REGULATORY DISCLOSURES
SUSTAINABILITY-RELATED DISCLOSURES PURSUANT TO REGULATION (EU) 2019/2088 (“SFDR”)
Gardena Sustainability Risk Policy
According to Art. 2 (22) of Regulation EU 2019/2088 on sustainability-related disclosures for the financial services industry, known as Sustainable Finance Disclosure Regulation or “SFDR”, 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 the investment”.
To comply with SFDR, Gardena Capital Ltd. (“Gardena”) has approved and implemented a Policy on Sustainability Risk which sets out the standard for the integration of sustainability risk in Gardena’s investment decision process.
The Policy describes the Sustainability Risk Framework for Gardena’s investments. The Framework is a system of principles, rules and criteria that defines Gardena’s approach to sustainability risk. Its goal is to assess, manage and limit the exposure to sustainability risk, consistently with Gardena’s overall Risk Management Framework.
Within the Sustainability Framework, different assessment methods apply to the main asset classes involved in Gardena’s investment decision process, taking into account the fundamental differences between equity and corporate bonds (and their derivatives) on one side, and sovereign bonds (and their derivatives) on the other side.
For investments in equities, corporate bonds and their derivatives, Gardena’s Sustainability Risk Framework, consistently with our vision, describes a two-steps selection approach. The first step applies exclusion conditions that eliminate, from the investable universe, companies that belong to sectors, operate in countries, or conduct activities that cause an undisputable negative impact on environmental, social and governance (ESG) factors. The second step is a positive screening that assigns an ESG rating to securities and to identify those which meet a desired level of positive ESG characteristics.
For investments in a government’s bonds and their derivatives, we assess the fundamental characteristics of the country, such as fiscal and monetary policy, economic trends, and the political and social environment. All factors that are believed to affect the government’s ability to service and repay the debt are analysed, including a wide range of ESG characteristics.
Securities that do not fall within this Sustainability Risk Framework are not selected for investment, even if they are appealing in a fundamental analysis.
Gardena’s Statement on Sustainability Risk Assessment
The sustainability risk assessment conducted on Gardena’s Funds within Gardena’s Sustainability Framework supports the conclusion that while sustainability risks are relevant to each of Gardena’s Funds and are integrated into investment decisions, the impacts on each Fund’s returns of environmental, social or governance events is low.
Such conclusion is consistent with Gardena’s investment strategies, portfolio construction and securities selection methods and geographic focus across asset classes. For further details on each Fund’s sustainability risk assessment please request a copy of Gardena’s Sustainability Risk Policy and/or Fund Prospectuses, by writing an email to info@gardenacapital.com.
For the purpose of Regulation EU 2019/2088 on sustainability-related disclosures in the financial services sector, the Fund does not promote any Environmental or Social objectives, nor does it have a sustainable investment objective.
No consideration of sustainability adverse impacts
Pursuant to Article 4(2) of the Sustainable Finance Disclosure regulation (SFDR), Gardena Capital Ltd (“Gardena”) opts out of the requirement to consider the adverse impacts of its investment decisions on sustainability factors. This approach is applied on the basis that Gardena has less than 500 employees and the current size and scale of its investment business is such that it cannot have any meaningful impact on ESG factors. Gardena will continue to review its approach and at such point it deems it appropriate, the adverse impacts of its investment decisions on sustainability factors, within the SFDR framework, will be considered.
Remuneration policy
Gardena has updated its remuneration policy to meet the requirements of SFDR. Gardena’s remuneration policy is designed to ensure that the remuneration of key decision makers is aligned with the management of short and long-term risks, including the oversight and where appropriate the management of sustainability risks in line with SFDR. Gardena’s remuneration policy is reviewed periodically or as required by regulations.
UK STEWARDSHIP CODE
Introduction
As a firm authorised and regulated by the FCA, Gardena Capital Ltd is required to either disclose its compliance with or explain its non-compliance with the principles set out in the UK Financial Reporting Council's Stewardship Code (the "Stewardship Code").
The Code is a voluntary code and sets out a number of principles relating to engagement by investors with UK equity issuers. Investors that commit to the Code can either comply with it in full or choose not to comply with aspects of the Code, in which case they are required to explain their non compliance.
Gardena Capital Ltd manages assets across a number of discretionary strategies, however the investment processes do not involve significant engagement with underlying investee companies in any of these strategies.
While the Firm generally supports the objectives that underlie the Code, the Firm has chosen not to commit to the Code.
RTS 28 Quality of Execution Report 2018