Consulco Capital Limited (the “Company”) is a limited liability company with share capital,
incorporated in accordance with the Laws of the Republic (Registration Number HE330560). The
Company is regulated as an alternative investment fund management company (“AIFM”) by the
Cyprus Securities and Exchange Commission (“CySEC”) with license number AIFM05/56/2013.
The Company is committed to integrating sustainability risks in its investment decision-making
process. For the purposes of 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 (the “SFDR”), the Company maintains this sustainability risk policy (the “Sustainability
Risk Policy”), which includes the processes followed by the Company in relation to sustainability
risks.
The regulatory framework considered for the purpose of this policy is as follows:
Art. 2 (17) of the SFDR defines “sustainable investment” as 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 labour 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;
Art. 2 (22) of the SFDR defines “sustainability risk” as 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.
Some examples of sustainability risks are the following:
Art. 2 (24) of the SFDR defines “sustainability factors” mean environmental, social and employee
matters, respect for human rights, anti‐corruption and anti‐bribery matters.
Recital 16 of Commission Delegated Regulation (EU) 2022/1288 states that ‘greenwashing’, is, in
particular, the practice of gaining an unfair competitive advantage by recommending a financial
product as environmentally friendly or sustainable, when in fact that financial product does not
meet basic environmental or other sustainability-related standards.
Recital 11 of Taxonomy Regulation (EU) 2020/852 states in the context of this Regulation that,
“greenwashing” refers to the practice of gaining an unfair competitive advantage by marketing a
financial product as environmentally friendly, when in fact basic environmental standards have
not been met.
The European Supervisory Authorities (“ESAs”) understand greenwashing as a practice where
sustainability-related statements, declarations, actions, or communications do not clearly and
fairly reflect the underlying sustainability profile of an entity, a financial product, or financial
services. This practice may be misleading to consumers, investors, or other market participants.
The Sustainability Risk Policy applies to the Company since it qualifies as a financial market
participant due to its authorization to operate as an AIFM and to any alternative investment funds
under the management of the Company (the “funds under management”). The employees of the
Company are expected to read, understand and acknowledge the content of the Sustainability
Risk Policy.
The Sustainability Risks Policy describes the Company approach, handling and monitoring of
sustainability risks (including greenwashing risks) which may arise during the investment
decision making process relating to the funds under management and fall under the scope of
SFDR.
Within the Policy the Company aims to:
i. set the framework for the manner in which sustainability risks are integrated into their
investment decisions, and
ii. describe the approach taken to manage and monitor sustainability risks which may have a
material influence on the funds managed by the Company.
The Company’s approach in integrating sustainability risks into its investment decision making
process is to ensure that the services provided and its operations do not result in unacceptable
impacts on the environment and society.
The Senior Management ensures that the Sustainability Risks posed to the Funds under
management are integrated effectively and investment strategies and the risk limits are properly
and effectively implemented. In addition, the Company retains the necessary resources and
expertise for the effective integration of sustainability risks.
The Risk Manager of the Company is responsible for managing Environmental, Social or
Governance (“ESG”) issues and risks when they arise. As such the Company’s Risk Management
Policy comprises of such procedures necessary to enable the Company to identify, assess and
mitigate, for each Fund it manages, the exposure to sustainability risks which may be material.
The Company will ensure that necessary resources and expertise for the effective integration of
sustainability risks is retained at all times.
As per SFDR sustainability risk is defined as 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.
In compliance with the obligations under the SFDR, the Company integrates Sustainability Risks
into the investment decisions, meaning, a process is followed by which first such risks (if any) are
identified and, where relevant, monitors and manages such risks which may impact a Fund in a
manner considered to be appropriate to the particular investment strategy of the Fund and
consistent with the best interests of the Investor Shareholders. Nevertheless, the approach taken
to the integration of Sustainability Risks into the investment decision-making processes may
evolve over time in line with the continually evolving nature of Sustainability Risks.
Sustainability Risks are part of the investment risk management framework taken into
consideration along with other risk factors as part of the wider investment decision making
process. The Company identifies, assesses and monitors sustainability risks that may arise when
making investment decisions. The main sustainability risks that currently indirectly relate to the
Funds under management are environmental risks which can be divided into physical risks and
transition risks.
Following risk mitigation and due diligence measures taken, the Company considers that current
sustainability risks on the investment portfolios are of a lower risk and the impact of such risks
on investment returns is not considered as material. If, however, in the future sustainability risks identified may have a material and negative impact on the returns of the Funds under management, relevant risk mitigation strategies will be put in place. More information with regards to the due diligence and risk mitigation measures are described in the Company’s Risk Management Policy.
Furthermore, investments within the funds under management currently do not take into account
the EU Taxonomy criteria (Regulation EU 2020/852 on the establishment of a framework to
facilitate sustainable investment) for environmentally sustainable economic activities unless
otherwise stated in the Sub-Funds’ investment objective and policy.
Principal adverse impacts on sustainability factors refer to adverse impacts of investment
decisions on sustainability factors that mean environmental, social and employee matters,
respect for human rights, anti-corruption and anti-bribery matters.
The Company does not consider any adverse impacts of its investment decisions on
sustainability factors in respect of the Funds under management as the investment strategies of
the Funds under management do not regard sustainability factors to be material to their
investment strategy.
In the event that sustainability factors do, in the future, become material, the Company will
consider the principal adverse impacts of its investment decisions on sustainability factors.
When the Company identifies types of conflicts of interest the existence of which may damage
the interests of a Fund, including conflicts of interest that may arise as a result of the integration
of sustainability risks in the Company’s processes, systems and internal controls and conflicts
of interest that could give rise to greenwashing, mis-selling or misrepresentation of investment
strategies relevant actions will be taken to manage and prevent such conflicts. However, it should
be noted that no conflicts of interest arise in terms of sustainability risks.
The Company will monitor and review the Policy on an annual basis and on an ad-hoc basis in the
event of major changes to the policy framework of the Company and will proceed to changes
where and as needed.
The policy will be acknowledged by the Board of Directors of the Company after every review
and/or material changes to its content.