting variable remuneration, the Manager takes Sustainability Risks into account. As such the Manager takes into consideration whether the employee in question has complied with policies for integration of Sustainability Risks in the investment decision process.  

Transparency of the Integration of Sustainability Risks  

For any IWC IP financial product marketed and labelled in accordance with Regulation (EU) 2019/2088 all investments must be conducted in a manner that is socially responsible and environmentally sound, based on a rigorous ESG framework, integrated throughout an investment lifecycle (due diligence, investment decision/advice, holding, and exit). Environmental, social, and governance matters are incorporated in relevant policies and procedures, distinguishing between different markets, types of investment, and level of control.  

For all IWC IP Financial Products, whether directly managed or managed by an external manager, IWC IP shall define and make available to investors in a product level Sustainable Investment policy core principles and values that are in accordance with and support IWC IP EU Sustainable Investment Policy.  This product level Sustainable Investment Policy must be supplemented by a Forest Certification Policy or similar policy (when it comes to forestry investments) and Code of Conduct, among others, and inspired by accredited international principles, guidelines, and standards. Some of these are the International Finance Corporation’s Performance Standards on Social and Environmental Sustainability, the Organization for Economic Development and Cooperation’s Guidelines for Multinational Enterprises, the United Nations Global Compact’s 10 Principles, the United Nations Guiding Principles on Business and Human Rights, the Recommendations of the Task Force on Climate-related Financial Disclosures, etc. 

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 financial performance of the investment and/or affect the market value of the investment (“Sustainability Risk”). 

All IWC IP Financial Products shall include in their ESG framework and relevant policy, a section on Sustainability Risks that informs the investment decisions of that product. The section must distinguish between four main themes of sustainability risks, that are each subdivided into specific categories. 

Risk Categories 

Land management  

  • Land health and operations 
  • Land titles and stakeholders 
  • Land conversion and high conservation value areas 

Physical 

  • Acute and chronic weather events – current and in relation to climate change 
  • Biotic and abiotic impacts 
  • Asset and operational impacts 

Governance and transition  

  • Tax and company structure 
  • Reputation and market risks 
  • Policy and legal rights 

Social and country  

  • Human rights, labor, occupational health, safety 
  • Social tensions and unrest 
  • Investment freedom and rule of law 

The Sustainability Risks associated with the Fund’s investments are an integrated part of the Manager’s investment decision process.  

Before any investment decisions are made, a detailed review will be conducted to identify the material risks associated with the proposed assets. These risks form part of the overall due diligence of any investment.  

The level of each risk is then monitored during the holding period, and significant changes in risk levels are considered and addressed. 

Managers of the products have in place engagement policies to address principal adverse sustainability impacts and sustainability risks. These policies describe the set of actions to be selected and implemented, the timelines of the actions, the decision-making process, and the escalation process.  

The Sustainability Risks set out above are further described in the Financial Products ESG Framework. 

  • Climate Disclosure Standards Board (CDSB) Framework for reporting environmental and climate change information 
  • Forests certification schemes principles’ (FSC and/or PEFC-endorsed)  
  • Green House Gas (GHG) Protocol 
  • ILO Declaration on Fundamental Principles and Rights at Work 
  • International Covenant on Civil and Political Rights 
  • International Covenant on Economic, Social and Cultural Rights.