With the purpose of disclosing the sustainability compromises adopted in the funds undertaken investments, GOLDEN MONARQUE (GM), in accordance with the Environment, Social and Governance (ESG) criteria, has adopted a Sustainability Policy.
GM Sustainability Policy, as well as its implementation, complies with the regulatory framework in place, namely with the 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 (Sustainable Finance Disclosure Regulation, briefly referred to as “SFDR Regulation”).
Sustainability has a strategic importance for GM and the contents of GM Sustainability Policy is a corollary of GM fiduciary duties towards the investor in the equity funds under GM management.
Sustainability principles allows GM to identify risks related to the investments and may bring investment long term value creation opportunities for the investors in the equity funds under management.
GM is committed with the sustainability principles, and therefore ensures that:
- the following sectors are, directly or indirectly, excluded from the investments of the private equity funds: a) radioactive materials (except for medical use); b) activities which are deemed illegal under the laws and regulations of a relevant State, under international agreements and conventions, or subject to phase-out or international prohibition; c) corruption, money laundering, financing of terrorism and the proliferation of weapons of mass destruction; d) enforced labour and child labour; e) pornography and prostitution; f) human rights violations;
- the equity funds investment policies comply with GM Sustainability Policy;
- the commercial object of the companies in which GM invests on behalf of the private equity funds comply with GM Sustainability Policy.
GM does not manage private equity funds that promote light green products, i.e. products with environmental or social characteristics, or a combination of those characteristics, or dark green investments, i.e. sustainable investment being the objective and the index designated as a reference benchmark, as provided in articles 8.º and 9.º of the SFDR Regulation. This information will be disclosed in the pre‐contractual documents (LPA) to be provided to the investors, in accordance with the SFDR Regulation.
General principles and objectives
GM is committed with ESG responsible investment criteria.
GM takes into account the sustainability risks, considering the nature, the scale and the complexity of the GM and the fund’s activities, therefore GM does not comply with the requirements referred in numbers 3 and 4 of article 4 of the SFDR Regulation, applicable to larger institutions.
GM undertakes to keep the disclosure of the Sustainability updated.
GM ESG objectives in the execution of the investment decisions on behalf of the funds, without prejudice to the specific features of the investment policy of each fund under management, are the following:
- In the field of environmental sustainability: climate change mitigation; climate change adaptation; prevention and control of pollution; sustainable use and protection of the resources, transition to a circular economy; protection and restoration of biodiversity and ecosystems;
- In the field of social sustainability: Prohibition of discrimination, based on gender, diversity, human rights violations, child labour, unsustainable labour practices in the global supply chain, slavery, violation of rules concerning health and safety at work, violation of freedom of association and freedom of expression, violation of rights to health and to access to medication, violation of consumer protection laws;
- In the field of the corporate governance of the companies target of the fund’s investments: Shareholder’s rights; structure of directors’ remuneration; composition of the Board of Directors; independence and effectiveness of functions of the members of the supervisory bodies.
Declaration about the non-consideration of adverse impacts of investment decisions on sustainability factors
Article 4.º of the SFDR Regulation determines that financial market participants shall ensure the transparency of considering or not adverse impacts of their investment decisions on sustainability factors, establishing the principle “comply or explain”, depending on the fact whether or not they consider those impacts, having the duty to measure the dimension of the impacts and disclosure the respective information.
For the purposes of SFDR Regulation, “sustainability factors” mean environmental, social and employee matters, respect for human rights, anti‐corruption and anti‐bribery matters.
Formally GM still does not consider adverse impacts of sustainability factors on investment decisions made on behalf of the private equity funds. Notwithstanding this fact, GM recognizes the relevance of environmental, social and governance factors in the investment decisions, as well as the importance of informing the market and the investors about the impacts of the sustainability factors on the investment decisions. With this in mind, GM has adopted a sustainability Policy, which provides the sectors that have obvious negative impacts on sustainability factors, are, directly or indirectly, exempted from the investments of the funds. Accordingly, excluded from the investments of the private equity funds: a) radioactive materials (except for medical use); b) activities which are deemed illegal under the laws and regulations of a relevant State, under international agreements and conventions, or subject to phase-out or international prohibition; c) corruption, money laundering , financing of terrorism and the proliferation of weapons of mass destruction; d) enforced labour and child labour; e) pornography and prostitution; f) human rights violations.
Notwithstanding the relevance of the sustainability, the current regulatory framework on the transparency of the negative impacts on the mentioned factors is not yet complete and the lack of information on standard indicators on these factors, particularly relevant for the respective measurement, makes it very difficult to carry out a complete, effective and detailed consideration and demonstration of the negative impacts of investment decisions on sustainability factors.
However, GM shall respect the management mandate given by the participants in the private equity funds, as well as the respective investment policies and objectives, consequently the decisions on behalf of the private equity funds, even the ones related to sustainability, must comply and be compatible with the management mandates and the private equity funds investment policies.
As the correct and formal consideration of the sustainability factors and the effects of the investments decisions on such factors depends on the evolution, dissemination, and consolidation of the regulatory framework as well as the standard indicators on sustainability factors, GM is developing a progressive adaptation to the sustainability regulatory framework, in order to be able to correctly measure the negative impacts of the investment decisions on sustainability factors.
GM is following the development of the legal framework on sustainability factors, as well as the evolution of the disclosure of technical specificities defined in the “Regulatory Technical Norms” (“RTS”) on ESG, and is waiting for the finalization and the entry into force of the entire regulatory framework related to the disclosure of information on sustainability.
This declaration of non-consideration of the negative impacts on sustainability factors complies with the provisions of article 4, paragraph 1, subparagraph b) of the SFDR Regulation and article 12 of the Commission Delegated Regulation (EU) 2022/1288 of 6 April 2022. However, GM will take into account the publicly available information allowing the assessment of the negative impact of the investment decisions on the aforementioned factors in accordance with the priority objectives identified on GM Sustainability Policy.