Sustainability

Sustainability-related disclosure obligations

pursuant to REGULATION (EU) 2019/2088 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of November 27, 2019 on sustainability-related disclosures in the financial services sector

General information

1.) In accordance with Article 4 of the aforementioned Regulation, financial market participants publish the following information on their website and keep it up to date:

a) where they consider the main adverse impacts of investment decisions on sustainability factors, a statement on due diligence policies in relation to those impacts, taking into account their size, the nature and scope of their activities and the types of financial products they make available; or

b) where they do not consider adverse impacts of investment decisions on sustainability factors, clear reasons why they do not do so, including, where appropriate, information on whether and when they intend to consider such adverse impacts.

2.) Financial market participants shall include at least the following in the information submitted in accordance with paragraph 1(a):

a) Information on their strategies for identifying and prioritizing the most significant adverse sustainability impacts and sustainability indicators;

b) a description of the main adverse sustainability impacts and any measures taken or, where appropriate, planned in relation to them

c) where applicable, brief summaries of their participation policy in accordance with Article 3g of Directive 2007/36/EC;

d) a reference to their adherence to a code of responsible corporate governance and internationally recognized standards for due diligence and reporting and, where applicable, the degree of their alignment with the objectives of the Paris Agreement.

We intend to comply with these disclosure obligations below.

Definition of sustainability risks

Sustainability risks (ESG risks) are events or conditions from the environmental, social or corporate governance areas, the occurrence of which could have an actual or potential negative impact on the net assets, financial position and results of operations as well as on the reputation of a supervised company or on the value of investments or assets. Examples include

Environmental

Climate protection
Adaptation to climate change
Protection of biological diversity
Sustainable use and protection of water and marine resources
Transition to a circular economy, waste prevention and recycling
Prevention and reduction of environmental pollution
Protection of healthy ecosystems
Sustainable land use

Social/Social Affairs

Compliance with recognized labor law standards (no child or forced labor, no discrimination)
Compliance with occupational safety and health protection
Appropriate remuneration, fair working conditions, diversity and training and development opportunities
Freedom of association and assembly
Ensuring adequate product safety, including health protection
Equal requirements for companies in the supply chain
Inclusive projects and consideration for the needs of communities and social minorities

Governance/company management

Tax honesty
Measures to prevent corruption
Sustainability management by the Management Board
Management Board remuneration as a function of sustainability
Enabling whistle blowing
Guarantee of employee rights
Guarantee of data protection
Disclosure of information

Portfolio management

Strategies for dealing with sustainability risks

Sustainability concept

In general: We currently provide our services as the investment manager of an investment fund.

Our current investment and business model provides for us to invest in investment assets that are managed by managers specializing in these investments. These are carefully selected by us.

Strategies for incorporating sustainability risks into investment decision-making processes

Negative environmental conditions, social upheaval or poor corporate governance can have a negative impact on the value of our clients’ investments and assets in a number of ways. These so-called sustainability risks can have a direct impact on the net assets, financial position and results of operations as well as on the reputation of the investment properties.

When selecting financial instruments, we generally take into account information from the respective issuer and any available third-party information. We also conduct our own research. Identified or assumed risks are taken into account in parallel with market risks, financing risks, technology risks and other aspects when selecting investment objects. Sustainability risks can thus lead to safety discounts in the valuation of investment instruments and, if necessary, to their exclusion.

In order to limit sustainability risks, we try to give a lower weighting or completely exclude managers with a higher risk potential from target funds.

No consideration of negative effects of investment decisions on sustainability factors!

Our investment decisions do not explicitly consider material adverse impacts on sustainability factors, as we do not seek to maximize investment decisions on sustainability factors. Investment decisions can have a negative impact on the environment (e.g. climate, water, biodiversity), on social and employee matters and can also be detrimental to the fight against corruption and bribery.

Systrade AG bases its investment decisions primarily on the best possible risk/return profile, which is geared towards individual customer preferences. Although sustainability factors (ESG criteria) are therefore taken into account in this context, they are not defined as an explicit objective in order to do justice to the different interests and preferences of our clients. In a comprehensive analysis, ESG factors are implicitly included in the assessment of the risk/return profile. An explicit focus on sustainability criteria only takes place if this is expressly requested by our clients. In the context of portfolio management, consideration or non-consideration is also based on the client’s specifications in this regard.

Remuneration policy in connection with the consideration of sustainability risks

The remuneration policy at Systrade AG is designed in such a way that it does not provide any incentives to take disproportionate risks or sustainability risks.

Operational sustainability issues

The management of Systrade AG has been trying to take sustainability into account in business management and business policy decisions for years.

For example, we focus on emissions that are directly caused by our activities in the company, such as emissions from direct energy consumption in buildings (heating, electricity) or from the consumption of materials (paper, printer cartridges, etc.).

We store almost everything electronically and the exchange of data with our tax advisor, our lawyer and our external auditors is mainly digital. Among other things, this allows us to reduce working materials such as paper and printer cartridges. Our printers are also generally set to black and white and double-sided printing.

The processes in portfolio management and investment advice are also largely digitalized.

The digitalization of the office enables us to work more flexibly and productively. Our employees spend less time digging through files and can concentrate on the essential tasks. They need less space and materials.

All employees are free to work from home, subject to operational requirements. Some meetings are held via video call. This also offers potential for sustainable and cost-effective business operations in the future.